However, the Act also makes it possible for L to avoid having to give a statutory extension, on the basis that he intends to demolish the flat (or carry out substantial works of construction). L can only apply to the court to exercise this right within (i) the 12-month period before the expiry of the original lease, or (ii) within five years of the end of the extended lease. If L gets a court order, then he must pay compensation to T.

It is important to note that L’s right to object to a lease extension does not apply outside the Act. Thus, if L voluntarily agrees to grant an extension (ie when he is not obliged to do so – for instance, if T has not been resident for two years) then any clause in that lease by which T waives the right to a subsequent statutory extension will be invalid. It follows that T could negotiate a 90-year non-statutory extension to an original lease, and L could then in the future be obliged to grant a second 90-year statutory extension. Moreover, L would not be entitled to end the negotiated non-statutory lease extension on redevelopment grounds, since it had not been granted under the statute. Accordingly, there may be a trap for L in agreeing a non-statutory extension (this is particularly important for Ls with mixed-use developments, where preserving the right to end a lease extension so as to allow commercial development could be vital). Source: Lovells. © Practical Lawyer