Counter notice -
a legal notice served by a freeholder or head landlord in response to a statutory
notice served by a leaseholder. It contains the freeholder's valuation of the premium.
Strict time limits apply to serving a counter notice and so it is important to seek
advice from a solicitor.
the lease extension legislation does not apply to commercial property, or property
leased by a charitable housing trust. In addition, buildings within a cathedral
precinct, National Trust properties and Crown property are also exempt, although
the government has indicated that Crown exemption may be waived.
of property ownership which is superior to all others because it has no limitations.
A freehold title can be bought and sold. The owner of the title is registered at
the Land Registry.
Ground Rent -
an annual fee paid by the leaseholder to their freeholder. The lease will give details
of how much the ground rent is, how the rent is paid and how often the amount will
be reviewed (or increased). The fee may increase at set intervals, or remain constant
throughout the term of the lease.
Head Landlord -
a leaseholder who then grants a lease to another leaseholder for a term slightly
shorter than the term of his own lease granted by the freeholder. This has the effect
of creating a chain of leasehold ownership in the same property, and in theory there
could be a number of leaseholders in the chain.
i. grant an interest in a property for a specific term
ii. the document in which the terms of the agreement between the freeholder and
the leaseholder are set out.
a type of property
ownership which is granted by the owner of the freehold for a specific term, the
terms being set out in a lease. Like the freehold, this is also a title which can
be bought and sold, and the owner of the leasehold title is registered at the Land
often known as 'right to buy'. This legal right gives leaseholders
the ability to compel the freeholder to sell the freehold but it only applies in
certain specific circumstances.
Leasehold Valuation Tribunal -
the tribunal which has power to decide
the premium in lease extension cases, their decision is based on the valuation reports
of the surveyors appointed by the freeholder and leaseholder and arguments presented
by each side. This tribunal has similar powers in relation to leasehold enfranchisement
Long lease -
is defined as:
- A lease originally granted in excess of 21 years.
- A lease which terminates on marriage, death or a date that is unknown.
- A shared ownership lease where the leaseholder's share is 100%.
- A lease which contains a clause providing a right of perpetual renewal.
- An expired long lease where the landlord has not served notice terminating the tenancy.
Marriage value -
this is the increase in the value of the property following the completion
of the lease extension, reflecting the additional market value of the longer lease.
Normally this has to be shared with the freeholder. However, if the remaining lease
is more than 80 years, the freeholder is not entitled to a share of the marriage
value if the lease is being extended under the statutory process. This is why 80
years is such an important point in lease extension cases because the premium increases
significantly once the term drops below that 80 year mark.
a term used in the law to indicate a token payment – essentially it means nil.
you must have owned your residential property for at least 2 years, own a lease
which was a long lease when it was granted and the property is not in a small category
of exemptions. If the property was part of a shared ownership scheme, you must own
the price paid to a freeholder in exchange for the extension of the lease. It is
calculated by surveyors, based on a number of factors including the value of your
property before and after the extension and the terms of the lease.
Shared ownership -
to encourage affordable home ownership, where a buyer purchases a percentage of
the property and rents the remainder, building up to 100% ownership over time.
Stamp duty -
land transaction tax levied by the government. In lease extension cases it only
applies to the premium, and so if the premium is below the stamp duty threshold
it will not apply.
lease extension -
a lease extension granted as a result of rights
given to residential leaseholders who have owned their property for two years. The
law enables the leaseholder to compel the freeholder to grant the extension, which
will be for 90 years at a peppercorn ground rent.
Statutory deposit -
law allows a freeholder who is served with a statutory notice to demand a deposit,
because the freeholder is entitled to have his reasonable legal and valuation costs
in granting an extension paid by the leaseholder. The amount of the deposit is either
10% of the premium stated in the notice or £250 whichever is greater. Your solicitor
will require you to make this deposit available before the notice is served.
the notice served by a leaseholder on a freeholder in statutory
lease extension cases, containing the demand for a statutory lease extension and
the proposed premium. The notice can be registered at the land registry and the
benefit sold with the leasehold title, so that the purchaser can continue the lease
extension case. There are very specific requirements in the legislation for the
contents of the notice, so it is important that it is drawn up by an experienced
ownership of property
in a form which is clearly defined and in the case of land is enforced by registration.