Lease Extension - Tenant's Notice

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    Lease Extension - Tenant's Notice

    Good afternoon,

    My daughter and two other tenants of three flats above retail premises wish to extend their leases - currently having 72 years remaining (retail premises are more than 25% of floor area so freehold purchase not possible).

    A chartered surveyor is currently carrying out a valuation of the flats and calculation of a lease premium. We would then like to attempt to reach an agreed premium with the freeholder by informal negotiation. However, previous experience leads us to think that we will have to serve S42 Tenant's Notices.

    If possible, we would like to serve the notices without a solicitor's involvement to keep costs to a minimum.

    We have prepared Notices following the requirements contained in the Act but I'd like to be sure about the following:

    * Particulars of the lease: Am I correct in I assuming that these are the date and parties from the original granting of the lease in 1982?
    * Terms to be contained in the new lease: is it adequate to say something like "existing term extended by 90 years, all at peppercorn rent, otherwise as existing lease updated for legal or other changes since the grant of the original"?
    *Any other pitfalls to beware?
    *Do we need to serve notices separately or can we serve all three separate leases in one communication?

    Most grateful for any pointers.

    Best regards,

    #2
    1. General replies to your bullet points:
    A. Yes. The particulars demanded relate to existing lease.
    B. As to new lease, what you suggest is OK- but perhaps reserve the power to include/negotiate such other provisions as may be agreed.
    C. There are lots of unknown pitfalls! The problem is that the unknown ones cannot, by definition, be known in advance.
    D. Each Notice must be prepared/signed separately, but all of them can be served together.

    2. Would it not make more sense for:
    a. all lessees to try and enfranchise collectively; and
    b. only thereafter extend leases?

    3. That way, they would pay only one lot of L's fees. Although a s.13 Notice is impossible, due to retail premises, they could suggest to L:
    a. a collective purchase of the whole; and
    b. a simultaneous lease-back to L of the retail premises (so L can continue to be lessor of the retailer T; this is likely to be where most of the property's investment value- and rental income- originates).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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