Selling and buying a flat with a short lease

The Leasehold Reform, Housing and Urban Development Act 1993 enables eligible leaseholders to acquire a 90-year extension to their existing lease, subject to a peppercorn ground rent. The other main terms of the lease, such as service charge and obligations to repair, are to remain substantially the same, although limited changes are allowed in order to update the document or correct any defects which may exist in a poorly drafted lease. The key qualification criteria for a lease extension are that the original lease must have been granted for a term in excess of 21 years and that the flat must have been owned at the Land Registry by the qualifying lessee for at least two years.

If a flat is being sold which requires a lease extension, the seller can serve the required notice on behalf of the buyer so that the buyer does not have to wait two years to qualify.  This is important to note because as the owner of the existing lease, the seller may wish to sell its interest prior to the lease extension completing. The purchaser’s solicitor needs to ensure that any transfer of a claim for an extended lease of the flat must take place at the same time as the assignment of the lease to which the claim relates. This is because the enfranchisement claim cannot be owned independently from the lease. This may sound simple, but in practice many buyers have failed to satisfy this test when trying to take an assignment of rights.

If assigning the benefit of a tenant’s lease extension claim, the Deed of Assignment should be expressed to take effect on the registration of the purchaser as proprietor of the existing lease at the Land Registry. This ensures that the assignments of the legal and beneficial interests in both the claim and the lease take effect simultaneously. It is important that instructed solicitors are familiar with this procedure.


Iris-Ann Stapleton is a solicitor at Streathers Solicitors LLP


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