Residential Lease Renewal

Residential lease renewal is the legal process in which the contractual agreement between the owner of the house/flat and the tenant has to be renewed before the end date of the lease. 

The tenant should serve notice on the landlord well in advance.  During renewal the general clauses of the agreement such as rent and lease term could be negotiated between both the parties.

Natasha Price

01277 889251

01277 219125

Billericay, United Kingdom

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How to extend a residential lease

Statutory Procedure:

  • The leaseholder can propose to extend the lease by serving a Section 42 Notice. The tenant is qualified to do so if the existing lease has more than 21 years left.  The lease can be extended up to 90 year and this will be added to the period left on the existing lease.  The cost of the lease could be higher however, the ground rent would be almost nil.
  • The leaseholder will have to pay premium to the freeholder and this may vary depending on the property in question.
  • The legal fees will be borne by the leaseholder.
  • This procedure would be time consuming.

Once the tenant issues the Notice, landlord will either accept the proposed terms or reject it or he might propose few additional or different terms.  The landlord has a time limit of 2 months to respond.  At times both the parties negotiate and reach a final conclusion and the agreement is done.

Non-statutory Process:

  • There is a direct negotiation between the landlord and the tenant.
  • The landlord can ask the tenant to pay a nominal ground rent and in return he can offer a comparatively shorter term.
  • The lease extension can be done at a lower premium.
  • The tenant can save on the legal fees.

However, choosing a suitable option from the above, entirely depends on the landlord and the tenant, both the procedures have their own pros and cons.


What happens when a property lease expires?

  • The agreement between the landlord and the tenant comes to an end once the lease expires but that does not mean you have to immediately vacate the property.
  • The tenancy will still continue on the same terms unless and until the landlord decides to discontinue it.
  • You will be converted to a monthly tenant if the landlord agrees to accept rent after the termination of the lease.
  • If the tenant wishes to continue further, he can sign a new lease.
  • The tenancy will come to an end if the tenant does not wish to continue staying at the property and surrenders it or if the landlord serves a legal notice on the tenant to get back the possession.  However, the landlord cannot take the possession of the property immediately after the lease expires except, he has court orders to do so.

 Your rights when renewing a lease

  • If you own the property you have the right to extend the lease by 90 years at a very nominal or zero ground rent provided you qualify the below terms:
  • The original lease should be for more than 21 years.
  • It is necessary to own the flat for more than 2 years, either on your name or else on your company’s name.
  • You have the right to negotiate on the lease terms.
  • Under Leasehold Reform, Housing and Urban Development Act 1993, the leaseholder is authorised to purchase the property, provided there are more than 50% qualifying tenants involved in the enfranchisement claim. The leaseholder has to serve Section 13 notice on the freeholder in which they have to mention the amount they propose to pay for the property. This figure has to be reasonable and the valuation needs to be done by RICS accredited surveyor.
  • During this time the freeholder has the right to arrange for his own surveyor and get the valuation of the property done.

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