Voluntary Lease Extension Outside the Act

Is a Voluntary Lease Extension – Outside the Act – the Right Way Forward for Me?

It may initially appear cheaper and quicker to negotiate an ‘arm’s length’, informal or Voluntary lease extension with your landlord outside the “Act” (the Leasehold Reform Housing and Urban Development Act 1993) – whilst this may seem, on first glance, easier and cheaper, there are very real potential drawbacks and risks.

Do you have a question about a voluntary lease extension? Call our expert team on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.

As a leaseholder, in the end, you have to make a practical choice on whether to rely on an informal voluntary lease extension or to choose the formal (statutory) route. And one of the factors you will consider is inevitably overall legal costs – but before you make any final decision, you should always consider the following:

1. The timescale for extending your lease

Freeholders can withdraw on any informal or voluntary leasehold extension at any time, leaving leaseholders with no other option than to re-start the whole lease extension process on a formal basis using the Act (provided, of course, that they qualify for the right to do so).

Timescales can slip and therefore you cannot force the pace when trying to extend your lease on a voluntary basis. Negotiating informally means that you are entirely at the whim of your landlord as to how swiftly the leasehold extension can be wrapped up.

And whilst some freeholders are decent and ethical, sadly, some simply are not.

2. Valuation Date

If a lease’s residual term drops below 80 years, real valuation issues arise. Issuing a formal statutory notice to your landlord of your wish to extend your lease fixes the valuation date at the date the notice was served.

If there is no formal statutory notice served on your landlord, there is no “fixing” and the landlord will be entitled to request a greater premium if the lease falls below 80 years during voluntary negotiations [this is because, when leases drop below 80 years, the landlord is entitled to an additional payment – known as the “marriage value”].
Click here to read more about marriage value

In cases where a lease is approaching the magic 80 year cut off date, it’s unfortunately far from uncommon for landlords to agree to a voluntary leasehold extension only to drag their heels until the lease drops below 80 years – only then to turn their back on any agreed informal price and to then demand the additional “marriage value” premium.

3. The terms of your lease extension

When negotiating any voluntary leasehold extension outside the Act, there are no real limits on what can be include in the terms of the lease. As a result, negotiating any informal lease extension can be tricky – and can even lead to the abandonment of the whole leasehold extension.

When issuing a formal application under the Act, when a statutory notice has the served, negotiations are often quicker and less complex – as the freeholder knows exactly what he has to agree to.

Whilst amending or updating the terms of your lease can be useful if you’re a leaseholder, make sure you have specialist legal advice. When it comes to informal valuations, too many people do without a solicitor – relying on their freeholder to play fair.

Unfortunately, in the absence of expert legal advice, you’re entirely at the mercy of your freeholder when it comes to amending your lease. What may look like entirely innocent “modernising” clauses could cost you dear in the future.

One trick played by many freeholders is to update the ground rent review clause in the lease – in exchange for an apparent concession perhaps with a lower premium or a longer lease extension. But that ground rent review update could be catastrophic – with the freeholder building in significant increases in ground rent which build up over the years, either making your lease very expensive to run or alternatively, making your property effectively impossible to sell.

And even if you do agree a fair price for your voluntary lease extension, there is absolutely nothing you can do to stop your freeholder changing the terms of any stage – another reason why the statutory route is safer and less dangerous.

Don’t ever agree to any change in your lease without making entirely sure you understand what it means for you now and in the future – and the best way of doing so is to get a specialist solicitor on your side.

4. The costs of extending your lease on a voluntary basis

Increased legal costs can result from lengthy and complicated negotiations. If a leaseholder has to restart with a statutory notice, legal costs for work completed in the unsuccessful voluntary process must be paid as well as the legal costs of a new formal application using the Act. Landlords can be left with unrecoverable legal bills if their solicitor has not acquired undertakings from leaseholders’ solicitors to pay costs.

The size of the premium that the freeholder ends up with with may also increase if the leaseholder is tempted to do without specialist independent valuation advice.

What’s more, future lease extension or freehold purchase will be more expensive if ground rents have been maintained or increased. Why? Because the amount of ground rent payable is one of the factors taken into account when coming up with the lease extension premium. So increasing your ground rent also means you’re increasing the cost of any future lease extension.

