How to Extend Your Lease: Statutory vs Informal Routes
Statutory Vs Informal- What’s It All About?
This first post is dealing with possibly the most important decision before starting your lease extension and the route in which you decide to proceed with.
The process of extending your lease can be daunting and often it can be difficult to know how or where to start. In short there are two ways you can extend your residential lease; the informal or the formal (or statutory) lease extension. In this post we will shed some light on each route to help you identify which process is better suited to your needs.
The Informal Lease Extension Route
This process is dependent on you as the leaseholder (tenant under a lease) agreeing terms of the premium (price payable to the landlord for the extension) and length of the lease directly with the freeholder (or landlord).
Key information:
- As the process is informal it is not governed by legal statute, which means as the leaseholder you have less legal protection until each parties solicitors give a legal undertaking of the terms agreed
- The freeholder is in the driving seat and can make changes to the terms (small print) of the agreement or simply change their mind at any point in the process until a legal undertaking is given by the solicitors
- In addition there is no legal recourse if a freeholder does not abide by the terms you initially agree under an informal agreement or the opportunity to seek one via the property tribunal in the event of a dispute
- If your property is mortgaged you are legally obliged to obtain the legal approval of your mortgage lender
- Leaseholders who do not own 100% of the leasehold, or are confident of the Freeholder’s intentions
The process of extending a lease on a property can appear to be long and complicated – and simply due to its name and perceived benefits an informal lease extension can appear a more attractive route , however often the very reasons an informal lease extension can appear more attractive – no need for your own valuation and lower fees as you don’t need to serve a legal notice are actually the very reasons a statutory lease extension can be the better, safer option as the valuation and legal notice exist to protect your interests as the lease holder.
The Statutory Lease Extension Route
The process (also referred to as a formal lease extension) is set out within the Leasehold Reform, Housing and Urban Development Act 1993 and involves the leaseholder serving a statutory notice (under Section 42) on the freeholder to extend their lease by 90 years.
Key information:
- The legal statute exists to protect your interests as a leaseholder
- By undertaking a valuation of your property for the purpose of your lease extension you are protecting your interests and investment in the property – the freeholder cannot simply ‘name their price’
- You are legally entitled to an additional 90 years added to you existing unexpired term (from the date the S.42 statutory notice is served) with no future ground
- You are legally protected at each stage of the process
- Each stage of the process has an allotted time limit, to avoid unnecessary delays on the part of the landlord
- Once the S.42 notice is served the term remaining on the lease is frozen meaning the premium will no longer increase as the term decreases.
- You are not required to seek the approval from a mortgage company as the process is part of law
- To be eligible for the statutory route, you need to own your property
Statutory vs Informal Lease Extension: At a Glance
| Feature | Statutory Lease Extension | Informal Lease Extension |
|---|---|---|
| Legal basis | Your legal right under the Leasehold Reform, Housing and Urban Development Act 1993 | A private agreement with your freeholder, not set by law |
| Can the freeholder refuse? | Not if you qualify, apart from limited exceptions | Yes, and they can withdraw at any time (and you can still be liable for their costs) until the terms of acquisition are legally agreed by each party’s solicitors |
| Years added | An additional 90 years on top of your remaining term | Whatever is agreed, which can be less than 90 years |
| Ground rent | Reduced to a peppercorn (zero) | Can continue to be charged up to the original expiry date, including any increases your lease already allows |
| Premium | Calculated under the rules in the 1993 Act, valued at the date your Section 42 notice is served. If 80 years or fewer remain at that date, marriage value forms part of the premium | Negotiated, and can be higher than the statutory calculation |
| Costs | You pay the valuation and legal costs of both you and your freeholder, plus the premium | Determined and agreed directly with your freeholder |
| Other lease terms | Set by the statutory process | Your freeholder can propose changes to other clauses in your lease |
| If you cannot agree | Either side can apply to the First-tier Tribunal (Property Chamber) in England | No tribunal route, though you can switch to the statutory route if you qualify |
| Timescales | Fixed legal deadlines for each stage | No set deadlines. It can be quicker, but also significantly slower or even fail to ever complete |
The statutory route is often recommended by us as the best option if you own your property due to the many benefits and legal protection it gives you as the leaseholder.
Our team of specialist lease extension experts and solicitors will help you identify the best route for you and your circumstances and manage the entire lease extension process from instruction to the final registration of the title with the HM Land Registry.
