Free UK Lease Extension Notice — LRHUDA 1993 s.42

Tenant Notice of Claim to Acquire New Lease — LRHUDA 1993 s.42

Flat 9, Vermont Court  ·  42 Westferry Road, London E14 8JB  ·  9 June 2026

This is the TENANT NOTICE OF CLAIM TO ACQUIRE A NEW LEASE served under section 42 of the Leasehold Reform, Housing and Urban Development Act 1993 in respect of Flat 9, Vermont Court, 42 Westferry Road, London E14 8JB.

The tenant is Marcus Penhaligon, qualifying tenant under LRHUDA 1993 s.5 (long lease originally granted for 99 years from 15 June 1989, residual term 62 years). The proposed premium for the new lease is £38,500, calculated on the principles in LRHUDA 1993 Schedule 13.

EXTENSION TERM. Under the current LRHUDA 1993 s.56 the new lease is granted for a term expiring 90 years after the term date of the existing lease, at a peppercorn rent for the entire extended term. The Leasehold and Freehold Reform Act 2024 will replace this with a 990-year extension on commencement of Schedule 8 — those provisions are NOT yet in force as of June 2026 and await secondary legislation.

COUNTER-NOTICE DEADLINE. A counter-notice under LRHUDA 1993 s.45 must be served on the tenant by 10 August 2026 (at least two months from the date of this notice). If the right is admitted but terms cannot be agreed within two months of the counter-notice, either party may apply to the First-tier Tribunal (Property Chamber) under s.48 — application must be within six months of the counter-notice.

Tenant: Marcus Penhaligon
Address for service: Flat 9, Vermont Court, 42 Westferry Road, London E14 8JB
Telephone: 020 7515 4830
Email: marcus.penhaligon@protonmail.com
Property: Flat 9, Vermont Court, 42 Westferry Road, London E14 8JB

Original grant date: 15 June 1989
Original term: 99 years
Residual term: 62 years
Current ground rent: £250 per annum
Marriage value threshold (Sch 13 para 4(2A)): ENGAGED — residual term is 80 years or fewer (marriage value applies under current law; LFRA 2024 abolition pending)

Competent landlord: Riverwell Estates (Westferry) Limited (LRHUDA 1993 s.40)
Address: 4 Berners Street, London W1T 3LA
Proposed premium: £38,500
Basis: LRHUDA 1993 Schedule 13 — diminution in landlord's interest (Sch 13 para 3) + marriage value share (Sch 13 para 4, where engaged) + any compensation (Sch 13 para 5).
Counter-notice deadline (s.45): 10 August 2026
FTT s.48 application window: 2 months after counter-notice (earliest) — 6 months after counter-notice (deadline).

The tenant is a qualifying tenant under LRHUDA 1993 s.5: original lease term 99 years from 15 June 1989, residual term 62 years (below the 80-year Sch 13 para 4(2A) marriage value threshold). The 2-year prior-ownership requirement was removed by LFRA 2024 with effect from 31 January 2025; the tenant purchased on 2 April 2026 (~2 months ownership) and qualifies from day one under the new regime. The proposed premium of £38,500 reflects: (i) diminution in landlord's value on grant of the extended lease, calculated using the Sportelli 5% deferment rate for flats and Mundy real-world relativity at 89%; (ii) marriage value share at 50% (residual term below 80 years, so engaged under current law); (iii) no Sch 13 para 5 compensation. The LFRA 2024 marriage value abolition has not yet been commenced (High Court JR dismissed October 2025; secondary legislation pending) — premium will be revised down if commenced before completion. FTT Property Chamber jurisdiction under s.48 reserved.

(A) LONG LEASE — s.5. A qualifying tenant must hold under a long lease, defined as a lease originally granted for a term certain exceeding 21 years. The tenant holds under a lease originally granted for 99 years on 15 June 1989 — well above the 21-year threshold. The existing lease was granted on 15 June 1989 for a term of 99 years. The original term comfortably exceeds the s.5 21-year long-lease threshold. Land Registry official copy of title NGL781295 at Appendix 1 evidences the registration. There have been no variations to the term and the lease is current (residual 62 years to 14 June 2088).

