assignment of benefit of section 42 notice

Section 42 Notice Explained: A Complete Guide for Property Owners

February 16, 2023

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Leaseholders have the right to have their lease extended if they meet certain eligibility criteria. This right is outlined in the Leasehold Reform, Housing, and Urban Development Act of 1993, which allows leaseholders to extend their lease for an additional 90 years. A notice must be served on the freeholder or landlord to begin the statutory leasehold extension process. This Notice is also referred to as the Section 42 Notice or the Tenant’s Notice. This guide summarizes everything you need to know about Section 42 Notice.

Our experienced chartered surveyor gives his advice on the six top leasehold issues.

Definition: Section 42 Notice

A Section 42 Notice is a formal request from a leaseholder to a freeholder. The ground rent is reduced to a peppercorn in addition to the right to a 90-year lease extension. A leaseholder pays a small amount of peppercorn rent (£1 per annum) to satisfy a legal agreement between them and the freeholder. The Notice also includes a proposed premium for the lease extension allowance. The freeholder or landlord must respond with a Counter-Notice within two months of receiving a Section 42 Notice. A Counter-Notice indicates whether the freeholder accepts or rejects the lease extension.

Eligibility: Serve Section 42 Notice

If the leaseholder is eligible for the formal lease extension, there are very few reasons that a freeholder can reject a served Section 42 Notice. However, they may reject the Notice based on the premium offered or if the leasehold is ineligible for the lease extension. You are qualified to serve a Section 42 Notice on a freeholder if and only if you meet the following criteria:

• You’ve owned the property for at least two years.
• The initial lease was granted for more than 21 years
• The property for which you want to extend your lease is not commercial or business property.

Contents: Section 42 Notice

The Leasehold Reform, Housing, and Urban Development Act of 1993 specifies the contents of the Tenant’s Notice. Section 42 Notice must include the following elements, according to the Act

• The tenant’s full name and the address of the property for which they want to extend their lease.
• The terms of the tenant’s first lease. These include the lease’s date, the lease’s terms, the lease term, and the date the lease term began.
• The proposed premium is payable to the freeholder in exchange for granting a lease extension for the subject property.
• The tenant’s proposed terms for the proposed lease extension.
• Details of the tenant’s appointed solicitor, including the name and address in England and Wales where future notices may be served.
• The date on which the tenant wishes the landlord or freeholder to serve a Section 45 Counter Notice in response to the Section 42 Notice. This date, however, must be more than two months after the Counter Notice was served.

Concerning the Section 45 Counter Notice

While the Section 42 Tenant’s Notice initiates the lease extension process, it is the Freeholder’s Counter-Notice that determines the extension’s progress. When served with a Section 42 Notice, the freeholder may respond in one of a number of ways via the Counter-Notice:

• Accepting the request for a lease extension and agreeing to your terms.
• Accepting your lease extension request, but only if you agree to different terms.
• Refuse your request due to the landlord’s claim to redevelop the flat.
• Reject your request due to ineligibility for statutory lease extension requirements or flaws in your Section 42 Notice.

It is unusual for a freeholder to reject the Tenant’s Notice. This is because rejecting a Section 42 Notice may result in severe legal consequences for the landlord. These may include a court order to agree to the leaseholder’s terms or even losing control over the lease extension premium. When a freeholder accepts your request on the condition that you agree to new terms, it is often a ploy to open the door to further negotiations.

When it comes to lease extensions, the Section 42 Notice is an important document. Any flaw discovered on it can thus be used to dismiss it in a court of law. When your Section 42 Notice is dismissed in court, it means that your lease extension request has been halted. The worst consequence of a rejected Section 42 Notice is that you will be unable to apply for a lease extension for another 12 months. This is why you should think about hiring a professional lease extension lawyer.

The Advantages of Using a Solicitor to Serve a Section 42 Notice

A Section 42 Notice can be served by yourself. Getting assistance from an expert solicitor, on the other hand, has numerous advantages, including:

• Experience and Expertise -Serving an incomplete and inaccurate Section 42 Notice is one of the reasons why the Notice can be dismissed in court. Lease extension lawyers have served numerous notices for a variety of clients. As a result, they are familiar with the common flaws and errors that can result in the rejection of a notice. You can be confident that your Section 42 Notice will be served flawlessly if you use a solicitor. Due to the legal participation of a solicitor, the likelihood of the lease extension being granted by the freehold is also high
• Notice-Follow Up – Solicitors can assist you in following up on the freeholder’s Counter-Notice. If the freeholder fails to serve a Counter-Notice, solicitors will advise you on the best course of action to take.
• Legal Advice The entire process of serving a Section 42 Notice is a statutory procedure. A lease extension solicitor provides you with the legal advice and assistance you need when serving the Tenant’s Notice. They will clearly explain the legal procedure for serving the Notice and will advise you on all of the details that should be included in the Section 42 notice before you can finally serve it to the freehold.

The Section 42 Notice Service Procedure

The following is a step-by-step guide to serving a Section 42 Notice.

• Lease Premium Valuation – The calculation of determining how much you will pay a freeholder for the lease extension is known as premium valuation. A Section 42 Notice should include information about your proposed lease extension premium. This premium should be valued by an RICS valuer who is specialised in this field. RICS valuers are experts at estimating the cost of a long-term lease. Your premium should not be too low. A low premium valuation is grounds for the freeholder to reject your Notice.

The following are the reasons why you should hire an RICS valuer:

• They will advise you on the best premium to include in the Tenant’s Notice.
• They assist you in determining the possibility of a premium in all circumstances.
• You will be assisted by the valuer in responding to the freeholder’s Counter-Notice.
• During negotiations with the freeholder on the payable premium, the valuer deals with all matters, until a resolution is finalised.
• Check to See if You Can Afford the Proposed Premium – As compensation for the lease extension and loss of ground rent income, you will be required to pay a premium to the freeholder. As a result, you should assess the premium valuation highlighted by your valuer to determine whether you can afford to make such a payment. Once you’ve determined that you can afford the premium, you can hire a solicitor to assist you in serving your Notice.
• Obtaining the necessary information to demonstrate identity, address, and financial ability to pay the premium.
• Obtaining a duplicate of your lease.
• Checking your eligibility for a lease extension.
• Obtaining the freeholder’s or landlord’s home address.
• Obtain the contact information for the freeholder’s lawyer.
• Section 42 Notice Drafting – Your lawyer will also deal with the drafting a Section 42 Notice. The draught must include all of the elements required by the Leasehold Reform, Housing, and Urban Development Act of 1993. Once they have finished drafting the Notice, you will be required to sign it in the presence of a signature.
• Serving the Notice – The Section 42 Notice is ready to be served to the freeholder’s address once it has been drafted and signed. Your solicitor should handle this via special delivery or courier. This is to ensure that the freeholder has received and signed the Notice. It is critical to note that the cost of delivering the Notice is your responsibility. The landlord may also require you to send proof of your lease extension eligibility.

