More about your Council Lease

Lease extension is a statutory right for 100% owned flats provided you own a long lease (more than 21 years) and have owned it for more than two years. It enables you to extend your lease by 90 years (on top of the length of the term currently remaining on your lease). The new lease will be as far as possible on the same terms as the current lease subject to minor modifications and exclusions.

The process is carried out in accordance with the Leasehold Reform Housing and Urban Development Act 1993. The procedure is very process driven and there are strict time limits.

The following is intended as a summary of information about extending your lease using the statutory route, but it is not a substitute for legal advice. The LEASE website www.lease-advice.org also provides free information and covers the process in more detail.

Why might lease extension be advantageous to me?

When the number of years remaining on your lease falls below about 70 it becomes more difficult to sell the property because:

• Prospective buyers may find it difficult to secure a mortgage
• The property may prove more difficult to sell on 
• Lease extensions become more expensive the shorter the current lease term

Provided you have correctly served your notice, your purchaser will have the benefit of your right and will not have to qualify themselves.

How is the price agreed? Do I need a Valuer?

You must serve a Section 42 Notice on the freeholder (the Council). This is s formal legal notice that sets out your desire to renew the lease. We would recommend that you discuss extending your lease with a valuer before you proceed. They will indicate the valuation for the extension in the 

Section 42 notice. We suggest that your valuer provides a “best” and “worse” valuation as the eventual price is likely to be agreed somewhere in between. 

A valuer will help you:

• Carry out the valuation to assess the premium 
• Give you advice on the offer you make to us 
• Advise you on our response to your offer 
• Negotiate with the Council 
• Provide expert evidence if necessary at the First Tier Tribunal

The Royal Institute of Chartered Surveyors (RICS) can recommend valuers (surveyors) in your area.

You should also think about appointing a solicitor at this stage. There is a set procedure for agreeing the price. The valuation will be fixed at the date you apply for the extension regardless of how long it takes for us to agree the price. 

Freeholder’s Counter Notice

There is a strict period of two months during which the Council must respond to your Section 42 notice. We will either:

• agree your right to the new lease and, either accept the terms, or propose what we consider to be the valuation. There will then be a period of between two and six months to finalise the valuation and during this time either party may apply to the First Tier Tribunal or
• not admit the your right and give our reasons, which will need to be determined by the County Court or prove to you that the building is going to be demolished

If we fail to respond to your notice, you have the right to apply to the County Court and they may make a vesting order and will determine the terms of the extension on the terms first proposed in your section 42 Notice.

How will the Council’s valuer work out the Council’s valuation?

The Council’s valuer will consider the following when assessing the premium:

• The reduction in value of Royal Borough of Kingston upon Thames freehold interest by the lease extension, which in some cases may be loss of a ground rent
• If your current lease has less than 80 years remaining the valuation will take account of a marriage value which is the difference between the value of our interest in your flat under the current lease arrangements and our value in the lease with the additional 90 years and is shared equally between us 
• Compensation for loss arising from the grant of the new lease. This is compensation for our loss in respect of other leases that have not extended their interest.
• Our reasonable costs of dealing with this application (as noted below).

How much will it cost?

You will be responsible for all your costs (valuer and solicitor) and our legal and valuation costs as well. The Council’s valuers’ fee will be a minimum of £780 but may be more if the work involves more work or negotiation. The Council’s legal fees will be a minimum of £1500 and will depend on the time taken to deal with any further issues raised. 

Who should I send the Section 42 Notice to?

Head of Legal Services

Property Team

South London Legal Partnership

Guildford House 

67c St Helier Avenue

Morden 

SM4 6HY

Who should I contact for further information?

The Leasehold Advisory Service Tel: 020 7832 2500 

Buying the Freehold

Alternatively, leaseholders of flats originally purchased under the Right to Buy scheme can get together to buy the freehold of their building provided at least two thirds of the flats in the building have been sold on a lease. This is known as collective enfranchisement. 

Please note that you cannot buy the freehold of a single flat in a block.