(B) ONE-DAY OWNERSHIP — LFRA 2024. The Leasehold and Freehold Reform Act 2024 REMOVED the 2-year prior-ownership requirement formerly imposed by s.39(2)(a) with effect from 31 January 2025. Qualifying tenants now qualify from day one of registered legal ownership. The tenant acquired the flat by transfer dated 2 April 2026 (TR1 at Appendix 2; Land Registry priority search reference HX5938247). Under the pre-LFRA 2024 regime the 2-year prior-ownership requirement (former s.39(2)(a) LRHUDA 1993) would not have been satisfied — the tenant would have had to wait until 2 April 2028. The 2-year rule was REMOVED by LFRA 2024 with effect from 31 January 2025. As the s.42 notice is served on 9 June 2026 (post-commencement), the tenant qualifies from day one of ownership. The 1-day rule represents the practical benefit of LFRA 2024 to recent purchasers.

(C) TITLE CASCADE — WELLCOME TRUST v BAULACKEY [2010] 1 EGLR 125. The ownership cascade still requires proof of title. For registered titles, Land Registry official copies suffice. For unregistered titles or where title is comprised of a series of assignments, the cascade per Wellcome Trust requires assignment evidence to establish the qualifying status. Title NGL781295 is registered with absolute leasehold title. The Land Registry official copy at Appendix 1 evidences the unbroken legal estate cascade: original grant 1989 → multiple assignments → tenant's TR1 of 2 April 2026. The Wellcome Trust Ltd v Baulackey [2010] 1 EGLR 125 cascade issue (proof of title for unregistered estates) does not arise here as title is registered.

(D) COMPETENT LANDLORD — s.40. The competent landlord is the landlord whose reversion is sufficient to grant the new lease — usually the freeholder, but where there are intermediate leasehold interests the competent landlord is the one with a reversion at least as long as the new lease term. The competent landlord identified in this notice is Riverwell Estates (Westferry) Limited. The freehold title to 42 Westferry Road is registered to Riverwell Estates (Westferry) Limited under title NGL412789 (Land Registry official copy at Appendix 3). There are no intermediate leasehold interests with reversions sufficient to grant the new lease (any sub-licences would be insufficient). Riverwell is therefore the competent landlord within s.40 LRHUDA 1993. Its registered office at 4 Berners Street, London W1T 3LA is the address for service in England and Wales.

Conditions narrative:
All four limbs of the qualifying conditions matrix are satisfied with documented evidence. The landlord is invited to admit the right in its counter-notice and focus negotiation on the premium and any ancillary terms.

(A) DIMINUTION IN VALUE — Sch 13 para 3. The landlord's interest is valued before and after the grant of the extended lease. The diminution is the difference. Pre-extension: ground rent capitalisation (residual 62 years) + reversion to freehold deferred at Sportelli rate. Post-extension: peppercorn rent for the residual + 90 years (current law) or 990 years (post-LFRA 2024 commencement) + reversion deferred for the much longer term. Pre-extension: landlord's interest comprises (i) ground rent stream £250 per annum for 62 years (capitalised at 7.0% yield = £3,450); plus (ii) reversion to the freehold deferred 62 years (vacant possession value £585,000 × Sportelli 5% deferment factor for 62 years ≈ 0.052 = £30,420). Total pre-extension landlord value: ~£33,870. Post-extension: peppercorn rent for 62 + 90 = 152 years; reversion deferred 152 years (vacant possession £585,000 × 5% deferment factor for 152 years ≈ 0.000526 = £308). Total post-extension landlord value: ~£308. Diminution: £33,870 − £308 = £33,562, before marriage value.

(B) DEFERMENT RATE — SPORTELLI v CADOGAN [2008] UKHL 71. Generic deferment rate for flats is 5% (4.75% for houses). Rates apply nationally subject to rebuttal on real-world evidence. Outside prime central London, additional risk premium per Zuckerman v Trustees of the Calthorpe Estate [2009] UKUT 235 (LC). Hope value rejected as a separate head of compensation. The proposed deferment rate is 5% for flats, following Sportelli v Cadogan [2008] UKHL 71. The property is in E14 (Isle of Dogs), which is on the boundary of prime central London for Sportelli purposes. The landlord may argue for an additional non-PCL risk premium per Zuckerman v Trustees of the Calthorpe Estate [2009] UKUT 235 (LC) — likely seeking 5.25-5.5%. The tenant's position is that E14 is sufficiently established as a residential market to retain the 5% generic rate. Hope value is expressly rejected as a separate head of compensation per the Lords in Sportelli.

(C) RELATIVITY — MUNDY v SLOANE STANLEY ESTATE [2018] EWCA Civ 35. Court of Appeal upheld rejection of the Parthenia hedonic regression model and approved real-world transaction evidence. Practitioners use a hierarchy of graphs (Gerald Eve / Savills / Beckett and Kay) cross-checked with comparable short-leasehold transactions. Relativity for a 62-year residual lease in E14 is taken at 89% (real-world Gerald Eve graph + comparable transactions schedule at Appendix 4: three 60-65 year residual sales in Vermont Court 2024-2026 at £495,000-£525,000 vs hypothetical freehold value £585,000 = relativity 84.6%-89.7%). The Parthenia hedonic regression model is not used (rejected by the Court of Appeal in Mundy v Trustees of Sloane Stanley Estate [2018] EWCA Civ 35 as inconsistent with real-world evidence).

(D) MARRIAGE VALUE — Sch 13 para 4 + LFRA 2024 ABOLITION CONTEXT. Marriage value is the increase in tenant's interest value on grant of the new lease. Where unexpired term EXCEEDS 80 years, marriage value is NIL per Sch 13 para 4(2A). Where 80 years or below, landlord share is 50%. The residual term here is 62 years (at or below 80 — marriage value engaged at 50%). LFRA 2024 abolishes marriage value entirely on commencement. As of June 2026 the abolition has NOT been commenced (High Court JR dismissed October 2025; secondary legislation pending). The residual term is 62 years, BELOW the 80-year threshold in Sch 13 para 4(2A). Marriage value is therefore ENGAGED under current law. Tenant's existing-interest value: £585,000 × 89% relativity = £520,650. Tenant's interest under extended lease: ~£585,000 (peppercorn rent, 152-year term). Difference: £64,350. Less diminution in landlord interest already accounted (£33,562): marriage value pool = ~£30,788. Landlord's share at the statutory minimum 50% = ~£15,394. LFRA 2024 abolishes marriage value entirely on commencement — not in force as of June 2026 (High Court JR dismissed October 2025). If commenced before completion, marriage value drops to nil and the premium reduces to approximately £23,500.

Premium narrative:
Aggregate proposed premium: diminution £33,562 + marriage value share £15,394 - rounding £3,456 = £38,500 (rounded for the s.42 notice; precise valuation reserved for FTT s.48 expert evidence). Contingent on LFRA 2024 marriage value abolition not being commenced before completion — if commenced, revised premium £23,500. Detailed valuation by Cluttons Property Consultants (RICS-registered, Red Book) at Appendix 5.

(A) PRESCRIBED CONTENT — s.42. The notice must specify (i) tenant particulars; (ii) property identification; (iii) particulars of the existing lease (term date, residual); (iv) proposed terms of the new lease (premium + other disputed terms); (v) counter-notice deadline (not less than 2 months from service); (vi) EandW address for service. This s.42 notice contains all prescribed elements: (i) tenant particulars (Section A); (ii) property identification with flat reference and address; (iii) particulars of existing lease (grant date, term, residual, ground rent); (iv) proposed terms of new lease (premium £38,500; other terms as per current lease subject to standard variations); (v) counter-notice deadline 10 August 2026 (2 months + 1 day buffer from 9 June 2026 service); (vi) EandW address for service of counter-notice (tenant's address Section A).

(B) COUNTER-NOTICE — s.45. The landlord must respond by the deadline (>= 2 months). The counter-notice must (i) admit or dispute the right; (ii) accept the tenant's proposed premium or counter-propose; (iii) set out other terms in dispute. Failure to serve a valid counter-notice within the deadline can result in deemed acceptance of the tenant's terms (subject to s.49 court application). Riverwell is expected to dispute (a) the deferment rate (likely arguing 5.25-5.5% for non-PCL risk); (b) relativity (likely Savills graph at 85-86%); (c) marriage value share if it raises a 50%+ contention (statutory minimum but argued upward); and (d) ancillary terms (covenant variations on use, alterations). The right itself is unlikely to be disputed given the registered title and post-LFRA 1-day ownership.

(C) NEGOTIATION WINDOW. Where the right is admitted but terms cannot be agreed within 2 months of the counter-notice, either party may apply to the FTT under s.48. Application must be made any time after the 2-month negotiation window and within 6 months of the counter-notice — failure to apply within 6 months can cause the claim to lapse. Post counter-notice strategy: (1) within 1 month, exchange written without-prejudice valuation submissions including the Gerald Eve / Savills graph dispute; (2) joint surveyor meeting within month 2 to attempt agreement on deferment rate; (3) Calderbank settlement offer at £42,000 to crystallise costs position if Riverwell persists in £55,000+ contention; (4) FTT s.48 application by month 4 of counter-notice (well within 6-month window) if no agreement.

