When you extend your lease under the statutory (formal) process, the law requires you to pay not only the premium (the price for extending the lease) but also your freeholder’s reasonable professional costs.
These costs are governed by Section 60 of the Leasehold Reform, Housing and Urban Development Act 1993, which sets out what a freeholder can and cannot claim back from you:
- Recoverable costs (you must pay):
- The freeholder’s reasonable legal fees for preparing and completing the new lease.
- The freeholder’s valuation fees for obtaining a professional valuation of your flat in order to respond to your claim.
- Non-recoverable costs (you do not have to pay):
- The freeholder’s costs of negotiating the amount of the premium.
- Any costs of attending a Tribunal hearing (unless the Tribunal makes a specific costs order, which is rare).
- Extra expenses not reasonably incurred in connection with the statutory process.
In practice, this means that while you are responsible for covering your landlord’s basic professional fees, you are protected from being charged for unnecessary extras or excessive costs. If a dispute arises about what is “reasonable,” the First-tier Tribunal (Property Chamber) has the power to decide.
It’s important to understand that these freeholder’s costs are separate from the premium you pay for the lease extension, and also separate from your own professional fees (your own surveyor and solicitor). At extension.lease, we can give you a clear, realistic estimate of the total cost of the process — including the premium, your own fees, and the freeholder’s recoverable costs — so that you know exactly what to expect before you begin.
