When tenants first acquired the right to extend their flat leases under the Leasehold Reform, Housing and Urban Development Act 1993 (Act), there was a perception that this was not as attractive as the other right created by the Act, to collectively acquire the freehold title to the building in which the flats are situated. However, lease extension claims are generally quicker, simpler and the right is more readily available than the right to collectively enfranchise.
A lease is generally marketable (i.e. a bank will lend against the interest) if it is for 80 years or more. It is not uncommon, particularly in Prime Central London, for flats to be sold on leases of under 80 years. Accordingly, it is important that the agents are aware that the statutory right to extend the lease exists and how and when that right can be exercised so dealing with the extension can be dealt with at the Heads of Terms stage.