Working closely with you we will put together an individual Project Plan, detailing each stage, of the process, giving you a comprehensive understanding of what happens when and what it will cost. We will also ensure that there are no hidden costs or ‘meter running’ professional service charges, giving you the ability to plan effectively around our simplified fixed fees.
To find out more about your options for lease extensions and our other services please get in touch with us for a free, initial chat and lease extension consultation with one of our team who are ready to help you discuss the best option for you.
FAQs
What is the difference between a statutory and an informal lease extension?
A statutory lease extension uses your legal right under the Leasehold Reform, Housing and Urban Development Act 1993. If you qualify, you are entitled to an additional 90 years and a peppercorn ground rent, with the premium calculated under the rules in the Act. An informal lease extension is a private agreement with your freeholder, where the price, the lease length and the other terms are all negotiated.
Can my freeholder refuse to extend my lease?
Under the statutory route, your freeholder cannot refuse if you qualify, apart from limited exceptions. Under the informal route, your freeholder does not have to agree to an extension and can withdraw from negotiations at any time.
How long do I need to have owned my flat before I can extend the lease?
There is no longer a minimum ownership period. The Leasehold and Freehold Reform Act 2024 removed the two-year ownership rule from 31 January 2025, so you can begin the statutory process once you are the registered owner. Your lease must generally have been originally granted for more than 21 years. Every lease is different, so we check yours individually before anything is served.
How many years will be added to my lease?
The statutory route adds 90 years to the term remaining on your lease and reduces the ground rent to a peppercorn. With an informal extension, the number of years is whatever you agree with your freeholder, and it can be less than 90 years.
Do I have to pay my freeholder's costs?
Under the statutory route, you are responsible for the valuation and legal costs of both you and your freeholder, plus the premium for the additional years on your lease. Under the informal route, costs are determined and agreed directly with your freeholder.
What happens if my freeholder and I cannot agree the terms?
Once your freeholder has served their counter-notice, there is a period of negotiation. If terms still cannot be agreed, either side can apply to the First-tier Tribunal (Property Chamber) after the first two months and within six months of the counter-notice. If your freeholder fails to serve a counter-notice by the date in your Section 42 notice, you can apply to the county court instead. Our specialist solicitors and surveyors handle these negotiations for you.
Can I start informally and switch to the statutory route later?
Yes. If you qualify, you can move to the statutory route at any time, for example if you cannot agree terms or your freeholder stops responding.
When might an informal lease extension suit you?
An informal extension can be quicker and may involve lower legal costs, which can suit a straightforward case where you and your freeholder agree terms easily. It does not carry the legal protection, deadlines or tribunal route of the statutory process, so it is important to have the proposed terms reviewed by a specialist before you agree to anything.
Ready To Get Started?
Stress-Free
Find out how to extend your lease easily in one place
Save Money with our Fixed Fee Service
No nasty hidden costs
Nationwide
Specialist enfranchisement Surveyors and Solicitors to help you work out when to extend your lease
Peace of Mind
Exceptional customer service
For a FREE, no-obligation quotation and information on how to extend your lease:
Verified Results & Real Reviews
Our clients choose us because they want the peace of mind that comes with hiring the market leaders. We encourage you to read our reviews to see how our technical authority has helped leaseholders across the country secure their extensions quickly, quietly, and correctly.
Buying or Selling Your Property?
A property with a low lease shouldn’t put you off buying it or selling it. Give one of our expert team a call today to explain how you can still begin the process and protect and maximise the property’s value.
Call Us Free For A No Obligation Quotation
Strength In Numbers
Find out how to extend your lease in a group or with neighbours with the same freeholder to give you the best chance of negotiating the lowest possible premium and reducing the costs by up to 50%.
Our experts in lease extension work together with the other leaseholders in the block, securing a group application and coordinating and managing this group at no extra cost.
For a FREE, no-obligation lease extension consultation
Find Out More
Learn About What We Do
Read More About Our Costs
Discover How We Help
Lease Extension Calculator
Get A Quote
Hello.
We are looking forward to hearing from you and helping you save time, money, and stress with your lease extension. It’s easy to get in touch with us.
Simply fill in your details using the form to receive your free quote and our guide to the lease extension process. If you would like a call back choose yes on the drop down menu.
You can also call to speak to a member of the client service team:
Or email us: