New tenancies and leases

All new tenants now have a secure fixed term tenancy. This means that you start off with an introductory tenancy; this is followed by a secure fixed term tenancy for five years or, in some cases, two years. Your neighbourhood officer will tell you how long your secure fixed term tenancy will be for and it will be written on your tenancy agreement.

At the end of the fixed term a review will be made of your circumstances and how you kept to your tenancy agreement. We will then decide, in accordance with the tenancy policy, whether to offer you another tenancy and, if so, what length of tenancy to offer.

This new policy will not affect existing secure Council tenants, even if you transfer to another council tenancy in the future.

Most lease agreements (leases) with the Council’s housing stock follow a similar format, though you should check your particular agreement individually.

The general format is that the lease describes the property, buildings, estate and their locations, and then lists various conditions that must be followed by either the lessee or the lesser (the Council as landlord). These are shown as numbered clauses. They are followed by a description of the property itself, indicating what is yours to maintain as leaseholder (the “demised premises”), and is then followed by different “schedules” of the lease, which are instructions on what can and cannot be done.

Attached to the lease will be one or two plans (lease plans) showing the location of the property in relation to others, and outlining the demised premises and rechargeable areas. 

Some of the most important parts of the lease are summarised below:

Clause 3(ii)

This clause generally states that the lessee must pay service charges in accordance with the fifth schedule of the lease agreement.

Clause 4(ii)

Subject to lessee(s) paying service charges under Clause 3(ii), the lesser (landlord) must (a) insure the building and (b) make sure that the building is maintained. This clause outlines what the landlord has to maintain in accordance with the lease.

First Schedule

This explains the general responsibilities (Demised Schedule) of both the landlord and the lessee in maintaining the property.

Second and Third Schedule

The Second Schedule refers to the lease plans for the purpose of access and services that the lessee should receive, i.e. water etc. The Third Schedule refers to the exceptions and reservations that may be associated with points in the Second Schedule.

Fourth Schedule

This refers to the Management Regulations, i.e. things that the lessee is required to do to comply with the lease agreement. For instance one thing this schedule says in most cases is that “the lessee shall carpet and provide suitable underlay to the living room and bedrooms of the demised premises to the full extent of the floor area of each of the said rooms.”

Fifth Schedule

This generally states that the lessee will be charged for any costs that are incurred by the lessor in complying or in connection with the fulfilment of their obligations under Clause 4(ii) in maintaining the building, and in maintaining the grounds and boundaries associated with the lease, plus management costs.

Without getting too detailed, the Fifth schedule together with clauses 3(ii) and 4(ii) tell you that you should pay service charges, and clause 4(ii) tells you what services you should receive, in exchange for those charges.

The lease plans contain highlighted or shaded areas, and boundary lines. The boundary lines indicate the extent of either your demised premises or the areas in and around your building (and estate) that you have access rights over, and for whose costs you may be recharged a share. Your building will be shaded in, and other areas will be shaded or coloured in. In general these are the areas to which you have access rights, and towards whose costs in particular you may be asked to pay.

 

Extending your lease

Most leaseholders have the right to extend their lease under the terms of the Leasehold Reform Housing and Urban Development Act (1993).

The Council's Legal Services do not provide advice or provide an indication of the cost to extend your lease. Before you make an application to extend your lease you should seek your own independent advice.

Leases are granted for a period of 99 or 125 years. As a leaseholder you will own your property for a fixed term period as stated in your lease.

Once the remaining lease falls below 80 years, it may be difficult to re-sell your property. Lenders are often unwilling to offer mortgages on properties with less than 80 years unexpired.

We can help you to extend your lease through two routes:  

  • Statutory Lease Extension or,
  • Voluntary Lease Extension

You may wish to obtain a valuation of your home from a Royal Institute of Chartered Surveyors accredited surveyor, to get an indication of the likely cost (premium) you will pay to extend your lease.

There is further information on the Leasehold Advisory Service website, including an online lease extension calculator which may help you to estimate how much it will cost to extend your lease.

 

Statutory Lease Extension

If you are a Leaseholder you are able to extend your lease by adding a further 90 years through a statutory process, providing you meet the following criteria:

  • You must have been a leaseholder for a minimum of two years.
  • The lease must have been granted for more than 21 years.

You do not have to be a resident leaseholder. Once it is extended your ground rent will be set at a ‘peppercorn’ rent (£0).

How it is assessed:

  • the value of the ground rent income
  • the value of the Freeholder's ‘reversion’ at the end of the lease. Reversion refers to when a property "reverts" to the original owner once the lease term has expired.
  • 50% of the 'marriage value' i.e. the amount that the value of the flat increases when the lease is extended. Marriage value is not payable if the existing lease has more than 80 years unexpired.

Alongside the premium, the Leaseholder is obliged to pay the Council’s legal costs, valuation costs and the Stamp Duty.

If you wish to explore this option, please write to the Home Ownership team at: HM-HomeownershipTeam@rbkc.gov.uk

To start the statutory process, you will need to appoint a solicitor to submit a formal notice under section 42 of the Leasehold Reform Housing and Urban Development Act 1993. The notice should be submitted to the Director of Legal Services at the Royal Borough of Kensington and Chelsea, The Town Hall, Hornton Street, London W8 7NX or by DX to 84015 Kensington High Street 2. 

We recommend you seek independent legal advice to help you as the process can be complicated.

 

Voluntary Lease Extension

Kensington and Chelsea Council also offer voluntary lease extensions. This non-statutory procedure means you do not need to serve a formal notice under Statutory Section 42 of the Leasehold Reform Housing and Urban Development Act 1993.

Leaseholders can extend at any time regardless of how long they have owned their lease.

Leaseholders can extend their lease for as many years as they can up to 125 years in addition to their remaining lease term, providing they pay the Council a premium (which is to be valued).

The Ground Rent will be £50 per annum.

  • There will be a reduction in the premium for a voluntary lease extension of £7,500. This means that the premium cost of your lease extension will be reduced by £7,500 and in exchange you will have to surrender your existing lease and will be granted a new lease for your chosen period up to a maximum of 125 years plus the remaining term of your old lease.

Alongside the premium, the Leaseholder is obliged to pay the Council’s legal costs, valuation costs and the Stamp Duty.

We recommend you seek independent legal advice to help you with the process as it can be complicated.

If you wish to explore this option, please write to the Home Ownership team at: HM-HomeownershipTeam@rbkc.gov.uk