3.1 Commencing a Lease Extension Claim with a Section 42 Notice

Edited by Ashley Connell

Leasehold Enfranchisement Solicitor at Hetts

The statutory lease extension process under the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993), as amended, remains a fundamental mechanism for leasehold enfranchisement in England and Wales. Serving a Section 42 Notice initiates the legal right for qualifying leaseholders to extend their lease by an additional 90 years at a peppercorn ground rent. However, with the Leasehold and Freehold Reform Act 2024 (LFRA 2024) partially in force as of August 2025, professionals must note key changes, such as the abolition of the two-year ownership requirement since 31 January 2025 and enhancements to right to manage provisions from 3 March 2025, while awaiting implementation of broader reforms like 990-year extensions, the removal of marriage value, and standardised valuation rates. This article delves into the Section 42 Notice process, emphasising the nuances of address for service, deemed delivery, and practical strategies, drawing on legislative detail and pivotal case law. Aimed at property lawyers, surveyors, and advisors, it offers actionable insights to ensure compliance and mitigate risks, setting the stage for future articles on premium negotiations and tribunal proceedings.

Understanding the Section 42 Notice: Legal Foundations

Section 42 of the LRHUDA 1993 empowers a qualifying tenant of a flat to claim a new lease extending the term by 90 years beyond the existing one, with ground rent reduced to a peppercorn. The notice, served on the landlord and any relevant third parties under Section 42(2), activates a rigorous statutory timeline. Its validity is essential, as defects can lead to invalidation and a 12-month moratorium on re-serving (Section 42(7)).

Key Legislative Requirements (Section 42, LRHUDA 1993)

The tenant’s notice must comply with Section 42(3), including:

• Tenant’s Identity and Property Details: The tenant's full name and the flat's address, with sufficient particulars for identification (Section 42(3)(a) and (b)(i)).
• Lease Particulars: Details such as the lease's date, term, and commencement (Section 42(3)(b)(ii)).
• Proposed Terms: The premium proposed by the tenant, plus other Schedule 13 amounts like the landlord’s reasonable costs (Section 42(3)(c)). Case law underscores realism here; in Cadogan Estates Ltd v Morris [1998] EWCA Civ 1671, an unrealistically low £100 premium invalidated the notice, as it failed the "elephant test" of recognisability as a genuine proposal.
• Proposed Lease Terms: Typically a 90-year extension at peppercorn rent (Section 42(3)(d)).
• Appointed Representative: Name and England/Wales address of any agent, e.g., a solicitor (Section 42(3)(e)).
• Response Deadline: A date for the landlord’s Section 45 Counter-Notice, at least two months from the notice date (Section 42(3)(f) and (5)). Errors in this can be fatal; Keepers and Governors of the Possessions Revenues and Goods of the Free Grammar School of John Lyon v Secchi [1999] EWCA Civ 1743 held that specifying too early a date invalidated the notice, rejecting the "reasonable recipient" test from Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749.

Under Section 42(6)–(7), no further notice can be served while one is active, and withdrawal triggers the moratorium.

The Importance of the Address for Service

Identifying the correct address for serving the Section 42 Notice on the competent landlord (typically the freeholder or intermediary with sufficient term to grant the extension) is crucial. Errors can invalidate the notice, invoking the 12-month delay (Section 42(7)). The competent landlord must have at least 90 years remaining on their interest beyond the tenant’s term.

Determining the Correct Address for Service

The address for formal notices may differ from routine correspondence or ground rent demands. Prioritise:

1. Ground Rent and Service Charge Demands: These must include an England/Wales address for notices under Sections 47–48 of the Landlord and Tenant Act 1987 (LTA 1987). Absence suspends rent payments until provided. Use this address if specified, as it is statutorily designated.
2. Companies House Records: For corporate landlords, the registered office per Companies Act 2006 (Section 1139) is valid for service. Verify via Companies House, as changes occur. In St Ermin's Property Co Ltd v Tingay [2002] EWHC 1673 (Ch), affirmed [2002] EWCA Civ 1103, service at the landlord’s specified address was upheld over an agent's, emphasising statutory compliance.
3. Land Registry Search: HM Land Registry titles reveal the proprietor’s address. Practice Guide 27 advises index map searches to confirm title and address, essential for absent landlords.
4. Company Websites: Websites may list service addresses, but cross-reference with official sources, as they lack legal primacy.
5. Lease Documentation: Original leases may nominate an address, but update with current data if outdated.

