
Conveyancers extend leases by following a legal process that varies depending on whether the leaseholder has a statutory right to a lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, or if they are negotiating an informal extension with the landlord.
1. Statutory Lease Extension (Formal Route)
This process applies to leaseholders of flats who have owned their property for at least two years. They have the right to extend their lease by 90 years (for flats) with a reduced ground rent (peppercorn rent).
Steps:
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Instruct a Conveyancer – The leaseholder hires a solicitor or licensed conveyancer to manage the legal process.
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Obtain a Valuation – A specialist lease extension surveyor estimates the premium (cost) for the extension.
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Serve a Section 42 Notice – The leaseholder’s conveyancer formally notifies the freeholder of their intention to extend.
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Freeholder’s Response (Section 45 Notice) – The landlord must respond within two months, either accepting or negotiating the price.
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Negotiation – If both parties cannot agree, the matter can be referred to the First-tier Tribunal.
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Legal Formalities – Once agreed, the conveyancer prepares the lease extension deed.
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Registration with Land Registry – The extended lease is officially recorded.
2. Informal Lease Extension (Negotiated Route)
Some leaseholders prefer to negotiate directly with the landlord, which may allow for more flexible terms.
Steps:
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Contact the Freeholder – The leaseholder (or conveyancer) approaches the landlord.
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Agree on Terms – This includes the new lease length, ground rent, and premium.
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Drafting the New Lease – The landlord’s solicitor prepares the document.
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Legal Review & Signing – The leaseholder’s conveyancer checks the terms before signing.
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Registration with Land Registry – If the lease term changes significantly, it must be registered.
Key Considerations:
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Cost: Includes valuation fees, legal fees, the lease extension premium, and potential tribunal costs.
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Timeframe: The statutory process can take 6-12 months, while informal negotiations may be quicker.
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Impact on Property Value: Extending a lease before it drops below 80 years is crucial, as "marriage value" (extra cost) applies after that.
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