I have served a notice on the freeholder of my flat and he has asked me to pay a deposit. Do I have to pay this?

by The Chartered Surveyor

Question

I am applying for a new lease under Section 42 of The Leasehold Reform, Housing and Urban Development Act 1993.  What other costs will I have to pay in addition to the premium for the new lease?

Answer

In accordance with Schedule 2, Paragraph 2 of the Regulations the freeholder (landlord) can serve on the lessee (tenant) a notice requiring them to pay either £250 or 10% of the amount of the proposed premium, whichever is the greater. If the Section 42 Notice is later withdrawn, or ceases to have effect, the landlord can be required to return the deposit.  However, the landlord would be entitled to deduct any costs incurred that he would be entitled to claim under Section 60 of The Leasehold Reform, Housing and Urban Development Act 1993.

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