Serving on Interested Parties

In addition to the competent landlord, Section 42(2) requires the notice to be given to any person who has an interest superior to the tenant's, such as an intermediate leaseholder, or to a management company if it is a party to the lease. Failure to serve these parties can invalidate the claim. For intermediate leaseholders, the notice must be served directly if they hold a sufficient interest that could affect the grant of the new lease. Management companies should only be served if explicitly named as a party in the lease or if they hold a reversionary interest. Practitioners should review the lease and Land Registry entries to identify all relevant parties, ensuring copies are served to avoid procedural challenges.

Legal Considerations and Case Law

Service must adhere to Section 99 of the LRHUDA 1993, allowing postal service, but precision is key. In Freetown Ltd v Assethold Ltd [2012] EWCA Civ 1657, the Court of Appeal clarified that under LTA 1987 Section 48, service at the last known address is valid even if undelivered, provided properly posted. However, for LRHUDA notices, non-receipt can be challenged.

In Town Improvements Ltd v Department for Communities and Local Government [2007] EWHC 1045 (Admin), the High Court considered the validity of a notice served at an address provided under Section 48 of the LTA 1987, ruling that it was the correct address despite the landlord's arguments to the contrary, reinforcing the statutory designation.

If the landlord is untraceable, Section 50 of the LRHUDA 1993 permits a County Court Vesting Order after reasonable enquiries, including Land Registry and advertisement attempts.

Practical Tips for Serving the Notice

• Serve at Multiple Addresses: Duplicate service at demand-listed and registered office addresses to cover bases.
• Use Recorded and Non-Recorded Delivery: Employ recorded delivery for receipt proof, alongside first-class post with a Post Office certificate of posting. This counters refusal risks and bolsters evidence.
• Engage a Process Server: For complex cases, use professionals for hand-delivery and affidavits.
• Register the Notice: Note the claim at Land Registry per Practice Guide 27 to protect against third parties.

Validity of the Notice in Case of Minor Errors

While strict compliance with the requirements of Section 42 is generally required, the legislation provides a safeguard against certain inaccuracies. Under Section 42(4A) of the LRHUDA 1993, a notice is not invalidated by any inaccuracy in the particulars required by subsection (3)(a), (b)(i) or (ii), or (c) namely, the tenant's identity and property details, lease particulars, or proposed terms (including the premium). This provision recognises that minor errors or inaccuracies in these areas should not derail a claim, provided the notice remains substantially compliant and the intent is clear.

However, this protection does not extend to all errors; for example, fundamental omissions, unrealistic proposals (as in Cadogan Estates Ltd v Morris), or errors in the response deadline (as in Keepers v Secchi) may still invalidate the notice. The "reasonable recipient" test from Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd has limited application to statutory notices like Section 42, where courts often demand precise adherence to the Act.

A key case illustrating the application of similar saving provisions is Osman v Natt [2014] EWCA Civ 1520, concerning a Section 13 notice for collective enfranchisement. The Court of Appeal held that the omission of particulars of one qualifying lease was an "inaccuracy" saved by the equivalent statutory provision (Section 13(4)), rather than a fundamental defect, as the notice still conveyed the essential claim. By analogy, this supports a pragmatic approach to minor inaccuracies in Section 42 notices, ensuring they do not always lead to invalidation if the core requirements are met.

Deemed Date of Delivery and Receipt

The "date of giving" the notice governs timelines, including the two-month minimum for the landlord’s response (Section 42(5)). Deemed receipt assumes delivery unless proven otherwise.

Statutory Framework and Case Law

Section 99 of the LRHUDA 1993 permits postal service, invoking Section 7 of the Interpretation Act 1978: properly addressed, prepaid, posted notices are deemed delivered in the ordinary postal course unless contrary proved. For first-class post, this is the second working day post-posting; recorded delivery aligns with signature or first working day if unsigned.

In Calladine-Smith v Saveorder Ltd [2011] EWHC 2501 (Ch), the High Court, applying Section 7, held that if the recipient proves non-receipt on the balance of probabilities (considering evidence like witness credibility), the notice is not deemed served. This shifted from presumptive service, warning senders against sole reliance on posting. The case arose from a tenant's Section 42 Notice allegedly not received, leading to a detailed examination of postal evidence and landlord credibility.

