Lease extension—the new lease
Lease extension—the new lease

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Lease extension—the new lease
  • Settling the terms of acquisition
  • Specific terms of acquisition
  • Settling the form of the lease
  • Deemed withdrawal
  • Costs

Where a landlord admits, or fails properly to dispute, the right of a qualifying tenant to acquire a new lease, the landlord is bound to grant, and the tenant is bound to accept, a new lease in substitution for the existing lease.

The process of creating the new lease involves two stages:

  1. settling the ‘terms of acquisition’

  2. drafting the form of the new lease so as to give effect to the terms of acquisition

Settling the terms of acquisition

The expression ‘terms of acquisition’ means any of the terms relating to the grant of the new lease to the tenant, ie:

  1. any of the provisions of the lease

  2. the amount of the premium payable by the tenant to the ‘competent landlord’ (ie the landlord who will be granting the new lease) and any intermediate landlord.

Once the tenant has served a valid s 42 notice, the terms of acquisition can be settled in any one of the following ways:

  1. the tenant can apply to the county court for an order that the proposals set out in the tenant’s notice of claim are to be the terms of acquisition if the landlord:

    1. fails to serve a counter-notice, or

    2. serves a counter-notice which does not admit or deny the tenant’s claim, or

    3. serves a counter-notice which fails to state which of the