Leaseholders also have the right to challenge the reasonableness of the landlord’s costs if extending under the Act – something that simply not available with any voluntary lease extension.

The Act does not dictate that the statutory process must take a long time – it merely delivers timescales enforceable in the court or tribunal. Both parties should consider using a notice to protect them if matters do not proceed smoothly, even where the extension is amicable and could otherwise be done outside the Act.

Best to wait for two years ownership before applying for your lease extension?

Leaseholders who have not yet owned their lease for two years should consider the value of waiting and proceeding within the protection of the Act rather than being held to ransom, before rushing into a voluntary extension.

Voluntary Lease Extensions – are there actually any advantages?

Yes, in some circumstances, an informal lease extension may be the best way to go – but that depends entirely on your freeholder – and in particular how reasonable they are and whether they’re willing to cooperate.

If you do get a helpful freeholder, here are the advantages of going down the voluntary route;

  • Speed – you’re not hampered by a statutory timetable – so with swift and cooperative freeholder, the whole thing could be tied up much more quickly
  • You can vary the length of the lease extension – the statutory route gives you just one option – 90 more years on your lease. In contrast an informal lease extension means you can agree an extension for whatever period you like with your landlord. This often comes in most useful when your lease is approaching the crucial 80 year stage, or when you are thinking of selling up and know that the relatively short length of the lease is going to mean problems getting a good price. You can agree any length of extension you like – as little as 10 years is not unusual. but these sort of short lease extensions are far from perfect. Apart from all the dangers listed above, you will also find that you will probably end up paying more proportionately for a short lease than the full 90 years, and bear in mind you’re still going to have to pay potentially legal and surveying costs for you and your freeholder. So while it may resolve a problem, a short lease extension may well prove quite an expensive solution.
  • You can vary the terms of your lease – if cash is short but you need to extend your lease, then some landlords agree to a lower premium in return for an increase in ground rent. But beware. This could rebound on you – as indicated above, an  increasingly higher ground rent in the future could affect the value of your property or even make it virtually impossible to sell on the open market.

What are main differences between the statutory and voluntary lease extension routes?

Can I just approach my landlord for a lease extension? Yes you can.

The question should perhaps be: ‘why would you want to approach your landlord for an informal lease extension?’

The easiest way to answer that and other questions is to compare the advantages and disadvantages of that making an informal lease extension with making an application under the Leasehold Reform Act 1993.

Here is a summary of those differences:

Questions Informal lease application Application under the Leasehold Reform Act 1993
Do I have to have owned the property for 2 or more years before I make the application? No. Yes.  Two years is the minimum period you must have owned (but not necessarily lived in) the property.
I am guaranteed a ‘peppercorn rent’ with the extended lease? No – your landlord/freeholder could insist on a higher ground rent. Yes.  You will obtain a peppercorn ground rent for the combined period covering the remaining duration of the original lease and the extended lease.
Is any agreement to extend my leases I make with my landlord binding? No.  Your landlord can initially agree to extend the lease and then change his/her mind. Yes – once you have served your initial notice on your landlord they become part of the process and must respond in line with the requirements of the Act.
Can I expect the premium for the extension to based on current market rates or a recognised formula and be reasonable? No.  There is nothing to stop your landlord/freeholder from asking for a grossly inflated premium for your extension and demanding payment of suspiciously hefty costs.  He or she will probably be aware that the calculation of the premium doesn’t have to be guided by the relevant schedule of the Leasehold Reform Act 1993. Yes.  Schedule 13, Part II of the Act states specifically that the premium shall be the total of:

·       the diminution in the value of the landlord’s interest in the flat

·       the landlord’s share of the marriage value

·       Compensation for loss arising from the grant of the new lease.

Can I challenge my landlord/freeholder about the level of his costs and the leasehold premium if I consider them to be unreasonable? Yes.  However your landlord is under no obligation to reduce the level of his costs and the premium as a result of your challenge. With informal lease applications, negotiations can rapidly sink to the level of ‘take it or leave it’. Yes and under the Act you have the right to formally challenge the reasonableness of your landlord’s offer and then, if agreement still can’t be reached, to take your case to the First-Tier Property Tribunal an for independent decision on the matter.
Can I expect my landlord to grant me the extension within a reasonable timescale? No.  Your landlord is not obliged to tie him/herself to any pre-agreed timescale and has the potential freedom, if he is unfortunately grasping and calculating enough, to delay granting you your lease extension until the remaining duration of the original lease has fallen below eighty years and the marriage value can be factored into the premium (it remains at 0% whilst the lease has eighty or more  years to run). Yes.  The Leasehold Reform Act sets out an application timetable binding on both leaseholder and landlord/freeholder.  The clock also stops ticking on the valuation of your property on the date on which your initial notice under the Act is served on your landlord.


