A Section 42 Notice is an official document sent by a leaseholder to their freeholder claiming their right to a 90-year lease extension, with a peppercorn ground rent. It is sometimes called a Notice of Claim, a Tenant’s Notice or an Initial Notice.
A “Section 42 Lease Extension” just means that it is a statutory / formal lease extension, rather than an informal one.
Please note we use the term “Freeholder” in this article for ease, but sometimes your notice will actually go to a landlord who owns leasehold title for your block.
Why is it called a Section 42 Notice?
It’s called a Section 42 Notice because that’s the section of the Leasehold Reform Housing and Urban Development Act 1993 which sets out how to serve the notice, and what to include in it.
What’s the process for serving a Section 42?
Generally, a Section 42 Notice is served by a firm of solicitors (although it doesn’t have to be) as part of a wider lease extension process.
Usually the steps are as follows:
Step 1: Your legal team will review your existing title and the title structure from the building which your flat is in – so they know who to serve the notice on and what to include.
Step 2: A valuation is carried out by your valuer, to ascertain how much your lease extension should cost and propose the opening figure which will be contained on your Section 42 Notice.
Step 3: Your Section 42 Notice will be drafted by your solicitor, and they’ll ask you to approve it.
Step 4: Your solicitor will serve your notice on your freeholder’s service address. If you have a third party management company or more than one landlord, then they’ll get copies too.
Step 5: Your freeholder can request a deposit of 10% of whatever was offered in the Section 42 Notice, access to the property to do their valuation, and some supporting documentation.
Step 6: Your freeholder will return fire with a Section 45 Notice, which will almost certainly ask for more money for your lease extension.
Step 7: The price will be negotiated between your valuer and your freeholder's valuer.
Step 8: Your solicitor and that of your freeholder will agree a draft lease, conclude the transaction and register the extended lease at the Land Registry.
Who can serve a Section 42 Notice?
To be eligible for a statutory lease extension you need to meet these criteria:
- Your existing lease was originally over 21 years
- You’ve been the registered owner of your flat for more than two years
- You don’t own the flat on a shared ownership basis.
- Your freeholder is not a protected landlord (e.g. the Crown Estate)
Why is it so important that a Section 42 Notice is right?
A Section 42 is a complex legal document, and like all forms it is quite easy to get wrong! If you insert the wrong information on the notice or miss some out, it is likely that your freeholder will argue that it is invalid.
During a lease extension the leaseholder is responsible for both their own costs and the reasonable costs of their freeholder. If you serve an invalid notice, the best-case scenario is that your freeholder’s solicitor will bill you for time they’ve spent considering whether or not the notice is valid or not and this could waste hundreds of pounds.
Equally, in certain cases inaccuracies on a Section 42 Notice could mean that you have to withdraw the notice and won’t be able to re-serve the notice for another twelve months.
Finally, some unscrupulous landlords will try and use ambiguity in the validity of a Section 42 Notice to their advantage i.e. say “We’ll accept your notice is valid if you accept this inflated price for your lease extension”.
Can I serve a section 42 Notice myself?
Technically it is possible to serve a Section 42 Notice yourself, however for the reasons given above – it makes more sense to instruct a solicitor who specialises in the murky waters of leasehold enfranchisement law. You want to get it right first time!
Timelines with a section 42 Notice
Usually, it takes a few weeks to get to the point that you’re ready to serve a Section 42 Notice.
Before the notice can be served:
- Your solicitor needs to have done a full title review, so they know the specifics of your case and what to put on the notice
- Your valuer needs to have done a valuation, so they know what figure to insert into the notice
- Your solicitor needs to ensure they have the correct address for service for any of the recipients – and often they’ll need to contact the recipient to check this.
Once the notice is served, then your freeholder has two months to respond to the notice, plus some time given for postage. Once they do, there is usually a maximum of ten months to complete the transaction.
You can read more about the lease extension timelines.
What is the cost of serving a section 42 Notice?
Serving a Section 42 Notice is not a standalone piece of work – you can’t do it until you’ve done a title review and the valuation is complete.
Anyone offering to serve a Section 42 Notice without having done this legwork shouldn’t be trusted to get it right!
Equally, a Section 42 Notice contains proposed terms for the new lease on it – so it makes sense that whoever served the Section 42 Notice also does the legal work to extend the lease.
Accordingly, it is hard to give a standalone price for serving the Section 42. We will serve a Section 42 Notice as part of our end-to-end lease extension service which costs £2,580+VAT.
Is it possible to assign a section 42 Notice to the buyer of my flat?
Yes, but we explain how this works in this standalone article.
In Conclusion
In conclusion, a Section 42 Notice is a crucial part of any statutory lease extension and it is important to get it right.
Instruct a solicitor who will ensure that the notice is valid, validly served and then that the process is completed within the deadlines which stem from that notice.
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