Lease extension: the informal route

Some leaseholders prefer to start informally because it can be a faster process and may involve lower legal costs. But it offers less protection than the formal route under the Leasehold Reform, Housing and Urban Development Act 1993.

Your landlord does not have to agree to extend your lease, and they can propose less favourable terms.

1. ask your landlord if they are willing to discuss a lease extension. You can use our template letter to do this
2. if they agree, negotiate the price (premium) and the new lease terms
3. if they refuse, do not reply, or you cannot agree terms, you can still move to the formal route if you qualify under the Act

Make sure you understand:

• the length of the new lease offered
• how much you will pay for the extension
• what the ground rent will be and if it can increase

Because the informal route is not set by law, your landlord can:

• refuse to extend your lease
• charge a higher premium than the statutory calculation would allow
• offer less than 90 years
• continue to charge ground rent up to your lease’s original expiry date, including any increases that were already allowed under the terms of the lease (but they cannot add new increases)
• change other clauses in the lease

Through the informal process, the legal and valuation costs of the lease extension are negotiated. You will not have the same legal protection, time limits or appeal rights that apply under the formal process.

Unlike the formal process, the informal process does not remove the ground rent, except for the extended period after the lease’s original expiry date.

A landlord can walk away from the negotiations at any time, and you’ll still have to pay their costs, such as valuation fees.

If you qualify you can switch to the formal route at any time. For example, if you cannot agree a fair price or terms, or your landlord stops responding.

The formal route gives you the right to a 90-year extension and any ground rent reduces to zero.

Professional advice can help you avoid unfair terms and long-term costs.

Before agreeing to an informal lease extension, we recommend that you:

• get a professional valuation from a qualified valuer or surveyor. Find a valuation surveyor at the Royal Institute of Chartered Surveyors' website.
• find a solicitor experienced in leasehold law to check the proposed terms. Find a solicitor at the Law Society's website.
• compare the landlord’s offer to what you would get under the formal route