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Leasehold Extensions – A Guide To Terminology

Please note:

This is a service WE NO LONGER PROVIDE.

This guide has been retained purely as a source of information for people who may wish to know more.

Confused about the terminology or jargon used in relation to leasehold extensions? Our simple guide will help you to understand the common jargon used throughout the process.

Absent landlord

An absent landlord/freeholder is simply one that is not around – this could be due to the fact that the freehold is owned by a company which has long since been dissolved or an individual who may have simply forgotten about their ownership, particularly if they own a large portfolio of property.

The absentee freeholder of course may not actually be missing and it is worth investigating further, for example undertaking a search of the electoral roll or instructing search agents in an attempt to locate them.

Not only could this resolve the issue but it is also important to show that reasonable steps have been taken to locate the absentee landlord/freeholder and to prove that they really are missing if a Court application is to be made for an extension of the term of the lease.

Competent landlord

To start your lease extension the initial notice (Section 42 Notice) is served on the “competent landlord”.

The competent landlord is the landlord with a sufficiently long interest in the property that is able to grant the 90 year extension.

Counter Notice

This is the notice the landlord serves on the tenant in response to the Section 42 notice.


It is likely that a landlord will request payment of the statutory deposit once the notice is served. This will be either 10% of the premium quoted in your initial notice or £250, whichever is greater.

Extending a lease

Extending a lease is the term used to define the process of negotiating a longer term to be added to the remaining lease. Providing you satisfy the requirements for a lease extension a successful extension adds 90 years to the existing lease.

Lease Extension

A lease extension is an extension of the lease that provides a term of 90 years on top of the existing lease term.


Leasehold means that you have a lease from the freeholder or landlord to use the property for a period of years. A residential lease is often considered a long lease of a term of 90 years or more.

First Tier Tribunal

The First Tier Tribunal is the body appointed to make decisions on various types of dispute relating to residential leasehold property. The First Tier Tribunal is an independent decision-making body which is completely unconnected to the parties or any other public agency. The Tribunal will look at the leasehold dispute and determine the issues eg. the amount of the premium to be paid for the extended lease.

Marriage Value

If you renew a lease with less than 80 years left the leaseholder has to pay to the freeholder ‘marriage value’. Marriage Value is 50% of the increase in the value of the property as a result of a longer lease.
For example;

If the property was worth £80,000.00 and the lease extension made the property worth £100,000.00 the leaseholder would pay a Marriage Value fee of £10,000.00

Peppercorn Rent

Peppercorn rent is a nominal or small rent. This is attractive to a new buyer as the extension has already been made and the ground rent has been reduced.


The premium is the sum you must pay for extending your lease. This amount varies depending on the term left of the current lease and the value the lease extension will add.

Section 42 Notice

A Section 42 Notice is the notice that the tenant serves on the competent landlord to start the lease extension process.


The term is the period of years and months in the lease, the term you have been granted use of the property.