Freetown v Assethold (supra) contrasts by upholding service at last known addresses under LTA 1987, even sans receipt, but LRHUDA cases emphasise proof burdens.

Practical Considerations

• Specify a Conservative Response Date: Allow extra days for delays, e.g., post on 1 September, deem delivery 3 September, set response 4 November.
• Retain Proof: Certificates and receipts establish presumptions; landlords denying receipt bear the proof burden.
• Monitor and Enforce: Non-response enables court application within six months (Section 49(3)), but verify service first. If the landlord fails to respond, as in scenarios outlined in Landlord Fails to Respond to a Section 42 Notice guidance, the tenant may seek a County Court order to enforce terms.

Timelines and Deadlines

Post-service timelines include:

1. Section 42 Notice Service: Initiates process.
2. Section 45 Counter-Notice: Due at least two months later; non-response risks court enforcement.
3. Deposit: Landlord may demand 10% of proposed premium or £250 within 14 days (Section 44).
4. Valuation Access: Reasonable notice, often 10 days.
5. Tribunal Application: Disputes to First-tier Tribunal between two and six months post-Counter-Notice (Section 48(2)).
6. Court Enforcement: Within four months of agreement/determination (Section 48(5)).

Breaches lapse the notice (Section 42(7)). Note that LFRA 2024 changes, such as those affecting right to manage from 3 March 2025, may indirectly influence timelines in mixed claims.

Common Pitfalls in Serving the Section 42 Notice

To avoid invalidation and associated costs, professionals should be aware of frequent errors:

• Incorrect or Incomplete Notice Contents: Omissions or inaccuracies in lease particulars, proposed terms, or response dates can render the notice defective. For instance, in Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277, missing details invalidated the claim.
• Failure to Serve All Relevant Parties: Not serving intermediaries or management companies under Section 42(2)(b) leads to invalidation. LexisNexis guidance highlights that neglecting a management company can result in the notice being deemed ineffective.
• Unrealistic Premium Proposals: As per Cadogan v Morris (supra), low-ball offers may be challenged as not genuine, triggering court costs and the 12-month moratorium.
• Service at Incorrect Address: Relying on outdated or non-designated addresses risks non-receipt challenges, as in Calladine-Smith (supra).
• Timing Errors: Serving before full qualification (though mitigated by LFRA 2024's abolition of the two-year rule) or miscalculating response dates, per Secchi (supra).
• Lack of Proof of Service: Without certificates or receipts, rebutting non-receipt claims becomes difficult.
• Ignoring LFRA 2024 Transitions: With partial implementation, failing to advise on impending changes like marriage value abolition (awaiting commencement) can lead to suboptimal timing for clients.

Mitigating these involves thorough pre-service checks, specialist input, and conservative drafting.

Serving a Second Notice Without Prejudice to the First

The Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) generally prohibits the service of a further Section 42 notice whilst an existing one remains in force, as per Section 42(6). However, in circumstances where the validity of the initial notice is in dispute, such as when the landlord challenges it, or the tenant harbours doubts, it is possible to serve a second notice on a "without prejudice" basis to the validity of the first.

This approach allows the tenant to protect their position without conceding the invalidity of the original notice. Specifically, the second notice can be served with wording that expressly states it is "without prejudice to the contention that the first notice is valid." If a court subsequently determines that the first notice is valid, the second notice is treated as a nullity and simply falls away, with no effect on the ongoing process. Conversely, if the first notice is found to be invalid, the second notice can then take effect as the operative claim.

This strategy helps avoid the statutory 12-month moratorium on serving a new notice that would apply if the first were withdrawn or deemed withdrawn under Section 42(7), which could be particularly disadvantageous in a rising property market where premiums might increase or the lease term continues to diminish.

The principle stems from case law in the context of collective enfranchisement but has been applied analogously to individual lease extensions under Section 42. In Sinclair Gardens Investments v Poets Chase Freehold Limited [2007] EWHC 1776 (Ch), Morgan J held that a second notice served without prejudice did not invalidate the process, allowing the tenant to proceed based on the outcome regarding the first notice's validity.

In practice, tenants should seek specialist legal advice before adopting this tactic, as the precise drafting of the second notice is critical to ensure it does not inadvertently undermine the first. If the landlord accepts the first notice as valid, the second can be disregarded without further issue.