For more queries related to the length of the remaining lease and how much any lease extension may cost, have a lease extension valuation undertaken by an expert lease extension valuer.

What Happens After You Serve a Section 42 Notice?

The landlord has two months to respond to your request after you have served the Tenant’s Notice at the freeholder’s address and they have acknowledged receipt. The landlord’s response is captured in the Counter-Notice, with the landlord indicating his or her interest in the request. If the freeholder has rejected your Notice without giving any reason, you have the legal right to apply to a court for a Vesting Order. If your landlord accepts your Tenant’s Notice and all necessary negotiations are completed, your solicitor will complete the new lease and deal with registering the Section 42 Notice with the Land Registry. However, you will be required to pay before this is done, such as the new lease premium, professional fees, ground rent, stamp duty, and other service charges.

Section 42 Notice Time Limits

• Section 45 Counter Notice Issuance – By law, the freeholder must serve his counternotice within two months of receiving the Tenant’s Notice. Their response should be in the form of a formal document known as a Section 45 Counter-Notice. The freehold should clearly state in this document whether they have accepted the terms of a lease extension or have declined the lease extension request. If they reject the leasehold’s section 42 notice, they must state all valid reasons for the rejection in the counter-notice, as allowed by law.
• Confirmation of Eligibility – The landlord may request proof of lease extension eligibility. They do, however, only have 21 days to request this confirmation. The leaseholder is then given 21 days to respond to this request.
• Inspection Notice – The freeholder has the right to inspect the property in question to determine its worth. This procedure, however, requires a 3-day notice and must be done in writing.
• Rejection of Tenant’s Notice – The freeholder has at least two months, but no more than six months, to provide reasons for rejecting your Section 42 Notice. During this period your surveyor will try and negotiate with the freeholder’s surveyor to reach an amicable agreement on the premium.

Section 42 Notice Fees

The fees for drafting and serving a Section 42 Notice vary depending on the solicitor. Here are some ballpark figures to help you plan your conveyancing budget.

• Valuation of a Lease Extension by a Qualified Valuer – £500 to £1000
• Leaseholders Solicitors Fee – £500 to £800 Per Person Online ID Fee – £8
• Solicitor’s Fee for the Freeholder – £800 to £1500
• Obtaining a copy of the lease for £3 Registering and copying title plans for each title for £6 Registering the Section 42 Notice at Land Registry for £20

Extra payments may also be required for services such as obtaining a Vesting Order, negotiating the lease extension premium, and completing the lease extension process. All of the cost estimates presented here include taxes.

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Home / Property Solicitors / Lease Extension / Buying a Flat with a Short Lease & Assigning the benefit of a Section 42 Notice

Buying a Flat with a Short Lease & Assigning the benefit of a Section 42 Notice

• September 12, 2023
• Lease Extension , Leasehold Property

Assigning the benefit of a Section 42 notice when buying a flat with a short lease

Buying a flat with a short lease is risky unless you instruct a  leasehold solicitor  who can help to remove the risk with a section 42 notice. With over four million leasehold flats, leasehold is the most common form of flat ownership in England and Wales. Our previous blogs have looked at the  lease extension process and also the recent leasehold consultation. Now we look at the process of buying a property with a short lease . When looking to buy your own leasehold property, the biggest trap can be buying a flat with a short lease. A short lease is anything aound the  80-year mark or lower. This can lead to problems such as the property becoming unmortgageable and unsellable in the future. This is because the premium for extending the lease drastically shoots up into the tens of thousands of pounds once the lease becomes shorter than 80 years (marriage value) and lenders are hesitant to give mortgages on properties with such short leases. As a potential buyer, you can take action to avoid taking on a flat with a ticking time bomb. Ordinarily, a leaseholder can extend their lease using the  Leasehold Reform, Housing and Urban Development Act 1993 . Under this statutory process, someone that has owned the property for a minimum of 2 years is able to obtain a 90-year lease extension and reduce the ground rent to a peppercorn (zero). If you buy a property with a lease about to hit 80 years, you may not have time to wait the required 2 years before the premium for obtaining a lease extension drastically rises and renders the property unmortgageable and unsellable.  Therefore, the statutory process isn’t a viable option and you may choose to informally negotiate directly with the landlord. However, the landlord is not legally obligated to accept a lease extension in this case, so you could be forced to wait the 2-year minimum regardless & leaving you with less than 80 years remaining. At first glance this may seem like an impossible situation, but the solution to this problem takes place before you even purchase the property. So does that mean that you shouldn’t be buying a flat with a short lease? No, you can buy a property with a short lease if you have experienced  leasehold solicitors  representing your interests.

Buying a flat with a short lease and assigning the benefit of the Section 42 notice

To overcome the difficulties of lease extension as a new owner, you can contractually procure the seller to serve the Section 42 notice on the landlord and assign the benefit of that notice within a separate agreement to you, the buyer. Upon completion of the purchase you as the new owner will take over the  lease extension process. In order for this to work, the seller would have to have owned the property for a minimum of 2 years; the landlord cannot be a charitable housing trust where the flat is provided as part of the charity’s work; it must not be a business/commercial lease and there cannot have been a claim that was withdrawn or abandoned in the last year. Be prepared for the seller to ask you to pay for any and all legal costs that you would be liable for if you had served the notice. You must arrange to serve the notice on or after the exchange of contracts but before completion. This is because if the buyer were to pull out before exchange, but the notice had already been served to the landlord, the seller would have to complete the lease extension themselves; making them liable for the full cost. For this reason, the seller will normally only serve the Section 42 Notice requesting a new lease after exchange of contracts for sale. When buying a flat with a short lease our  leasehold solicitors  can liase with the seller’s solicitors to confirm that a valid section 42 notice has been served on the freeholder between the exchange of contracts and completion, as well as assist you in completing the lease extension process once the lease has been assigned to you by the seller. However, it is vital that you work with us to adhere to the timescale by which necessary paperwork must be completed; otherwise, you risk the lease dropping below 80 years before the lease extension has been completed, meaning that your premium will sharply increase.

Can I buy or sell a leasehold property and extend the lease simultaneously?

Indeed you can – once the section 42 notice has been assigned, it is possible to arrange for the lease to be extended simultaneously with completion on the purchase. This way, there will be no need to wait for the lease extension to be finished before completing on a purchase, plus the newly-purchased property will usually satisfy the mortgage lender’s requirements for the term of the leasehold property. To simultaneously extend the lease and complete on a purchase, you need efficient  leasehold solicitors  experienced in lease extension and leasehold conveyancing to ensure the lease is extended in time for completion. At Starck Uberoi, we offer an efficient and comprehensive leasehold conveyancing service and can ensure your lease extension is completed in time.