Wherever you live in England and Wales, we can help you extend your lease- whether you decide on the informal or statutory route. We can manage the process from start to finish,  keeping in contact with you regularly using email, telephone – or Zoom video if you prefer .

Our team have helped around 10,000 people extend their lease and buy the  freeholdof their block nationwide. We can help you too.

  • Call our experts now FREEPHONE 0800 1404544 for a FREE initial phone consultation and a FREE quote for your lease extension, OR
  • Get in touch using the contact form below.

    Executors – the right to extend a lease

    Do executors have the right to apply for a statutory lease extension?Executors – the right to extend a lease. Specialist Solicitors. Logo Of Association of Leasehold Enfranchisement Practitioners

    Yes – and this can prove very useful. Provided that they do so within two years of the date of grant of probate, the executors can apply to extend the lease on a residential leasehold flat or house by serving a formal notice of claim – in the form of what is known as a section 42 notice under the Leasehold Reform Act 1993.

    The only limitation is that the deceased must have qualified for that lease extension themselves – including having owned the property themselves for a period of at least two years.

    As a result, an executor can either go ahead with extending the lease themselves, or can put a property on the market with the benefit of the notice of claim, which can then be assigned onto the purchaser – so the new purchaser immediately has the right to a leasehold extension upon completion of the sale without having to wait two years, and the vendors do not have to go through the expense of paying to extend the lease themselves.

    What is an informal lease extension?

    It’s also worth noting that although to qualify for a statutory or formal lease extension, certain conditions need to have been met by the deceased (and by applying for a statutory lease extension, the freeholder cannot refuse a 90 year lease extension at a reasonable price),  there is always the possibility of a an informal or voluntary lease extension – which can simply be negotiated with the freeholder.

    I am an executor – why might I want a lease extension?

    That’s simple.

    An executor’s duty is of course to collect in and distribute the deceased’s estate. But if the estate includes a flat (or more unusually a leasehold house) with a short lease, then arranging for a lease extension should increase the value of the flat – and thus the value of the estate – not to mention the marketability of the property in question.

    And how short is a short lease? Anything below 70 years gets increasingly hard to sell – not least because these days many mortgage companies simply won’t loan against a flat with a lease term that low. And a lot of purchasers aren’t keen on flats with less than 80 years left  to run.

    And that 80 year point is important. Why? That’s because the very moment that the  remaining term drops below 80 years, the price of the lease extension goes up. So again if the remaining lease term is approaching 80 years – that’s another good reason to extend the lease , to avoid an increased premium payable to the freeholder t.

    Need expert help with your lease extension?

    Our team is really specialist – lease extension work is all they do for clients with leasehold property throughout England and Wales. To instruct us, or for FREE initial phone advice,

    • call us now on FREEPHONE 0800 1404544 OR
    • email us using the contact form below.

      Buying A Flat – Five Key Points About Leasehold Extension

      There are many different things to think about when you are buying a residential leasehold flat or apartment, or if you’re buying one of those rare beasts – a leasehold house. One of the main considerations is that the land on which your property is built does not belong to you, and this raises some important considerations to be aware of.

      1. Term of the Lease Remaining

      The first thing to look at is just how long there is left on the existing lease. The length of the lease is the time remaining for your ownership of the property. If the lease expires, the ownership of your property passes back to the freeholder, unless you have agreed to extend the lease beforehand.

      2. Rights to Extend Your Lease

      Most people who are buying a residential leasehold property just don’t understand their right to lease extension. This isn’t really surprising, as leasehold extensions are a complex area of the law with which many estate agents are not familiar and which many conveyancing solicitors don’t take the time to explain to their clients. In basic terms, once you have been the owner of your flat for two years – even if you have never lived there yourself – you have the legal right to compel your freeholder to extend your lease by a period of 90 years, whether they like it or not.

