If you are a flat owner, you ought to be aware that your lease only gives you the right to occupy your flat for the term of your lease. As that term decreases, your flat diminishes in value, and a “short lease” can affect the mortgageability and saleability of the flat.
One solution to the “short lease” problem, provided you meet the criteria, is to claim a new lease under the Leasehold Reform, Housing and Urban Development Act 1993 (‘the Act’). Put very simply, this process entails the tenant serving a notice on the landlord claiming a new lease and stating, amongst other things, the amount of the premium they propose to pay for it (this should be based upon valuation advice). The landlord then serves a counter-notice stating whether or not it accepts the claim and, if so, how much they propose the premium should be.
The Act requires that notices given in accordance with its provisions must be in writing and signed by or on behalf of the tenant or landlord. It is commonly accepted that notices should be given by post (preferably registered) or hand delivered to ensure valid service, as case law concerning service by email and other electronic means is unclear. However, during the current lockdown as a consequence of the Covid-19 pandemic, most office premises are closed, which means that personal service or obtaining proof of service may not be possible.
For those yet to commence their claims, waiting until everyday life returns to normal may not be the sensible option. If the unexpired term (i.e. number of years left) of their lease is about to drop below 80 years, they may well wish to serve their notice claiming a new lease without delay (this is because, once the unexpired term drops below 80 years, the premium will become more expensive due to what is called “marriage value”).
On 30 March 2020, the Association of Leasehold Enfranchisement Practitioners (ALEP) published the ALEP Protocol for Service of Initial Notices and Counter-Notices During COVID-19 Pandemic. Whilst entirely voluntary, the protocol encourages ALEP members to agree to accept service of PDF copy notices via email wherever possible. It also encourages agreement of reasonable extensions of time for service of landlord’s counter-notices. The protocol may only be temporary, and is set to expire at the same time as section 55 of the Coronavirus Act 2020 but it has, for now at least, alleviated issues that could otherwise prevent new lease claims from progressing. To date, Coole Bevis LLP have progressed a number of matters adopting the new protocol and we are pleased to be able to continue to provide all our clients with the same levels of service, albeit remotely.
Our specialist team are still here to help, so if you are considering claiming a new lease, do not hesitate to contact us at firstname.lastname@example.org.