How much does it cost to extend a lease by way of a Section 42 notice?

Generally speaking, it will usually cost around £1,500 plus VAT plus  disbursements to extend a lease by way of a section 42 notice. However, the fee will vary depending on the particular transaction. Alternatively, if you are able to negotiate an informal lease extension  with the freeholder, our legal fees are generally around £1,250 plus disbursements for such matters. With an informal lease extension , the leaseholder and freeholder can agree on a premium, length of extension and the terms of the extended lease between them.

Should the seller complete and register a lease extension before I buy the property?

If the seller does not assign the benefit of the Section 42 notice as outlined above, the buyer must wait while the seller goes through the necessary steps to obtain a lease extension from the freeholder. You might prefer to have this already dealt with by the time you purchase the property and could arrange for the seller to complete the lease extension process themselves. However, a  lease extension  takes several months so this would postpone the sale for as long as this notoriously long process takes. Furthermore, the seller often doesn’t have the funds to carry out a  lease extension , which is why they are selling at a reduced price. In this situation, it may be better to try and arrange an informal lease extension  with the freeholder. Informal lease extensions can be faster to obtain and sometimes even be cheaper than a formal lease extension , although there are pitfalls you will need to look out for such as onerous ground rent terms. The main benefit of this option is on the buyer, who will receive a new lease without having to deal with the landlord and his surveyor.

Is the process different for a probate sale?

A probate sale is where the executor of the deceased’s estate sells the property. If the property is still in the deceased’s name, the executors can serve the Section 42 notice provided that when the deceased died, they had owned the property for at least two years. They may then assign the benefit of the notice to you.

Is the process different for an auctioned property?

In short, yes, it is. At an auction, once the bid is accepted, you have effectively exchanged contracts. Therefore, any questions relating to the lease extension need to be asked before you go to the auction room and bid. The seller needs to have offered to serve the notice in the ‘special conditions’, which will be outlined in the auction information. If they have not done this, you as the buyer will have no legal right to demand that they serve a notice and assign the benefit to you.

What can I do if I want to sell my short lease property?

If you are trying to sell a short lease property, there are a couple of ways you may be able to make your sale easier. Find out in our blog post about selling your short lease property.

Appointing a chartered surveyor to obtain a valuation and estimate the premium to extend the lease

If you are looking to buy a property with a short lease, you need to get valuation advice. This is because you will want to know that an appropriate adjustment has been made to the price you are paying by a  chartered surveyor  which reflects the fact that the lease is short. You will need a valuation carried out by a surveyor specialising in statutory lease extensions to start the  lease extension process. It is also essential to have a surveyor because they can estimate the price you will likely end up paying for the lease extension and give you the right price to offer when serving the Section 42 notice. Offer too little and the landlord can reject the claim, which could mean ending up in a first-tier tribunal. Offer too much and you end up overpaying for the lease extension . Starck Uberoi can put you in touch with surveyors we trust.

What if the lease must be extended on completion of the purchase to comply with mortgage lender minimum lease terms?

This might be the case for properties where the years left on the lease has dropped so low that you are struggling to secure a mortgage to buy the property. This is because most banks refuse to mortgage properties below 65 years, even if the benefit of a section 42 notice has been assigned. The assignment of benefit of a section 42 notice does not mean that the lease has been extended yet, only that the lease extension process has started; consequently, the lender will likely not grant a mortgage onto the lease because it still technically only has less than 65 years remaining on it, which is why the lease extension must be completed on completion. To see what minimum lease term these mortgage lenders accept, see our blog on  short lease mortgages . Should this be the case, you could request that the seller transfers the benefit to you and completes the transaction on the same day as the lease is extended, which could take a few months. If the lease extension is due to be completed on the day you are to complete on the sale, the lender is more likely to grant you a mortgage. If the seller is unable to extend the lease in time, you may need to negotiate an informal lease extension  with the freeholder yourself. With an informal lease extension , you could negotiate the premium you would pay for the  lease extension  and the terms of the lease on an informal basis, without using the typical formula usually used to calculate statutory lease extension premiums. Through this method, you could also extend your lease by up to a maximum of 999 years, as opposed to the 90-year maximum a statutory lease extension grants. Be wary, however, of the terms the freeholder proposes should you take the informal route. The statutory lease extension process allows you to reduce your ground rent to a nil rate, but your freeholder has no such obligation to reduce your ground rent as part of an informal lease extension . Many an unfortunate leaseholder has consequently found themselves trapped in unsellable properties due to high ground rent that doubles at an alarming rate, after agreeing to unfavourable terms for an informal lease extension . Update: As of April 22nd 2022, the government has unveiled plans to scrap ground rent on all new leases, set to come into force on 30th June 2022. Any new lease created after this time will be banned from including clauses demanding ground rent to be paid. This includes lease extensions granted after 30th June 2022, whether granted via the statutory route (the serving of a section 42 notice) or via the informal route.

Can I get a mortgage on a flat with a short lease if I can’t get a lease extension in time?

If all else fails, there are still lenders that may be willing to lend on flats with short leases remaining. Our partner company  Starck Uberoi Wealth  provide independent mortgage advice tailored to your needs, and can help you find a lender who will lend on your flat with a short lease. Book an appointment with them today by calling  020 8037 4027  or sending an email to  [email protected] .

How Starck Uberoi can help

Starck Uberoi’s experienced  leasehold solicitors  can help you with your leasehold arrangements, from buying your first flat to extending your lease.  For more information please contact us either by visiting our Conveyancing or Lease Extension pages. To book an appointment, please call 020 8840 6640 or email [email protected]. Our offices are located in Brentford , Ealing , London Belgravia and Canterbury , all within easy reach by public transport. Our partner, Raminder Uberoi , can also provide a  Notary Public service from any of our London offices.

Further Info

For an estimate of  lease extension cost , please visit our lease extension calculator .

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Section 42 Lease Extension Notice

Solicitors specialising in extending leases on residential flats.

If you own a flat then you are likely to have the right to extend your lease if you want to. This can either be done by informal agreement with your freeholder or through what is known as the formal or statutory route – which starts by serving a formal section 42 lease extension notice on them.

This is a notice under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 . The notice advises the freeholder that you wish to extend your lease. Provided that you qualify for a lease extension, your freeholder cannot refuse your request , provided that original notice is served correctly and you stick with the rigid lease extension procedure and timetable.

Got a s42 lease extension notice question? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.

Click here to read the Leasehold Reform Latest News on the latest progress of the UK Government’s new Leasehold and Freehold Reform Bill in Parliament.

Drafting Your Section 42 Lease Extension Notice – Do I really need a specialist solicitor?

Yes, we firmly believe you do.