      As the period on you lease starts to run down, getting it extended becomes increasingly important. As well as facing the prospect of eventually handing the flat back to the freeholder, many property owners find out the hard way that flats with a short lease are difficult to get a mortgage to buy and therefore hard to sell. It’s also important to realise that if you want to extend the lease straight away after purchase rather than waiting for two years, the person who is selling the flat to you can start the process of extending the lease before the sale goes through and then pass that on to the buyer once the deal is completed.

      3. Service Charges

      It is standard practice for owners of residential leasehold properties to pay an annual service charge. These charges can be anything between from a few hundred pounds to a few thousand pounds every year. The service charge goes to the freeholder, and covers things like upkeep of the land and the building. Leaseholders are legally entitled to ask their freeholder for proof of how they are spending this money, and if freeholders cannot or will not provide receipts or evidence, it is a criminal offence.

      4. Reserve or Sink Funds

      Occasionally, a leasehold tenant is asked to pay into an additional fund called a sinking fund or a reserve fund. This find is designed to cover any unexpected disasters or major repairs to the building.

      5. Ground Rent

      It is a common clause in any lease that the tenant pays an annual ground rent to the freeholder. This is because you are classed as the temporary owner of your property, but are legally only renting the ground which it is built on. Ground rent is usually not a large sum, but if the lease says it has to be paid then there is no way around that. Look carefully at the lease to see what it says about increases to the ground rent. It is normal for there to be regular increases to ground rent, but ensure that you are not signing up to something which allows the freeholder to increase the ground rent substantially after a few years.

      However sometimes there are disputes about issues surrounding ground rent arrears – don’t worry if this applies to you, as we can help – our team also specialise in ground rent arrears cases.

      Being a property owner can be an expensive business and it might sometimes seem that the list of costs is endless. Many of the costs are associated with essential repairs and maintenance which you would have to cover yourself if you owned the property outright, and over the years the costs will balance out.

      It might sound like there are many drawbacks to owning leasehold properties, but they are often still a good investment. Apart from providing you and your family with somewhere to live, having a leasehold flat or apartment can be the first step on the property ladder and a way to owning a freehold house in the future.

      Before taking steps to buy a leasehold flat or other property, make sure that you get a specialist property solicitor to look over the lease and explain it to you in plain English. Residential leases are not standard and can differ hugely in their terms, so it is important to know exactly what you are getting yourself into and what your obligations are, both now and in the future.

      Interested in Leasehold Extension? Contact us today

      Our team are genuine UK leasehold extension experts – so for great advice on extending your lease, please contact us today;

      • Call us now on FREEPHONE 0800 1404544, or
      • Send us an email using the contact form below.

      [si-contact-form form=’1′]

      Six Mistakes to Avoid When You Extend the Lease on Your Flat

      Given that there are approximately 1.5 million long leasehold residential flats in England and Wales, it simply amazing that so many flat owners are simply not aware of their legal right to demand a 90 year lease extension from their freeholder. And bear in mind that every single one of those flats is going to need a lease extension at some stage – unless the owner simply wants to give up all their legal rights and hand the ownership of the flat back to their freeholder. And the vast majority of flat owners won’t find that they are able to leave it until the last minute – because without a lease extension, a short lease flat becomes increasingly difficult to sell.

      However, if you are one of those flat owners who are aware of your legal rights and are considering extending your lease at some stage in the future, there are a number of mistakes would you really must make sure you avoid.

      Marriage value and the 80 year trap

      Firstly, if at all possible, ensure that you make your original application for a lease extension well before the remaining term of your lease drops below 80 years.

      Why? It’s really a no-brainer. On the day, yes the day, that your lease drops below 80 years, your freeholder is entitled to charge an additional premium to you – this is known as the marriage value and even on a relatively inexpensive flat, marriage value will mean a few thousand pounds extra to pay. So, ideally, get your lease extension sorted out well before the 80 year period looms – or if not, don’t rely on making an informal agreement with your landlord. Make sure you appoint a specialist solicitor and make a formal statutory application for a lease extension to protect your interests.

      The need for a proper lease extension valuation

      Secondly, don’t try to cut corners and avoid the costs of a proper valuation carried out by a specialist lease extension surveyor. Relying on your freeholder’s estimate of the value of a lease extension, or on the valuation provided by the landlord’s own surveyor, is likely to cost you.

