How to Serve a Section 42 Lease Extension Notice

Statutory route for extending the lease of a London property by serving a Section 42 Notice on my Landlord

How do I carry out a Section 42 Lease Extension on my property?

Renewing the lease on your London property will ensure that the value does not decrease in the near future, thereby making it easier to sell. It is important to extend the lease on your property before you have 80 years remaining, because at this point a marriage value is payable to the landlord for the loss of ground rent.

The most common way to extend your lease is by serving a Section 42 Notice on your landlord under the Leasehold Reform, Housing and Urban Development Act 1993. Once the process is completed and the new lease has been granted, the leaseholder receives an additional 90 years added to the unexpired term of the existing lease, and the ground rent is reduced to a peppercorn (£0). For instance, a lease with 70 years remaining will be extended to 160 years, providing long-term security and improving the property’s mortgageability. The landlord receives the agreed premium for granting the extension, and once the new lease is registered at HM Land Registry, the leaseholder holds a fully extended, rent-free lease protected by statute.

Looking ahead, the Leasehold and Freehold Reform Act 2024 will introduce significant changes. Once in force, it will abolish marriage value and increase the statutory lease extension term from 90 years to 990 years, potentially making lease extensions cheaper and fairer for leaseholders. It is important to note that under the Government’s proposed reforms, the Leasehold and Freehold Reform Act 2024 also includes a plan to cap rent on existing leases at £250 per year. This proposed change is intended to limit excessive ground rent charges but has not yet come into force. Once implemented, it will apply only to existing leases that still require ground rent payments, not to new or extended leases (which must already be set at a peppercorn ground rent under current law). For more details on the upcoming reforms, please see our blog on the Leasehold and Freehold Reform Act 2024.

What is the Marriage Value of a property?

Marriage value is the difference between the value of the property before and after the lease extension has been completed. This can be calculated by taking into consideration the difference between the accumulative interest of the landlord and leaseholder, before and after the lease extension is granted. Marriage value becomes payable once a lease fell below 80 years.

How can I arrange a lease extension through my landlord?

A lease extension can be arranged with your landlord, who is entitled to a premium for carrying it out. There are two methods for extending the lease through your landlord; the formal method, also known as the statutory route, and the informal method.

Informal Route: Negotiating directly with the Landlord

You can arrange to extend your lease by liaising directly with your landlord or one of their solicitors. If you choose to extend the lease in this manner your solicitor will then only be required to formalise these terms by drawing up a legal document signed by both parties. However, it is possible that the landlord can refuse to extend the lease or arrange it on their terms. Informal extensions can sometimes be quicker or cheaper but may include unfavourable terms, so legal advice is recommended before proceeding.

Formal Route: Section 42 Notice

This method requires your solicitor to serve a statutory Section 42 Notice onto the competent landlord. The competent landlord is the landlord with a sufficiently longer interest in the property as to be able to grant the 90-year extension, as well as the unexpired term of the lease. Additionally, the Notice should also be served on all other third parties to the lease. A third party is any party to the lease, excluding the tenant under the lease and the tenant’s competent landlord; e.g. a management company or a surety. We would advise tenants to take this statutory route and serve a Section 42 Notice, as this can help to prevent delays in obtaining the lease extension.

What information is included in the Section 42 Notice?

The Section 42 Notice contains the following contents relating to the tenant’s lease extension on their leasehold property:

• Name of the tenant.
• Address of the property.
• Particulars of the property, including any additions such as garages etc. (though a full plan of the property is not strictly required).
• The specified premium and the division of the premium between the landlords, if there is more than one.
• Details of any other leases including the property in question.
• The full terms to be contained in the new lease.
• The commencement date of the agreed terms for the lease.
• Date for service of a counter-notice by the landlord, which must be a minimum of 2 months following the issuing of the Section 42 Notice.
• Name and address of the tenant’s legal representative.

What is required to make a valid Section 42 claim?

Under the Leasehold Reform, Housing and Urban Development Act 1993, a leaseholder may serve a Section 42 Notice to claim a statutory lease extension provided they are a qualifying tenant. This means the tenant must hold a long lease (original term of more than 21 years). The lease must be registered at HM Land Registry if registration is compulsory. The tenant serving the notice must be the registered proprietor of the leasehold title. The Section 42 Notice must be signed by the tenant or by someone authorised to sign on their behalf, such as the tenant’s solicitor or, where the tenant is a company, a director or authorised signatory. It is strongly recommended that the premium proposed in the notice is supported by a valuation prepared by a regulated chartered surveyor experienced in leasehold enfranchisement. A professional valuation helps ensure the offer is realistic, complies with statutory valuation principles, and reduces the risk of delay, dispute, or referral to the First-tier Tribunal later in the process.

What are the Procedures and Statutory Time limits for a Section 42 Notice?

• Leaseholder serves S41 Information Notice (discretionary).
• Landlord must respond within 28 days.
• Leaseholder serves S42 Tenant’s Notice.
• The “valuation date” will be fixed as the date of service of the S42 Tenant’s Notice.
• Landlord may request additional information, but he must do so within 21 days of receipt of the Tenant’s Notice.
• Leaseholders must respond to this request within 21 days.
• Landlord must serve a Counter-Notice by the date specified in the notice. This date must be at least two months from the date of service of the Tenant’s Notice.
• Where the landlord fails to serve the Counter-Notice leaseholders must apply to court within six months for a Vesting Order.
• After service of the Counter-Notice either party may apply to the Tribunal. This must be done no sooner than two months from, but within six months of, the date of service of the Counter-notice.
• The Tribunal determination becomes final after 28 days. Appeals must be made within this period to the Lands Tribunal, but only with the leave of the Tribunal.
• After the Tribunal decision is final the landlord must provide draft lease within 14 days.
• There is then a period of two months after decision becomes final for both parties to enter into the new lease.
• If the period above elapses without entry into new lease, then leaseholder must apply to court within a further two months requiring the Landlord to meet his obligations

Although these procedural steps remain the same, future regulations under the 2024 Act may simplify or shorten some of the statutory time limits to make the process faster.

What Does a Section 42 Lease Extension Cost?

Legal fees for serving and completing a Section 42 Notice typically start from £1,900 plus VAT and disbursements, though this will vary based on the property’s value and lease length. For informal extensions, the fees are often around £1,250 plus disbursements. However, informal agreements can involve hidden risks, such restricted terms, so legal advice is essential before proceeding.

Do You Pay Stamp Duty on a Lease Extension?

In most cases, you won’t need to pay Stamp Duty Land Tax (SDLT) on a lease extension, especially if you’re not paying a premium for a share of freehold. SDLT generally applies only when the premium is £40,000 or more and the property isn’t your main residence. For buy-to-let or investment properties, SDLT is usually charged at 3% of the premium.

If the lease extension premium is below £40,000, no SDLT is due—but if it’s over £40,000, you must still submit an SDLT return, even if no tax is payable. Always check with your conveyancer, as SDLT thresholds and rules can change.

Limited companies and SPVs may face additional stamp duty liability. Even without paying a premium, SDLT could still be based on the market value of the lease extension. Our specialist conveyancing solicitors can help you understand your SDLT position and manage your lease extension smoothly.

How Starck Uberoi can help

Do you require assistance with serving a Section 42 for a lease extension on your property? Our experienced Conveyancing lawyers will deal with your matter quickly and efficiently.

If you would like an cost estimate for your lease extension, try our lease extension calculator. For more information please visit our services please visit lease extension solicitors. 

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