That’s because it’s really important to go through the correct procedure in serving the notice to make sure you protect your rights. But don’t just take our word for it. Here’s what the government funded Leasehold Advisory Service says:

“The legislation in relation to lease extensions does not provide a ready made form that can be used by a leaseholder to send a s.42 notice to the freeholder to ask for a lease extension. “Therefore it is advisable to use a professional such as solicitor to draft a section 42 notice to be sent to the freeholder so as to comply with the legal requirements.”

We are also the only solicitors recommended for lease extension work by the HomeOwners Alliance – the country’s largest organisation campaigning for and representing the nation’s homeowners.

Why extend your lease?

If you own a flat, this will usually be on a leasehold rather than freehold basis. This means that you “own” your flat only for a set period of time. As the term remaining on your lease starts to drop, your flat will slowly start to become worth less. And selling a flat with a short lease will become increasingly difficult – as the shorter your lease gets, you will find that fewer mortgage lenders may well be willing to lend money to someone wishing to buy the flat unless the lease is extended. And once the remaining lease term drops below around 60 years, you may find that it’s only those with cash who are able to buy your flat – and will probably try to do so at a considerable undervalue.

Generally speaking, you should consider extending your lease once the remaining lease term falls below 85 years. And if the that lease term is approaching 80 years, you should try to extend your lease straightaway. That’s because the premium you will need to pay to your freeholder increases significantly the moment it drops below 80 years. Click here to read more about the advantages of Lease Extension

Lease Extension – am I eligible?

If you have owned your property for at least two years and the original lease was originally granted for more than 21 years, then you will usually qualify to extend your lease. But fortunately there is a way to avoid the two-year rule – see below.

If the property is a flat, this right to a lease extension will be for an additional 90 years. So, for example, if you currently have 81 years left on your lease, the additional 90 years granted under a statutory lease extension will leave you with a 171 year lease.

However, if we looking at a leasehold house , the additional lease will be for just 50 years,. However, you may prefer to purchase the freehold (using a process known as leasehold enfranchisement) instead of extending the lease as this is usually a better option for a house. Click here to read more to hear about the enfranchisement of leasehold houses

Click here to read more to hear about the the lease enfranchisement of blocks

Section 42 notice assignment – how to avoid waiting for 2 years ownership before extending your lease

Apart from a voluntary or informal lease extension, the only way to get your lease extended if you haven’t already owned the property for 2 years is, when buying a property in the 1st place, to get the purchaser to issue the section 42 notice for a lease extension themselves.

There is no direct cost to the vendor in doing this – and as a result they can assign the benefit of that application over to you on completion. This means you won’t have to wait 2 years and can carry on with your lease extension, with a s42 notice already served and the procedure already underway.

The ability to assign the benefit of a section 42 notice in this way does depend, however, on the vendors themselves having owned the property for at least 2 years.

And provided the section 42 notice was correctly drafted and served in the 1st place, then the process of assigning the benefit is relatively straightforward. The selling leaseholder’s solicitors will need to prepare and execute what is known as “a deed of assignment” and then transfer, or assign, the benefit of the s42 notice over to the incoming leaseholder on completion of the purchase.

Our lease extension team regularly act for clients in the circumstances. However we are well aware that many other conveyancing solicitors have little experience of or understanding of lease extension procedure.

As a result, with our clients’ agreement, we usually suggest that we draft the section 42 notice on behalf of the vendors, and then pass it to the vendors to serve on the freeholder. As part of that package we even provide an indemnity to the vendors’ solicitors that if we have made a mistake in preparation of the notice, we are liable. We find most conveyancing solicitors are more than happy to pass this specialist work over to us. And from our client’s point of view, we know that the notice has been properly drafted by our specialist team in the 1st place.

In these circumstances, the s42 notice is normally served or after the exchange of contracts, but before completion of the purchase. There is a simple reason for this. If the vendors withdraw from the sale before exchange of contracts, but have already served a notice on the freeholder, the vendors would either have to complete the lease extension themselves, or if they withdrew, be responsible for the freeholder’s own costs as well as their own.

Getting the section 42 lease extension notice wrong – the consequences

Getting the notice drafted correctly and served on your freeholder correctly is important. Failing to do both means that your notice is invalid. So, that not only means your application to extend your lease fails, but in addition, you’re not allowed to make another s42 application to extend your lease for a further 12 months.

And that failure also means potentially wasted solicitors’ and valuation costs – for you and your freeholder – and the possibility that with a shorter lease and increased property prices, you will have to pay a larger premium for your lease extension.

That’s why it’s really important to make sure that the solicitor you appoint for your lease extension claim really understand this complex area of law.

Should I use the formal s.42 notice route to extend my lease?

As mentioned above, there are 2 alternative ways of extending your lease.

One is a simple informal agreement with your freeholder. The advantage of this is that there is no set procedure, so if you have a cooperative freeholder, you may find this is quicker.

And it also allows you to agree whatever terms the two of you can agree on. So it doesn’t have to be a 90 year extension at nil ground rent – which is standard under the statutory lease extension route. So, for example, you can agree a 25 year lease extension to make it easier to sell your flat.

But the formal lease extension route offers more protection to the leaseholder than dealing with the extension informally . That’s because using the statutory process, you are exercising a legal right which the freeholder cannot refuse. In contrast, if you come to an informal agreement, the freeholder can change their mind or increase the price they have set at any stage – and there’s nothing you can do about it, but start off by issuing a s42 notice to start the statutory route.

What’s more, if you choose the formal route, starting with a section 42 lease extension notice, then the ground rent is reduced to zero. If the extension is informal, the freeholder might want to increase the ground rent as part of the deal. Remember, with an informal lease extension, the freeholder can set the terms they wish.

With the formal route, however, you can be sure of an additional 90 years, while informally, the freeholder may only be prepared perhaps to grant a shorter extension.

And if your solicitor has correctly served your section 42 notice, but you and the freeholder can’t agree on the premium, you can refer the issue to the First-Tier Property Tribunal to decide. In contrast, if you can’t agree on a premium using the informal route, there’s nothing further you can do.

For most flat owners, the formal s42 route to extending a lease is the best way forward.

How do I extend my lease?

Although in theory you could do it yourself, like conveyancing, you would normally  instruct a solicitor to handle your lease extension. If you instruct our experienced team to help you, we can handle the whole procedure from start to finish, making sure that you secure the best deal possible and that your lease extension is correctly registered with the Land Registry.

Before you start by serving your S42 notice, you need to make sure you have enough money to cover the costs. This will include:

·         The premium to pay should your freeholder to extend your lease

·         Your legal and Surveyor’s fees

·         Your freeholder’s reasonable legal and valuation fees

·         Mortgage lender’s fee for consenting to the extension

·         The Land Registry fee to register the new lease

Making sure you don’t overpay for your lease extension is very important. That’s why we always recommend clients instruct a specialist lease extension surveyor . And just like solicitors, there are  relatively few surveyors specialising in this area. However, our team have an informal panel of specialist valuers and we are happy to instruct 1 of them on your behalf to professionally value your lease extension.

