What is a Section 42 Notice?

24 Jan 2020

A Section 42 Notice (or Tenant’s Initial Claim Notice) is served by the tenant (flat owner) on the landlord and marks the beginning of the statutory lease extension process.

In order to serve a Section 42 Notice, you must be eligible to extend your lease under the Leasehold Reform Housing and Urban Development Act 1993. Generally, a flat owner is considered eligible if they meet the following criteria:

  1. The lease was in excess of 21 years when first granted
  2. The tenant has owned the property for two years

There are however certain other eligibility critera and exclusions;  to be sure you are eligible for a statutory lease extension, our team of experienced lease extension solicitors can help.

Contents of the Section 42 Notice

The main role of the Section 42 Notice other than starting the claim is to propose the terms of the lease extension; primarily the main part of this is to propose a premium (purchase price) for the lease extension process to the landlord. This price should be determined through a valuation by a qualified surveyor, as plucking a figure out of the air can lead to the notice being invalid. The notice will need to contain other terms and proposals in order to be valid, and you are best advised to liaise with an expert lawyer about these in order to get the Notice right first time.

Time limits

The Section 42 Notice gives the landlord/freeholder must give the landlord a deadline (which must be a minimum of two months) by which they must serve their Counter Notice (a Section 45 Notice). This Counter Notice will either accept or decline the terms (including the premium) put forward; if declined, the landlord will make counter-proposals. There will then be a further period of up to six months for further negotiations to try to reach an agreement.

If the landlord fails to issue a Counter Notice within the allocated time frame, then the flat owner can instruct their solicitor to apply to Court for a vesting order. If this is granted, the court will take over the responsibility of progressing the lease extension in line with the leaseholder’s terms.

Accuracy is key

A Section 42 Notice is an important legal document which your lease extension claim is based upon; once it is served, it starts a timetable for progression and obligations on you to pay the landlord’s costs. It must be submitted correctly and without any inaccuracies. If there are inaccuracies, the notice could be rendered invalid; disputing validity in the Courts is a costly exercise, you may have to start the claim process again with a new Notice; in certain circumstances you may not be able to make another application for a further twelve months.  This can be particularly troublesome if your lease is running low and approaching 80 years remaining – once the lease drops below 80 years remaining the premium you pay increases significantly.

Do you need help drafting a Section 42 Notice? Our team of skilled lease extension lawyers can help you through the process and submit a legally accurate notice on your behalf, putting your mind at ease. Call Laura Russell today on 023 8082 0528 to discuss your requirements or email leasehold@trethowans.com

 

 

 

Author

Laura Russell

Solicitor