Much obliged - a guide to residential leasehold covenants
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If you have a long residential lease (more than 21 years when granted) and the lease comes to an end by formal notice of the landlord, you may be entitled to remain in the premises on an “assured tenancy”, or the landlord may be able to obtain possession if he can show one of the specified grounds.
To qualify for the above you must be in occupation of the premises as your only or principal home at the end of the lease. The lease must also have a “low rent”; this refers to the ground rent payable.
For pre-1990 leases the ground rent must be less than two-thirds of the rateable value of the property as set on 31/3/1990. In post-1990 leases the ground rent must be below £1000 per year in Greater London and below £250 elsewhere.
“High value” properties, as defined, are excluded from the right. Also excluded are: – leases which have been extended under the Leasehold Reform Housing & Urban Development Act 1993; leases where the landlord is a local authority or Housing Association or charitable housing trust and business leases including residential parts.
The lease will not terminate, even if the term has expired, unless the landlord terminates it by giving notice in the prescribed form. The landlord must serve the relevant form stating whether:-
- He is prepared to grant an assured tenancy and if so, the terms including the rent, which will be a monthly rent. (An assured tenancy gives security of tenure unless the landlord can later show a ground for possession under the Housing Act 1988)
- He wishes to seek possession of the property in which he must state the grounds for possession. (The grounds are set out by statute and include such grounds as breach of an obligation under the lease , arrears of rent and suitable alternative accommodation)
The tenant can serve notice if he does not agree with the terms proposed by the landlord or wishes to remain in the premises where the landlord is seeking possession. If the terms of the assured tenancy cannot be agreed the landlord can request that they be determined by a Rent Assessment Committee. If the tenant opposes the application for possession, this will be heard by the County Court. The landlord will need a court order for possession whether the tenant serves notice stating his wish to remain or not.