Yes, the freeholder is entitled to request a 10% deposit or £250 (whichever is greater) at any time after service of the section 42 notice. The deposit must be paid within 14 days of the freeholder requesting it.
The 10% is calculated based on the price you are proposing to pay in the notice. The premium you propose must be a genuine opening offer. You should not quote a low figure to reduce the deposit, as the notice may not be valid if you do this.
If there are any disputes or if the process is not completed for any reason, the deposit may be forfeited or used to cover the freeholder’s costs.
More information you might find useful:
- How can I extend my lease?
- Should I wait to extend my lease? I have heard that planned changes to the law could make lease extension cheaper.
- I need to send the notice for a lease extension, but the freeholder has more than one address. How can I work out which address to send it to?
- Lease Extension Calculator
- More Frequently Asked Questions on Lease Extension
Still not found the answer?
Contact LEASE to have your enquiry dealt with by one of our experienced advisers