Getting the section 42 lease extension notice right – checking your title and identifying your freeholder

We will start by checking the title to your property and the terms of your lease. We will then make sure we have identified the freeholder correctly. This could be an individual or a company. There may be a head lessor, or another freeholder, from whom your freeholder is leasing the property. If this is the case, we may need to serve notice on them as well.

We can also write to your mortgage lender, if you have one, and ask them for their consent to extend the lease.

Drafting the s42 lease extension notice

Our experienced solicitors will then draft the notice of claim itself. This will include:

·         Your name

·         The address of the flat

·         Details of the lease

·         The premium that you wish to pay for the extension. This can be viewed as an opening offer and will often be negotiated over time

·         Any new lease terms that you are proposing

·         The name and address of your solicitors

·         The deadline for the freeholder to provide a counter-notice. A counter-notice is a reply requesting a higher premium. The deadline must be at least two months from the date of the section 42 notice

It is important that the section 42 notice is complete and accurate. If it is not, it could be invalid and the freeholder will be able to reject it, which will prevent you from making another application for a further 12 months and will also waste any existing cost you have spent.

Response to the section 42 notice – Freeholder’s enquiries

The freeholder will usually instruct their own leasehold solicitor to represent them. We may be sent enquiries to answer: for example, they may ask for a copy of your legal title. There is a deadline for us to respond of 21 days from the date of that request. We are used to dealing with these short deadlines and will make sure that the other side have all the information they need from us well within the timescale.

Conveyancing solicitors don’t usually work with these kind of strict timetables (which is more usually found in court litigation), and this is 1 of the areas where we find non-specialist solicitors often make mistakes.

The freeholder can ask for access to your flat to have a valuation carried out. They must give you at least three days’ written notice of this.

Paying a deposit

The freeholder can ask you to pay a deposit after the section 42 notice has been served. This is usually 10% of the premium you have proposed paying.

The freeholder’s counter-notice

The freeholder or their solicitor should serve a counter-notice on us within the deadline we have set. This could agree to the extension and to the premium you suggested. Alternatively, they may agree to extend the lease but in return for a higher premium.

Negotiating the premium for a section 42 lease extension

We are strong negotiators and where necessary, we, or the surveyors you appoint, can negotiate on your behalf with the freeholder’s solicitor to try and agree on the right price.

What happens if I cannot agree on the premium for a s42 lease extension?

If you have used the formal section 42 notice process to extend your lease, then you have the right to ask the First-Tier Tribunal (Property Chamber) to decide how much should be paid. This is a court that specialises in leasehold matters.

We can put together a strong case and present this to the court on your behalf. It will generally be heard by a panel that includes a legal professional and a surveyor as well as a third person, often a layperson. You will usually be notified of the decision a few weeks after the hearing.

However, fortunately the vast majority of lease extensions never make it to the First Tier Tribunal. And one of the main reasons for that is that unless there are exceptional circumstances, each party has to bear their own solicitor’s and surveyor’s costs for appearing at the tribunal, which does not come cheap. This costs implication is a very good incentive to get both sides to agree on a premium they can both live with.

Finalising your lease extension

Once the premium has been agreed, a new lease will often be drafted. It may be pretty much identical to the original lease, unless there have been any alterations to the property that need to be mentioned. The ground rent will be set at it is known as “a peppercorn”, or zero, with nothing to pay.

We will then arrange for the new lease to be registered at the Land Registry and serve any notices, for example, if there is a head lessor or further freeholder.

Help with extending your lease

The lease extension process can be complicated. Being represented by an expert leasehold solicitor means that you can be sure that the right procedure is followed and that your rights are protected.

What does a section 42 notice do?

A notice under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 tells your freeholder that you want to extend your lease. Most leaseholders are eligible to do this and if you are eligible, the freeholder cannot refuse, provided you follow the correct procedure.

What is Section 42 of the landlord and tenant Act?

Section 42 of the Landlord and Tenant Act states that sinking funds, or service charge money that is saved for future expenditure, should be held in a trust fund. The Leasehold Reform, Housing and Urban Development Act 1993 applies to a tenant’s right to acquire a new lease. Section 42 of this act sets out the process for serving a notice on the freeholder that you want to extend your lease.

Can an executor serve a section 42 notice?

Executors have the right to serve a section 42 notice provided that the deceased qualified for a lease extension, including owning the property for at least two years. The executors must service the section 42 notice within two years of the date of the grant of probate.

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Client Reviews

I had need of the services of a solicitor to guide me through a Settlement Agreement. Bonallack and Bishop helped make the whole process as simple as it could be.

With their help and support we got everything sorted within 2 weeks which allowed me to get on with my life

Clive Bingham

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When my husband and I bought a buy-to-let flat it had a lease of less than 80 years and we knew we would need to either extend the lease or try to buy a share of the freehold. I made some enquiries with a local solicitor and Niki Adkins at Bonallack & Bishop was recommended to me. Since my first contact with Niki I have been extremely impressed. She provided us with invaluable information right at the start, which helped us to work with the three other flat owners to decide next steps. She recommended a surveyor who was able to help us determine what it might cost to extend the lease or to purchase the freehold. Luckily, all the flat owners decided that buying the freehold was the best option and we instructed Niki to undertake this work for us.

Although we were prepared for the process to take a year or more, we were delighted that Niki was able to help us secure the freehold in under 12 months. She made the process very clear, particularly around the costs involved, which all the leaseholders found invaluable. I would not hesitate to recommend Bonallack & Bishop and, in particular, Niki Adkins for any leaseholder considering securing the freehold on their property.

Leaseholder, Christchurch

I want to tell you how grateful I am for the professional, empathic and helpful way in which you handled my affairs and to wish you well in the future.

Bonallack and Bishop have an excellent matrimonial/ family affairs department and I should have no hesitation in recommending you to anyone in need of your services.

My best wishes too, to your Secretary Georgina, who has also been most professional and helpful in every way.

‘With very many thanks for all your efforts on my behalf on my divorce! I will definitely recommend you to others!!”

Family Law Department

“Thank you for all your help over the last year”

“Kate has guided me through what has amounted to an emotional rollercoaster in a very calm fashion. She has advised me at all times in a very clear, concise manner and has been a rock through the whole difficult process. I can honestly say that through her efforts I have come out of a divorce in much better place emotionally and financially than if I had not engaged her services. I can recommend Kate without reservation for anyone who is in need of advice / contemplating separation.  It will be one of the best decisions to make in difficult circumstances.”

“Once again a huge thank you to Kate Brown and all of the staff at Bonallack & Bishop, you have provided and excellent service and I will have no hesitation in recommending your Company to anyone I know, who finds themselves in a similar position.”

