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How do I extend my lease if a Headlease exists?

What is a Headlease?

A leasehold interest that exists in between the flat lease and the freehold is known as a ‘Headlease’ or ‘intermediate lease’; both terms mean the same thing.

Lease extensions can be obtained in one of two ways; either by starting the statutory process or by agreeing terms informally with the freeholder.

Generally speaking, the formal Lease Extension Notice should be served on the person/company who has the power to grant the new lease. In most cases, this person is the freeholder of the building or block in which the flat is located. However, occasionally there is a Headlease. A Headlease is usually granted for a longer term than the flat lease, which means it will run for a longer time than the lease of the flat.

The first difficulty in these cases is working out who is obliged to grant the lease extension. The person who owns the Headlease cannot grant it if it would result in the newly extended flat lease being longer than the lease that the Headlease-holder has.

Lease extensions involving a Headlease are much more complicated than standard lease extensions and it is even more important that a leaseholder takes specialist advice. The reason for this is that the Headlease will often contain provisions such as maintaining, repairing and insuring the building or block. The owners of the flats in the block/building are entitled to rely on the Headlease-holder to carry out these functions. If the flat Lease is extended, it is important to ensure that these obligations remain in place once the lease has been extended.

The legislation contains provisions to deal with what happens in the event that there is a Headlease interest.

Problems arise if a leaseholder tries to agree private terms with the freeholder. In these circumstances, a private lease extension may not be possible due to the complexity and interaction of the legal titles. The reason for this is that the freeholder’s solicitors may not be prepared to offer an adequately worded new Lease that both protects the leaseholder’s position and is acceptable to mortgage lenders.

The difficulty is that when private lease extensions are negotiated, the focus is largely on the price payable for the new lease, with little thought being given to any other points, such as maintenance, repairs and insurance for the building/block. Should this happen, flat owners may find it difficult to sell or re-mortgage their flat and it may be a costly exercise to correct.

Author: Samantha Marsh

Glanvilles Solicitors

DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. This article is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered in this article, please speak to Glanvilles Solicitors directly.

Published on 2nd April 2015
(Last updated 7th May 2021)