Sussex Lease Extensions Blog

Section 42 Notices: The Tenants Notice

A Section 42 Notice is the formal notice a leaseholder issues to their freeholder when claiming their legal right to a statutory lease extension.

Also referred to as the Tenants Notice, a Section 42 Notice allows leaseholders to begin formal proceedings to extend their lease. The lease extension adds an additional 90 years to the current unexpired term and reduces the ground rent to a peppercorn (zero) for the duration of the new lease.

Why do you need to serve a Section 42 Notice?

Informal negotiations with freeholders often do not result in reasonable terms being agreed. Freeholders can propose short extensions, high escalating ground rents and high premiums.

By serving a section 42 Notice, the freeholder cannot argue about the terms of the lease extension other than the amount of the premium. If this cannot be agreed, the premium and the rechargeable fees can be referred to the First Tier Property Tribunal (Residential) for resolution.

Preparing to serve a Section 42 Notice

In order to serve a Section 42 Notice you must appoint a lease extension surveyor to value the cost of an extension. An incorrect offer value can make a Notice invalid. Once you have a valuation, a solicitor is instructed to serve the S42 Notice on the freeholder.

What next?

The freeholder has two months in which to either accept or reject the Section 42 Notice. Generally the freeholder cannot reject a Notice unless it is incorrectly served or contains incorrect or insufficient information.

If a freeholder rejects the premiums offered in the S42 Notice, as they often do, then the premium is negotiated by the Surveyors acting for the freeholder and leaseholder.

If an agreement cannot be reached then either party can, after an initial two month period, refer the matter to the First Tier Property Tribunal (residential).

Extending your lease can be a timely and costly process. Speak to the team at Sussex Lease Extensions today on 01903 872 211 to ensure it runs as smoothly as possible.

This entry was posted on Monday, October 7th, 2013 at 9:50 am and is filed under Lease Extension Advice, Leasehold Valuation Tribunal, Statutory Lease Extensions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.