“Thanks again for all your help in this, it’s not the best of times in a person life and I want to say that you have been brilliant and very professional and I will be highly recommending you/B&B”

“I’m very happy and pleased that everything has been completed so quickly and efficiently. Thank you very much Jennifer Slater for all your efforts. Best regards”

Mrs Marisa Taylor

“I am extremely grateful for all your help and support, can’t thank you enough for all you have done.”

“I followed the advice you gave me, which was to keep my dignity … to meet on neutral territory … and things were settled. Thank you for your advice.”

“The Legal Advice and help that I received has been first class. Should I ever have problems in the future I would not hesitate to contact Bonallack and Bishop. You have delivered a high class service and been patient with me.”

“I was very happy with the assistance and service I received. I felt my needs were understood and met perfectly. I have already recommended your name to several others.”

“Thank you very much for all your help. A very difficult time in my life made easier by you.”

Wills & Probate Department

“Thank you very much for your support and interest.”

“I would just like to thank you for your service to me.”

“It was a pleasure to receive such an excellent and friendly service.”

“Thank you soooo much for this. We have decided that your new name really should be Awesome Adkins! (This refers to a lease extension carried out by Niki Adkins – a member of specialist team)

Miss C Jacobs, Whitchurch, Hampshire

“Throughout the lease extension negotiations you have been both charming and polite, despite the additional pressure imposed on you when unexpectedly having to take on a former colleague’s workload, and I know I speak on behalf of the whole family in thanking you for your efforts in achieving our goal of the lease extension and its registration with the Land Registry.”

A client from Downton, Wiltshire

“Niki has provided a professional, efficient and above all clear and understandable service throughout my lease extension process. Every e-mail request was dealt with promptly and the clearness of her advice was without fault. I cannot praise Niki enough for her hard work during this matter as unfortunately we had quite a ‘difficult’ landlord to deal with. She is also very approachable and affable which comes across in her e-mail content. I would highly recommend Niki to any of my friends and associates.”

Christine Woodroffe, London

“We were really impressed with how quickly and smoothly you organised the lease extension and we were happy we chose you. No doubt I’ll need a solicitor in the future and I’ll definitely contact you again.”

Rachael T, London

“I would thoroughly recommend that anyone needing to extend their lease should get specialist advice early on in the process. I can also thoroughly recommend the services of Niki Adkins in this regard as she is a true professional”

“Mrs Adkins did an excellent job and I was pleased with the prompt and efficient way in which she handled the lease extension. She explained the law and procedure well, dealt with all queries and correspondence quickly and recommended a specialist surveyor who provided useful advice regarding the valuation of the flat. For work of this type I would have no hesitation in recommending her and the firm.”

John Duckworth

“Thank you Niki for taking the confusion and worry out of my recent lease extension/freehold purchase. You are a star and I would certainly recommend you to others”.

Ms H – Salisbury

Can I just say a big thank you for all of your help on the lease extension. You’ve been fantastic throughout. You are a credit to the profession.

Mr S, Dorset

“Niki conducted the lease extension for my flat in a very professional and timely manner. I was extremely pleased with the service and personal attention that I received. This complicated matter was conducted to my entire satisfaction”

Pam Corfield

“I’m very happy and pleased that everything has been completed so quickly and efficiently. Thank you very much for all your efforts.”

Conveyancing Department

“We wanted to say how much we appreciated your support and guidance during the sale of our property.”

“We dealt with Sara Fewell who was always friendly available and professional. We recommend her without hesitation”

“You were absolutely tremendous – on top of the case at all times and proactive, thus avoiding delay and confusion. We are most grateful.”

“I am pleased with the outcome of my case and would like to thank you and your colleagues for your work on my behalf.”

‘Special praise should be sent to Alex Haider as his services were good. I would definitely recommend him to others’.

‘I was impressed with the work that Alex Haider undertook on my behalf. He made the whole process very clear and instilled both confidence and realism…above all he secured a very favourable settlement’

“Local. Easy to access. Someone available to communicate. Acted on instructions given. Not complicated. Friendly!”

“Bonallack and Bishop are professional, polite and approachable. Sara Fewell answered all my emails and send emails updating me all through the process of buying a property”.

Sara and Nikki are very professional in their work. You could not improve it at all”.

“Easy to relate to conveyancer, very could contact ability high-efficiency clear communication of all relevant information”.

“Friendly reassuring advice and efficient service. We were very satisfied with everything thanks Sara fuel very much for her work.”

“Sara was a beacon of professionalism in a sea of ineptitude. Cannot praise Sara highly enough. Without her I’m not sure the purchase will take place at all”.

“I think that you provide an absolutely fantastic service.  You are always friendly but polite with a great deal of experience of the more tricky aspects of conveyancing and how to resolve them.  The best part of your service, however, is your speed of response. You also go the extra mile.

I really admire you dedication to your work / clients and your thoughtfulness.

I am (as you know) a property lawyer with over 10 years of experience of property law so I can really appreciate the service and client support that you offer.  I think that you are brilliant and have recommended you to the estate agent to use on other sales.

Thank you again for making what could have been a very stressful move (on the legal side) run as smoothly as possible.”

“We will always be grateful for the worry free and cost effective manner in which the sale and purchase was conducted”.

“As one of the leading and longest established firm of chartered surveyors specialising in leasehold reform, we have worked with Bonallack and Bishop on many occasions. The process is complex and a procedural minefield. Bonallack and Bishop certainly know the ropes and we have always found them knowledgeable and efficient and a joy to deal with”.

Andrew Pridell, Andrew Pridell Associates Ltd – specialist Lease Extension Chartered Surveyor and Valuer, Hove

Andrew Pridell

“I have worked alongside Niki on numerous lease extensions and have been impressed by her efficiency, regular communication and knowledge of the subject.”

Stephen Higley, Smith Robinson Higley Ltd, Chartered Surveyors, Poole

Stephen Higley

“We are grateful for the prompt and efficient handling of our business… And our perception of black and Bishop is as a group of warm and wonderful human beings without parallel in the world of soliciting”

“I would just like to thank you for your advice and support throughout, it was not easy for me to start legal proceedings, particularly as I am in the military but I always felt sufficiently well informed and advised, and for that I am very grateful”

“I just wanted to say a big thank you for your help and assistance with the PI claim. Please also pass on my thanks to your colleague …… who helped to settle the employment matter. I am delighted with the outcome of both matters and would have no hesitation in recommending Bonallack and Bishop solicitors. My sincere thanks and appreciation.”

“Bonallack & Bishop recently helped us with writing our wills and the service we received was speedy and professional. Our situation was not particularly straightforward, but the lawyers who dealt with us gave us confidence that they really did know their way around the relevant legislation. We have no hesitation in recommending B&B to others.”

Anita Cordery

“I was extremely pleased with the legal advice and help I received.”

“Thank you for all your help, support and advice Colin”.

