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Jazmin Perry

This is Part 3 of The Lease Extension Guide, which will be useful for both long leaseholders looking to extend their leases, and landlords of residential property subject to such long leases. Part 3 will consider in more detail how a leaseholder can commence the statutory lease extension process, the consequences of serving the Initial Notice, and Part 4 will consider what happens after that.

A leaseholder who has less than 90 years left to run on their lease should consider applying for a lease extension.  Failure to do so could make the lease more difficult to sell or mortgage, and as the remaining term reduces, the premium payable for an extension will increase. 

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How does a leaseholder commence the statutory lease extension process?

The first thing a leaseholder will need to do is appoint a specialist leasehold enfranchisement solicitor who will be able to assist with the legal aspects, this can be complicated and there are many pitfalls to avoid. We can assist leaseholders with this.

Next, the leaseholder will need to obtain a valuation of how much it is likely to cost them to extend their lease. We have many specialist surveyors who are experts in lease extensions who we can recommend. The leaseholder’s surveyor will provide them with a best and worst case scenario price for the lease extension to enable the leaseholder to budget accordingly.

Once the leaseholder has the valuation report, the solicitor can serve what’s called an Initial Notice in the prescribed form on the landlord.


Consequences of serving the Initial Notice

The leaseholder will be responsible for their own legal and valuation costs, and they will also be responsible for their landlords / the freeholder’s legal and valuation costs from the point of serving the Initial Notice. However, this does not apply to all of the landlord’s costs – a leaseholder is not liable to pay the landlord’s costs of negotiation of the premium or his costs of appearing before the First-tier Tribunal (Property Chamber) (FTT) if the terms of the new lease cannot be agreed.

The landlord’s costs must be reasonable and the FTT can rule that they are unreasonable.

If the leaseholder decides to withdraw from the claim, then they will be liable for the landlord’s costs incurred up to the date of withdrawal. If the leaseholder withdraws, they also will not be able to serve another notice for a period of 12 months from the date of withdrawal.

Following receipt of the Initial Notice, the landlord is then entitled to ask for a statutory deposit which represents 10% of the proposed price stated in that Initial Notice. This is payable within 14 days of request. 

The next stage is for the landlord to serve a counter notice, which we will deal with in Part 4 of The Lease Extension Guide.

Part 4 of The Lease Extension Guide will consider what happens after the leaseholder serves the Initial Notice.

We are experts in this area and we have an experienced Residential Property team and Property Disputes team who can assist leaseholders and landlords with lease extension and lease enfranchisement matters.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

Get in touch

If you have any questions relating to this article or have any legal disputes you would like to discuss, please contact the Dispute Resolution team on

[email protected]
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