      Equally, although they are cheaper, we don’t recommend what are known in the industry as “desktop valuations” – i.e. valuations based just on the paperwork involved without any actual physical viewing of the flat. These are certainly cheaper, and they take less time to organise, but inevitably they are more generalised and won’t take in to account the specific circumstances of your flat. Cutting corners in this way could again add significantly to the price you have to pay when you come to extend your lease.

      The risks of an informal lease extension

      Thirdly take particular care. If you’re going down the route of an informal lease extension, i.e. an extension which is negotiated and agreed with your landlord informally without the involvement of the formal statutory process.

      One of the biggest risks with the informal route is the unscrupulous landlord. Sneaky landlords have been known to apparently agree a price for an informal lease extension only to delay the procedure and then withdraw their consent. In these circumstances, there’s nothing you can do apart from to start the whole statutory lease extension process from scratch. If there’s no urgent need to extend your lease, then this might not prove to be a disaster – but if your lease is approaching that critical 80 year period, then you need to be particularly beware.

      If a landlord can delay you applying for a formal lease extension until the remaining term drops just one day below 80 years, he can then demand the marriage value. This is far from unknown. Equally, if you’re in the process of selling a property, this can give the unscrupulous landlord, a real advantage – there’s nothing to stop them simply upping the price they require as you get near to exchanging contracts for the sale of your flat – and again there’s nothing you can do apart from to start the whole statutory process from scratch.

      Your lease extension -best planned in advance

      Fourthly – do make sure that you plan in advance. Don’t leave your lease extension until the last minute or until it becomes particularly urgent. Getting your lease extended well in advance is going to be simpler and probably cheaper.

      Why an early lease extension will save you money

      Fifthly – don’t delay. Every day your lease gets shorter, which means that the price you have to pay for your lease extension increases. Add in the fact that currently the housing market is rising and you are left with a further incentive to extend your lease sooner rather than later – because part of the valuation of the premium you need to pay to extend your lease is based on the value of your property – and if that goes up, you are going to have to pay more for your extension.

      DIY lease extension – don’t go there

      Finally – don’t try to do it yourself. The procedure involved in lease extension is tricky and timescales are crucial. When you do come to appoint a solicitor, don’t just pick the first property solicitor who comes to mind – make sure you get a specialist in this field, even if it means you can’t pick a local law firm and have to deal with your solicitors, instead, remotely, by email and phone.

      Most property and conveyancing solicitors only come across lease extensions once in a blue moon – some have never even dealt with one – so you don’t want to rely on them. Instead, do your research and make sure that appoint a solicitor who spends all their time on lease extension and knows both law and procedure backwards.

      Want To Know How to Extend the Lease on Your  Flat?  Contact us today

      Our expert Lease Extension Solicitors can advise you wherever your flat is situated in England and Wales and we don’t even need to see you – taking your instructions by e-mail, phone and Skype video:

      • Just call us on [01722] 422300 for a FREE initial phone consultation and a FREE quote for your lease extension
      • Complete the contact form below to email us

        Leeds Lease Extension Solicitors

        If you own a flat in Leeds you will need to extend your lease at some point. The sooner you do this, the less expense you will face and our specialist lease extension team can help.


        Many property solicitors make the mistake of trying their hand at lease extensions under the assumption that they can’t be that difficult, only to discover that the various complications involved led them to make costly mistakes. Such complexities include:

        • Various deadlines which must not be missed

        • Confusing legislation surrounding lease extensions

        • Obstinate landlords

        • Landlords who knowingly hinder negotiations in order to let your lease run below 80 years (therefore costing you far more to extend it)

        • Taking problematic landlords to the First-Tier Property Tribunal

        • The difficulty of choosing an appropriate surveyor to value the lease

        • Dealing with matters after completion


        Our lease extension team is not simply a group of property solicitors who do the odd bit of lease extension work. It is a dedicated team of three specialist lease extension solicitors with many years of experience and thousands of lease extensions under their belts –  lease extension and collective enfranchisement is all they do..

        We are also members of the Association of Leasehold Enfranchisement Solicitors. So, if you are looking for experts, we can help.


        Lease extensions very rarely require client and solicitor to meet in person so we should be able to conclude matters using telephone, email or Skype contact.

        If you would like to learn any more about a lease extension and how we can help you, email our team using the contact form below, or call 01722 422300.