“Thank you so much Colin for the help you gave me. The kindness from yourself at a very difficult time was very welcome”.

“I recently required the services of a solicitor relating to an employment matter and as I had previously used Bonallack and Bishop it made common sense to use them again and I knew that they had a specialist solicitor in that area of law.

I feel that their concern for their clients is explanatory at all times from all their staff. From the moment you enter the building they make you feel very welcome as they understand that it can be quite an intimidating ordeal visiting a solicitor. I felt very comfortable talking about my problem with my solicitor in a relaxed atmosphere who showed a great deal of sympathy and patience with me at all times when I was very emotional and upset. He talked honestly about my case and gave me the best advice in a very professional matter. I always felt that he was happy to give me as much time as necessary and never felt rushed.

I would recommend Bonallack and Bishop to anyone requiring legal advice because I feel that they are very knowledgeable, have a good professional ethic and are very friendly. I must say that my whole experience of using Bonallack and Bishop was extremely professional and I would certainly use them again.”

“I would like to thank you very much for the service I received from you.  I have been impressed with your professionalism, your efficiency in dealing with all my queries and your promptness in keeping me informed during the whole process of my lease extension”

“I would to thank you very much for the service I received from you. I have been impressed with your professionalism, your efficiency in dealing with all my queries and your promptness in keeping me informed during the whole process of my lease extension”

Used the Salisbury office of Bonallack and Bishop for conveyancing. They provided a friendly service and good value for money, also good communication throughout.

Richard Bell

“My military clients when buying a property through me need a recommended solicitor who will act fast. When required I introduce them to Bonallack and Bishop who understand their transient lifestyle and are willing to communicate with them wherever they are by phone, post or email in order that the sale is completed as easily as possible. Not every property transaction is straightforward but their team ensures that whether my client is lending money to a Developer, buying a Buy-to-Let residential or a commercial building – their needs can be met. I have had nothing but positive feedback from my clients, and will not hesitate to instruct them again.”

Rachael Troughton

“I used Bonallack & Bishop when buying my first home, as a first time buyer I knew very little about the whole legal process and Bonnallack & Bishop where there every step of the way with timely responses and excellent support and advise. For me they turned the whole process from legal jargon to informative information that i understood! From my initial contact with them to the day I signed on the dotted line took only 6 weeks. I couldn’t be happier with the service and even received a welcome to your new home card of which I thought was an excellent personal touch!”

“I used Bonallack & Bishop for conveyancing of my first house purchase, as i did not know the process I was put at ease with a dedicated account handler who kept me a breast of where we were and anything that was needed. The sale went through without a hitch and within a reasonable period of time, I would not hesitate in referring them to a friend or business”

“When my partner and I finally decided to become home owners, Bonallack & Bishop made the whole process a lot less stressful. Despite being familiar with the concept of buying a house, nothing quite prepares you for doing it yourself. Bonallack & Bishop were fantastic; keeping us up to date with progress on our purchase, clearly explaining everything we needed to know and always responding swiftly to the many questions we had! A friendly and professional experience from start to finish.”

Rebecca Bishop

“I used Bonallack & Bishop for the purchase of my first property. I had a bit of a nightmare with everything apart from the Conveyancing which is the part Bonallack & Bishop very professionally handled. Dealing with Bonallack & Bishop was a very easy process. Fingers crossed I will be using them again in the next few months for a house….. Thanks again. “

Neil Emmerson

“I have used Bonallack and Bishop Solicitors in Salisbury on a number of occasions, preparing joint wills and conveyancing for a property purchases. I have always found them very professional and approachable offering excellent advice and would recommend them to others needing legal assistance.”

Paul Dolman

“The Salisbury office did a great job of helping me to get my first purchase of a property right. Thanks to their diligence I avoided a problem, which could have had serious financial penalties for me. A professional and friendly team that makes customer service a key priority.”

Paul Townsend

“I have used Bonallack and Bishop on many occasions for various different types of requirements from Declaration of Trust, Residential Conveyancing and now a licence agreement for a new office, even some of my staff are using them now. They are really nice easy people to deal with, especially as I needed a great deal of explanation. I would recommend them without hesitation!”

Claire Burroughs

“Our move from our lovely home in Andover was unplanned; we had planned to move the following year but out of the blue our “dream home” many miles away became available. The only catch was we had to achieve our sale and completed purchase in less than 3 months. From the moment we engaged with Anita Wilson the whole process was energised and when matters needed hastening Anita could be relied upon to deliver the appropriate words in a manner that facilitated prompt responses and actions. There can be little doubt what was achieved in such a short time demanded a high degree of efficiency and effectiveness as the number and volumes of searches relating to our new home testify. Throughout the whole process we relied totally on our one point of contact, Anita Wilson, who proved to be extremely knowledgeable in the subject matters.”

Allyson Thompson

“I have engaged over the years the services of many conveyancing agents and found virtually all to have one thing in common, a great offer of fantastic customer service. Without exception, the truth has always been short of the claims. What I have found refreshing about working with Anita Wilson, is that on no occasion has she over promised and then, under delivered. Anita has taken the time to understand what level service and involvement I would like and have consistently delivered it. I am also very impressed with her “win, win approach” for both the client and your organisation, it’s invigorating to see a company that cares for all sides. I would without doubt recommend her to anyone who wants to engage the services of a professional conveyance.”

“I just thought I would drop you a line to say a big thank you to your firm for the wonderful service that Anita provided to me in doing the conveyancing work for the sale of my property in Ramsbury.

The sale certainly wasn’t straightforward at times, but I found Anita was always extremely professional, helpful and supportive throughout the turbulent process of the sale, which helped me to keep a calm head and it took a lot of the anxiety away from me to know that we had someone as capable as Anita on our side moving everything forward.

I will be only too happy to recommend Anita to everyone that I know involved in buying or selling property.”

“In her professional capacity when working on the conveyancing for my new property in Dorset, Anita has always shown courtesy, friendliness and professionalism, and I would recommend Bishopslaw to others based on this service.”

“We were very impressed with the service we were given, correspondence was quick, informative and reassuring. We felt the legal advice given was excellent and resulted in a positive conclusion.”

Commercial Law Department

“Thank you again for dealing so quickly and effectively with this issue.”

“Without doubt, I have had first class service throughout.”

Having dealt with Alan Jenner at Bonallack & Bishop; we were very reassured with his approach to a corporate sales agreement. His knowledge was sound and practical and literally left us with the feeling that no stone was left unturned. We came out of it with what we wanted – a sales agreement and solicitors that we would be confident in using again.

Very good solicitors, there advice was great, having dealt with Alan Jenner at Bonallack & Bishop; we were very reassured.

Alan Jenner at Bonallack & Bishop Solicitors is a very good commercial litigator; he advised us on a dispute which came out in our favour (nobody wins). He was able to understand our case quickly & tailored the approach accordingly. Good advice & very helpful.

