A lease extension can be essential for protecting the value of a property. As a lease shortens, mortgage options reduce, resale becomes harder, and the cost of extending increases. Many leaseholders assume that a freeholder can simply refuse a lease extension, but in England and Wales this is not always the case.
The law provides statutory rights to qualifying leaseholders, and a refusal does not necessarily mean the end of the road. Understanding your rights and the correct process is critical to avoiding delay, increased cost, and unnecessary dispute.
When a freeholder can and cannot refuse
Under the Leasehold Reform Housing and Urban Development Act 1993, most residential leaseholders have a legal right to extend their lease by ninety years at a peppercorn ground rent, provided they meet certain criteria. These include owning a long lease originally granted for more than twenty one years and having owned the property for at least two years.
If a leaseholder qualifies, a freeholder cannot simply refuse the extension. They are legally required to engage with the statutory process. However, a freeholder may dispute eligibility, challenge valuation, or delay matters by failing to respond properly.
In contrast, where a leaseholder does not qualify for a statutory extension, the freeholder may refuse an informal lease extension or impose unfavourable terms. This is why understanding which route applies is crucial.
What to do if a refusal occurs
If a freeholder refuses to engage or denies your statutory right, the first step is to check that all eligibility requirements are met and that the correct notice has been served. Errors in notices can invalidate a claim.
Where a valid notice has been served and the freeholder still refuses or fails to respond, the leaseholder may apply to the First tier Tribunal for a determination of the lease extension terms. The tribunal has the power to grant the extension and determine the premium payable.
Delay is a major risk. As a lease drops below eighty years, marriage value becomes payable, significantly increasing cost. A refusal or delay can therefore have serious financial consequences.
Why early legal advice matters
Lease extension disputes are technical and procedural. Small mistakes can cause months of delay or invalidate claims entirely.
Common issues include:
• Incorrect valuation assumptions
• Invalid notices
• Missed statutory deadlines
• Failure to challenge unreasonable freeholder behaviour
• Acceptance of unfavourable informal terms
At Penerley, we advise leaseholders on their statutory rights, deal with unresponsive or difficult freeholders, and guide clients through tribunal proceedings where necessary.
If your freeholder has refused a lease extension or is failing to engage, contact Penerley today to protect your property value and enforce your legal rights.
