Flat Extend Lease

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Ashley Connell

Edited by Ashley Connell

Leasehold Enfranchisement Solicitor at Hetts


Landlord's Failure to Respond to a Section 42 Notice

Failure to Provide a Counter Notice

When a tenant has served a valid Section 42 notice (a notice of intention to apply for a lease extension) on a landlord, the landlord must serve a counter notice on the tenant within the time period specified, being a minimum of two months from the date of the notice. But what happens when no response is provided by the landlord?

If a landlord fails to respond to a Section 42 notice, the tenant must apply to the County Court for an Order. If successful, this order effectively takes the matter out of the landlord's control, and the court will likely grant the new lease to the leaseholder due to the landlord’s default, with terms set as outlined in the tenant’s original Section 42 notice.

What the Law Says

The relevant law is set out in Section 49 of the Leasehold Reform, Housing and Urban Development Act 1993, which covers applications where a landlord fails to give a counter notice and can be simplified as follows:

Subsection 1 of the Act:

Where the tenant’s notice has been given in accordance with section 42 but:

(a) the landlord has failed to give the tenant a counter-notice... the court may, on the application of the tenant, make an order determining, in accordance with the proposals contained in the tenant’s notice, the terms of acquisition.

The above means that where a landlord has failed to provide a counter notice, under Section 45 of the same Act, the tenant can apply to the court for an order. Most likely, the court will grant a new lease on the same terms set out in the tenant’s original notice.

Subsection 2 of the Act:

(2) The court shall not make such an order... unless it is satisfied that the tenant had the right to acquire a new lease.

This means that the tenant must have the right to acquire a lease extension or new lease. Therefore:

  • The tenant must have owned the leasehold property for 2 years or more, and
  • The Section 42 notice served by the tenant must be valid.

Deadline for a Court Order Application

Subsection 3 of the Act:

(3) Any application for an order must be made not later than the end of the period of six months beginning with the date by which the counter-notice or further counter-notice referred to in that subsection was required to be given.

Therefore, a leaseholder must apply to the court within a period of six months starting from the point the landlord should have served a counter notice.

Court Orders Benefit the Tenant

Under case law, it was held by the Court of Appeal in Willingale v. Globalgrange [2000] 2 EGLR 55 that the words "the court may make an order" actually mean "the court must make an order". Therefore, the court has very little discretion in granting the order for a lease extension. If the landlord fails to respond to a Section 42 notice, it's very likely the court will grant a new lease on the same terms set out by the tenant in the original notice. Effectively, the tenant gets a new lease on their terms, at their price. A leaseholder can expect to obtain a lease extension at a far more favourable price if a court order is granted.

Proving Delivery of a Notice

Clearly, a tenant will need to prove delivery of the Section 42 notice, as this will likely be denied by the landlord. It is strongly recommended that a solicitor is appointed to serve the notice to ensure its validity. So what constitutes proof of delivery?

The Act itself is very vague on this topic. Under Section 99: "Any Notice required or authorised to be given under this Part (a) shall be in writing, and (b) may be sent by post."

To help clarify the Act, Section 7 of the Interpretation Act 1978 is applied by the courts:

Where an Act authorises or requires any document to be served by post (whether the expression "serve" or the expression "give" or "send" or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying, and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

In the case of Calladine-Smith v Saveorder Ltd, it was held that if the sender of the notice could show that the notice had been properly addressed and posted, then it would be deemed served in the ordinary course of post. However, this presumption could be rebutted. In this case, on the balance of probabilities, it was held that the counter-notice had not been received.

Therefore, although not strictly necessary, it is important for any notice to be sent via a service providing proof of delivery.

Landlord fails to serve section 45 notice

The Court Application Process

The following should be handled by a solicitor:

  • Check that the Section 42 notice was served correctly.
  • Confirm that you are eligible for a lease extension (owned the lease for at least two years).
  • Consider a valuation to determine if the offered premium is provided in good faith, as a bad faith claim could potentially deem the s.42 notice invalid.
  • Although you are not legally obliged to do so, it is morally preferable to write to the freeholder giving them a further 7 to 10 days to confirm they will proceed at the offer contained in the section 42 notice.
  • Submit an application to the county court, including the court fee.
  • It's likely that the freeholder will now agree to extend the lease to avoid court costs. If they don't, you can request the court issues directions ordering the freeholder to do so.
  • If the court grants the order, the terms are set, and the landlord must sign the new lease; failing which, the court will sign instead, or alternatively give authority for the leaseholder's solicitor to sign on their behalf, in their absence.

Likely Legal Fees

  • £800 + VAT solicitor fees (if undefended)
  • £360 court fee (varies)
  • The general rule with this type of court application is that the freeholder pays the leaseholders costs relating to the court application. Therefore if the freeholder does not serve a section 45 notice within the specified timescale, the leaseholder benefits signifcantly, at the loss of the freeholder.