Went to Bonallack & Bishop Solicitors office in Salisbury for legal advice on ‘Commercial’. Everything was in good hands, and I was able to get on with my life knowing my problem was being solved.

Maziar Shamsnesad

“I would like to thank you for the sound advice that you gave me. Life is full of pit falls so I am very relieved that I came to talk the proposals through with you before I made any firm decisions.“

“I wanted to say thank you for all your help in this matter. You have been wonderful. I will not hesitate to recommend you in the future. Many, many thanks”

“We would just like to thank you for your help with the problem we were having concerning our right of way. We are just ordinary hard working people who arrived in your office with, what to us was a very worrying problem. You treated us professionally & kindly, for this we thank you.”

Maggie & Steve

James Johnston, many, many thanks again to you for the thoroughly professional, successful and very satisfactory resolution to the matter.

“I would highly recommend using Bonallack & Bishop Solicitors in Salisbury. Excellent communication and prompt service.”

“Meeting was conducted with utmost professionalism, direct, honest and supportive. No legal jargon used to baffle and provided excellent advice. Value for money most definitely!”

“I have referred dozens of clients to Bonallack and Bishop because they consistently offer a professional and reliable service. It’s important my clients get quality service and Bonallack deliver.”

Scott Clancy

“Bonallack & Bishop came highly recommended so I went with them over the firm I used in the past which was somewhat average. All matters were handled professionally and quickly, I was kept in the loop and got the outcome I wanted. I’m very pleased and will call on you again soon. Thanks guys!”

Jim Peacock

“I used Bonallack & Bishop recently to draw up my will, and to assist with some other legal paperwork. I found the two lawyers that I dealt with to be very professional and courteous. I know pretty much what I wanted, and they helpfully pointed out the legal/financial implications of my requests, so I could make an informed decision before going ahead. I would definitely recommend Bonallack and Bishop if you’re looking for professional, yet friendly and reasonably priced legal services.”

Tina Halperin

“In a word, Faultless. You expect any Solicitor to be honest, transparent and legally knowledgeable and of course Bonallack & Bishop are all of these. Where they differ in my view, is with their human approach, coupled to an ability to understand and unravel what can sometimes be extremely complicated circumstances (as in my case) and then provide the best and most cost effective/prudent solution(s) I have no hesitation in recommending Bonallack & Bishop and in particular Tim Bishop who brings complete integrity and professionalism to all of his dealings.”

Geoff Shilton

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If the benefit of a section 42 notice has been assigned, on whom does the landlord serve the counter-notice?

Where the leaseholder who served a section 42 notice sells their flat, the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) makes provision for the section 42 notice to be assigned to the purchaser of that flat so that the purchaser can continue the process of acquiring a new lease. To this end, LRHUDA 1993, s 43(1) states:

‘Where a notice has been given under section 42 with respect to any flat, the rights and obligations of the landlord and the tenant arising from the notice shall enure for the benefit of and be enforceable against them, their personal representatives and assigns to the like extent (but no further) as rights and obligations arising under a contract for leasing freely entered into between

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Related legal acts:

• Leasehold Reform, Housing and Urban Development Act 1993 (1993 c 28)

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LRHUDA 1993: assignment of benefit of a notice of lease extension claim (clauses for transfer) | Practical Law

LRHUDA 1993: assignment of benefit of a notice of lease extension claim (clauses for transfer)

Practical law uk standard clause w-016-8140  (approx. 8 pages).

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Leasehold Enfranchisement Solicitor at Hetts

The Section 42 Notice - Lease Extensions

What is a section 42 notice.

A Section 42 Notice is a document served by a tenant of a long (21+ years) lease on the landlord, setting out the proposed terms of a new lease.

Provided the tenant meets the eligibility criteria, they have a legal right to renew their lease (extend the number of years remaining). In consideration for this extension to the term of the lease, the landlord is entitled to charge a premium. The focus of the Section 42 Notice is primarily to establish an offer to the landlord, setting out how much the tenant is willing to pay to increase the term remaining on the lease (usually a further 90 years).

A qualifying tenant has the right to serve a notice at any time as provided by s.42 of the Leasehold Reform, Housing and Urban Development Act 1993 ("the Act").

Serving Notice on the Freeholder

It is strongly recommended that you take legal advice prior to serving a notice to avoid wasted time and costs. Small errors can deem a notice invalid. Furthermore, valid notices put additional responsibilities on the tenant who served it.

Serve on the Competent Landlord

The notice must be served not only on the ' Competent Landlord ' but also on any other party with an interest in the lease, such as a management company.

The competent landlord may not always be the head freeholder. For example, in some cases, the head freeholder grants a long lease to an intermediary leaseholder, who then grants a sub-lease to the tenant (flat owner). The competent landlord here would be the intermediary leaseholder. However, to complicate matters, the intermediary leaseholder would not be 'competent' if their lease did not have sufficient years left to grant a lease extension. In these cases, it is important to check that the intermediary lease has at least 90 years more than the lease of the flat.

The notice must include:

• The leaseholder(s)' full name(s).
• The address of the leasehold property and correspondence address, if different.
• Particulars of the lease, such as the date it was granted and original parties.
• The proposed premium (we recommend making an offer on the low side to allow room for negotiation).
• Number of years increase (normally an additional 90 years).
• Any proposed changes to the ground rent.
• A deadline for the freeholder to submit a counter-notice of no less than 2 months from the date of the notice.

We strongly recommend that you instruct a solicitor to submit the notice, as any errors could prove costly further into the process. If the notice is withdrawn, a further Section 42 Notice cannot be served until a period of 12 months has expired from the date of the original notice. We have provided a Section 42 Notice Template for those interested.

Can't Find the Freeholder?

If your landlord is missing, then follow the guide on lease extensions with absent landlords .

The Landlord's Response to the Notice

More information is available on our other page: Received a Section 42 Notice .

The landlord has to respond to the notice by the deadline set within it, which is usually 2 months after the deemed date of receipt of the notice.

The landlord's counter-notice is called a Section 45 Notice. For more details on this, see Section 45 Notices.

Tips on Serving a Section 42 Notice

Send the notice by recorded delivery in the event that the landlord denies receipt.

Ensure that you have funds available equal to 10% of the premium offered in the notice, as the landlord can demand this to be paid within 14 days of a request.

Once the notice has been served, the landlord can request access to the property with 3 days' notice, so ensure that you inform any tenants in the flat to make them aware of this.

After serving a notice (valid or not), you cannot serve another notice for a period of 12 months, so ensure you seek legal assistance.

Don't forget to serve any other parties to the lease, such as any management company.

• Practical Law

Can a s42 notice under the LRHUDA 1993 be assigned more than once?

Practical law resource id 6-527-3191  (approx. 3 pages), get full access to this document with a free trial.

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