Serving a s.42 Notice under the Leasehold Reform Housing and Urban Development Act 1993

In these unsure times following the Brexit vote people may be more inclined to stay in their current properties than to move on, however with many leasehold properties having been created years ago you may find yourself facing a situation where your lease is due to expire in only 50-60 years thereby lowering the value

Home » Uncategorized » Serving a s.42 Notice under the Leasehold Reform Housing and Urban Development Act 1993

sportnoy-sbIn these unsure times following the Brexit vote people may be more inclined to stay in their current properties than to move on, however with many leasehold properties having been created years ago you may find yourself facing a situation where your lease is due to expire in only 50-60 years thereby lowering the value of your property significantly.

As a result the best possible method of ensuring the sustained value of your property is to extend your lease. Unfortunately all too often landlords are not willing to negotiate sensibly and at a proper market value. In that case your only option is to seek to extend your lease by virtue of your entitlement under the Leasehold Reform Housing and Urban Development Act 1993.

This route entitles you to demand an extension of 90 years over and above the remainder of your current term and for the ground rent to be reduced to a peppercorn (i.e Nil). Whilst the Landlord cannot refuse your request if carried out properly, you will be required to pay a premium to either be negotiated between the parties or determined by a Tribunal.

In order to instigate this process a Notice under s.42 of the Act must be served on the Freeholder and other potential parties. As it is a Notice required under a particular Act of Parliament there are many specific requirements and technicalities which must be followed, failing which the Notice will be deeded invalid.

Having dealt with many such Notices on behalf of the Landlords who receive them, and even upon considering those served by other parties on behalf of Tenants who have come to us to advise them after the event, it is noticeable that often people are making even basic mistakes which could invalidate the Notice and set the whole process back almost 12 months.

Issues range from failure to put the proper address in the notice to which the property relates, failure to set out the terms you want to incorporate in the new lease extension, to even failing to serve the notice on a Management Company who is a party to the lease.

Whilst each of these errors have a differing degree of effect, they can all raise questions as to the validity of the notice and can therefore significantly increase the costs involved as the parties will likely move into litigation over whether or not the notice is valid, whether or not it should be withdrawn and re-served, or whether they will agree to just proceed in any event.

The consequences of failing to serve a valid notice range from simply a need to re-serve the notice, which usually leads to an increase of costs which the Tenant is liable to pay, to potentially needing to withdraw the original notice which comes with a penalty that the Tenant cannot re-serve for a further 12 months. In and of itself it may not seem much, however with each year that passes, the premium payable to extend the lease rises and so you could easily see a significant jump in the premium payable, aside from the delay that arises.

I therefore always advise that if you are thinking of extending your lease in these times, always ensure that you have an experienced advisor who can assist in drafting the Notice who can then help you navigate the pitfalls of the technicalities involved.

Having now dealt with many cases over the last 4 years for both Landlords and Tenant, please feel free to get in contact with me to discuss your needs and to see if I can help you to ensure a valid Notice and a hassle free Lease Extension. 

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