Q&As

Are tenant's improvements to be disregarded under the Leasehold Reform Housing and Urban Development Act 1993 when applying for a lease extension? Would carrying out works to create a new flat before original lease was granted count as a tenant improvement?

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Published on LexisPSL on 30/11/2018

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • Are tenant's improvements to be disregarded under the Leasehold Reform Housing and Urban Development Act 1993 when applying for a lease extension? Would carrying out works to create a new flat before original lease was granted count as a tenant improvement?
  • The price payable to the competent landlord

Are tenant's improvements to be disregarded under the Leasehold Reform Housing and Urban Development Act 1993 when applying for a lease extension? Would carrying out works to create a new flat before original lease was granted count as a tenant improvement?

The price payable to the competent landlord

The amount payable to the competent landlord on the grant of the new lease is the aggregate of:

  1. the diminution in value of the competent landlord's interest in the tenant's flat

  2. the landlord's share of the marriage value, and

  3. the amount of any compensation for loss arising from the grant of the new lease payable to the landlord

The diminution in value of the landlord's interest is the difference between the value of the landlord's interest in the flat:

  1. prior to the grant of the new lease, and

  2. once the new lease is granted

on the basis of an open market sale by a willing seller where neither the tenant nor any intermediate landlord is buying or seeking to buy.

One of the assumptions in the valuation exercise is that tenants' improvements are disregarded (this does not include works which were part of the initial

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