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Selling a flat whilst obtaining a statutory lease extension

Selling a flat whilst in the process of obtaining a statutory lease extension.  Is this possible?

Many Flat Owners think that they cannot market their flat, or even complete on a sale, if they are going through the statutory lease extension process. This is not correct. Even those that are aware that this is possible are put off for fear of the complexity and stress.

If the process is properly managed then it does not have to be stressful at all, and a sale can proceed.

Please contact our specialist Samantha Marsh, Leasehold Enfranchisement Team, for legal advice on 01329 552725 or at Samantha.Marsh@glanvilles.co.uk.


A Flat Owner must have owned the flat for two years to be able to start the statutory lease extension process.  The Leasehold Reform, Housing and Urban Development At 1993 (“the 1993 Act”)  provides that the leaseholder/seller can assign the benefit of the lease extension notice (known as a ‘s42 Notice’)  to a buyer meaning that the buyer can avoid the two year ownership requirement and essentially step into the shoes of the seller.

So how does this work in practice?

This can work in one of two ways; in either case the seller must serve the s42 Notice on the freeholder to start the Statutory Lease Extension process before completion of the sale to the buyer.

(1)        The seller completes on the sale with the buyer having paid a discounted value for the flat that reflects its short lease.  The benefit for the buyer is the certainty of being able to complete the statutory lease extension within a couple of months by taking the assignment of the process from the Seller.  The flat would have been marketed at a higher price (known as its ‘full market value’),  if it had a longer lease, and so the buyer has paid a fair price for the flat given that they will need to spend money on the lease extension.

In this situation the seller will have to accept that the price that they are going to receive will be less than if they complete the lease extension and then market the flat but it allows the seller to complete quickly and take the full balance of any proceeds of sale, without having to have monies potentially tied up for around 6 months whilst the lease extension process is completed.

(2)        The seller starts the lease extension process and the buyer pays the full market price for the flat that they would expect to pay if the lease extension had been completed.  The seller’s solicitor retains sufficient monies from the sale, pending completion of the lease extension some months later, having redeemed and mortgage(s) and paid any costs.  On completion of the lease extension the seller’s solicitor releases sufficient monies to cover the costs of the lease extension and releases any balance to the seller.

            In this scenario the seller has received the full market value for the flat and the buyer has the certainty of purchasing a flat with a long lease.

In both of the above scenarios the buyer will end up with a lease that has an additional 90 years on top of the remaining lease length at a peppercorn ground rent.

Whilst these types of transactions are becoming increasingly common, it is vital that parties take expert valuation and legal advice before embarking on a sale or purchase of a flat with a short lease.  To minimise unnecessary costs and delays it is recommended that the same firm acts in both the conveyancing and the lease extension matters to ensure that the processes blend seamlessly together.  If you would like to obtain further advice please call Samantha Marsh on 01329 552725.