Long residential leases
The Trust grants many leases of houses up and down the country. Some of these leases are ‘long leases’ in that they originally lasted for more than 21 years. A lease of a house is different from outright ownership. A lease is a right to live there only for a limited period of time. This note is relevant to you if you’re a long leaseholder or if you’re thinking of buying a long lease from an existing leaseholder of the Trust.
This note sets out the Trust’s current approach to requests to extend long leases and how the Trust deals with rent issues and necessarily touches on some of the law on leases. However, it shouldn’t be seen as an authoritative statement of the law and you should always seek advice from a qualified legal person (such as a solicitor) who is acting specifically for you and can advise you on your own particular circumstances.
The Trust’s approach may change from time to time so please always check with us before taking major decisions on things dealt with in this note.
1. Extending your lease
Your lease should set out when it starts and how long it runs for. As time passes long leases inevitably start running out. At some point you may well want to extend the lease.
1.1 Legal Right to Extend
Your lease may have a legal right for it to be extended. The most common legal right relevant to the long leases of houses owned by the Trust is the right to a 50 year extension under the Leasehold Reform Act 1967. Your lease may qualify under this legislation or may already have been extended under this legislation. So you should always check with your own legal advisor as to whether or not your long lease has a legal right to be extended.
If your legal advisor considers you do have a legal right to an extension and you want to take advantage of such a right then your legal advisor should write to the Trust’s legal team at:
National Trust Legal Department
Wiltshire SN2 2NA
1.2 No Legal Right to Extend
If you’ve no legal right to extend your long lease and you’d like to ask the Trust whether it is willing to voluntarily extend your long lease, then you need to contact the Trust's local estate manager/rural surveyor who deals with your house, via our regional contact details.
The Trust has certain criteria it applies when considering such requests. These criteria, amongst other things, take into account matters such as the specialness of your house in terms of heritage and conservation.
If the Trust agrees (and it may not agree) that your lease can be extended then we will need to agree with you what you should pay for the extension. The estate manager/rural surveyor will outline the process to you.
Normally, you’ll be paying rent to the Trust – typically on an annual basis. The lease usually sets this out but sometimes other legislation may also be relevant – your own legal advisor will be able to help you here.
Long Leases which have been extended under the Leasehold Reform Act 1967 (as mentioned earlier) normally have special provisions regarding rent – these are known as Modern Ground Rent provisions.
Modern Ground Rent arises when, under the terms of the Act, long leaseholders may have the right to statutorily extend their leases by up to 50 years. This extension is in return for payment of a higher rent known as ‘modern ground rent’. This is likely to be significantly more than the nominal annual amount payable before the extension begins.
The Trust has discovered that some long leaseholders were not aware of the way in which Modern Ground Rents work and had not been properly advised by their solicitors or valuers when they bought their properties.
The Trust has been looking at this issue for the past four years since it first became aware of how little Modern Ground Rent was understood among many of its long leaseholders. It has been reaching agreements with a number of them in order to lessen the impact of Modern Ground Rent.
However, the Trust has increasingly seen that, in many cases, finding out about the rises in Modern Ground Rent has caused serious concerns for long leaseholders. We approached the Charity Commission which has agreed to our request for an Order enabling us to remove the effect of Modern Ground Rent altogether for most long leaseholders.
In these situations the Modern Ground Rent will be replaced with an index-linked rent based on the current nominal rent.
The Trust is now working with the individual leaseholders to put this into effect. If you think this scenario is relevant to you then please contact your Lead Rural Surveyor for the part of the Trust where your property is situated.