Counter-notice narrative:
Anticipated timeline: 9 June 2026 s.42 notice → 10 August 2026 counter-notice → 10 August-10 October 2026 negotiation window → from 10 October 2026 FTT s.48 application open. Completion target: within 12 months of notice service. LFRA 2024 commencement watch: if 990-year provisions land between 10 August 2026 and FTT determination, tenant will seek to renegotiate term length.

(A) APPLICABLE RULES — SI 2013/1169. The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 govern FTT Property Chamber procedure. Key rules: rule 6 case management; rule 13 cost regime (FTT may award costs for unreasonable behaviour, otherwise no costs follow the event); rule 19 expert evidence; rule 31 oral hearings.

(B) TRACK SELECTION. ORAL HEARING — formal hearing before the Tribunal with witnesses, expert evidence and submissions. The Tribunal directs the appropriate track at case management.

(C) EXPERT VALUATION EVIDENCE. PARTY-APPOINTED EXPERTS — each side instructs its own RICS-registered valuer. Each valuer should be RICS-registered, comply with RICS Red Book valuation standards, and give independent opinion under CPR Part 35 principles (applied analogously in the FTT).

(D) COSTS POSITION — Rule 13. FTT does not generally award costs except for unreasonable behaviour. Each party expected to bear its own costs under rule 13. No anticipated unreasonable behaviour claim absent provocation. Calderbank offer £42,000 at 1-month post counter-notice as costs anchor. Budget for tenant valuer (Cluttons) + counsel (junior, half-day hearing) ~£8,500.

(E) LFRA 2024 990-YEAR EXTENSION CONTEXT. Under current law (LRHUDA 1993 s.56) the new lease term is 90 years from the existing term date at a peppercorn rent. LFRA 2024 Schedule 8 will replace this with a 990-year term on commencement. As of June 2026 commencement is pending — High Court dismissed the freeholders' judicial review October 2025; secondary legislation required. LFRA 2024 Schedule 8 will replace the 90-year extension with 990 years on commencement. Commencement is pending as of June 2026 (High Court JR dismissed October 2025; secondary legislation required). Monitoring strategy: (1) check Lease Advisory Service + DLUHC commencement bulletins monthly; (2) if commencement announced before completion of new lease grant, seek to vary the s.42 proposed terms to 990 years (subject to transitional provisions in commencement regulations); (3) if not commenced, proceed on 90-year basis with reservation of position. Note: peppercorn ground rent is already a feature of current law on extension, so the rent dimension is unchanged.

(F) UPPER TRIBUNAL (LANDS CHAMBER) APPEAL. Appeal lies on a point of law only and requires permission. First apply to FTT; if refused, apply to UT within 14 days under SI 2010/2600 rule 21 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. Cart-style judicial review is severely restricted following R (Cart) v Upper Tribunal [2011] UKSC 28 and section 2 of the Judicial Review and Courts Act 2022. Likely UT grounds in this matter would be misapplication of Sportelli (deferment rate) or Mundy (relativity graphs hierarchy) or LFRA 2024 commencement interpretation. If pursuing appeal: first apply to FTT for permission within 28 days of decision; if refused, apply to UT within 14 days under SI 2010/2600 rule 21. Cart-style judicial review is now severely restricted post R (Cart) v UT [2011] UKSC 28 and s.2 JRCA 2022 — appellate route via FTT then UT is the only practical option.

FTT narrative:
Proposed track: oral hearing with party-appointed valuers (Cluttons for tenant; Savills likely for landlord). Estimated hearing duration: half-day. Bundle to include: valuation reports, Gerald Eve graph + comparable transactions, Sportelli / Mundy authorities, LFRA 2024 commencement position paper. Reasonable adjustment: tenant requests evening or weekend submissions for own evidence due to work schedule (NHS shifts).

The tenant encloses with this notice:

   (a) copy of the existing lease (or Land Registry official copy);
   (b) Land Registry official copy of the tenant's title;
   (c) brief valuation note supporting the proposed premium under Sch 13;
   (d) (where applicable) RICS-registered valuer report;
   (e) any comparable short-leasehold transaction evidence relied on for relativity.