A new lease of life: - CentreForum

A New Lease of Life::The cost of lease extension;::The eligibility for and cost of enfranchisement;::An RTM claim rejected by a freeholder;::Whether a lessee must pay a service charge.The LVT is designed to be more accessible than a full countycourt. There are however still significant barriers and although nota full court, the tribunal remains a potentially intimidating legalprocess. It can also be expensive; an application to a tribunal cancost up to £500, leaseholders must pay their own fees, and oftenthe freeholder’s ‘reasonable’ legal fees if stated in their lease. TheLeasehold Advisory Service is mandated to all stakeholders, socannot offer leaseholders advice on how to build an LVT case.Despite this, the LVT process is popular and has becomeoversubscribed with waiting lists often of 6 to 12 months. The factthat it is oversubscribed despite the barriers suggests that eitherthe tribunal system is inefficient or that there is a large amount ofconflict within the leasehold system. The LVT will be consumedinto the new Property Chamber in 2013, although its functions forleaseholders will remain largely the same. 23Right to extend leaseholdThe right to extend a lease removes much of the risk that lesseeswill lose their full interest in their property and that it will revertto the freeholder. The leaseholder has the right to extend at anytime, although the cost rises as the lease declines. A qualifyingleaseholder must serve a Section 42 Notice to their landlord to gaina leasehold extension, including a reasonable offer to purchase theextension. 24 If the landlord rejects this offer, the lessee can thentake the case to an LVT. 25 Extensions of 90 years are standard andapply on top of existing leases; a lease with 80 years remaining can23 The Ministry of Justice, ‘Tribunal Procedure Committee Consultation on theproposed Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules2013’.24 A qualifying leaseholder must have a lease which was originally signed for 21years or more and, unlike collective enfranchisement, must have owned theproperty for two years. Requirements have been relaxed so that a lease can beextended within two years of the death of the leaseholder. For Section 42 Noticesee: www.legislation.gov.uk/ukpga/1993/28/section/42.25 A lessee applying to an LVT for an extension must pay £350 costs for theadjudication, in addition to covering theirs and the freeholders reasonableexpenses.19