What Happens When My Lease Ends?

5th Oct 2018

With over four million leasehold properties throughout the UK, we understand that not everyone may be aware of their agreement terms. This includes what happens when their lease is coming to an end. We have put together this guide to help take the stress out of understanding your lease termination.

Security of Tenure

If you lease is due to end, you may be entitled to remain in the property. To qualify for this, you must have a long residential lease (more than 21 years when granted) with a ‘low rent.’ This refers to the ground rent payable. You must also occupy the property, but do not need to be the original owner of the lease.

Low rent is considered as the following:

• Where no ground rent is payable.
• If the lease was entered before 1 April 1990, the ground rent must be below two thirds of the rateable value of the property.
• If the lease was entered after 1 April 1990, the ground rent must be £1,000 or less if the property is within Greater London and £250 or less within other areas.

You may be excluded from the right to remain in your property if it falls into one of the following categories:

• The landlord is a local authority, housing association or charitable trust.
• The lease is of a flat that has been renewed under the Leasehold Reform, Housing and Urban Development Act 1993.
• If the property is let under a business use and contains both business and residential areas.
• If the property is of high value.

What happens when my lease terminates?

The lease will continue unless you or landlord has taken steps to end the tenancy. For this to happen, you must formally surrender the tenancy or the landlord must serve a notice.

When deciding to end your lease, you must give one months’ notice, with the last date ending of the end date of your lease. In doing this, you will lose the right to acquire the freehold, extend the lease and have security of tenure.

If your landlord wishes to end your tenancy, he must give you one of the following forms:

• FORM 1 – ASSURED PERIODIC TENANCY – This is best described as a secure monthly tenancy at a market level rent with new terms. You will no longer have any rights of ownership of the property. If you disagree with any of the new terms laid out, you must respond within 2 months. If an agreement cannot be made, then the landlord may request that they are to be determined by the Rent Assessment Committee.
• FORM 2 – SEEKING POSSESSION OF THE PROPERTY – The landlord will need to state grounds for possession i.e. breach of lease obligations, payment arrears, suitable alternative accommodation.
• FORM 3 INTERIM RENT – This is normally served with Form 1, proposing a new monthly rent.

You cannot be made to leave the property at the end of your lease, except by court order for possession.

If you have any concerns or questions in regards to the termination of lease, please get in touch with the Blocsphere team! You can find our contact details here.