A landlord’s counter notice is the point where a lease extension stops being a question of whether you want to proceed and becomes a live negotiation with legal deadlines. If you need to respond to landlord counter notice terms, the priority is not to fire back with a quick acceptance or rejection. It is to understand exactly what has been admitted, what is being challenged and what you must do to preserve your statutory rights.
For most leaseholders, this is the stage where uncertainty becomes expensive. The landlord may accept your right to extend but propose a higher premium. They may dispute the valuation date, question your eligibility or include terms that need closer scrutiny. A well-managed response keeps the process controlled and gives you the best chance of securing a fair outcome.
What a landlord counter notice means
If you have served a valid statutory lease extension notice under Section 42 of the Leasehold Reform, Housing and Urban Development Act 1993, the landlord will normally have at least two months to serve a counter notice under Section 45.
The counter notice should set out the landlord’s position. In practical terms, it will usually do one of three things: admit your right to a new lease and state the landlord’s proposed terms; admit the right but dispute the premium or other terms; or deny that you are entitled to a statutory lease extension.
A counter notice that accepts your claim is not a bill you have to pay immediately. It is the landlord’s opening position. The premium stated can be significantly above the figure in your initial notice, particularly where the lease is shorter, the flat has a high value or marriage value is in play under the current rules.
That said, it should never be ignored. The statutory timetable starts to matter as soon as the notice is served.
Check the notice before you negotiate
Start by confirming the basic facts. Check the date on which the counter notice was served, the landlord named in it and whether it clearly states which parts of your claim are accepted or rejected. Your solicitor should review the legal position, while a RICS-registered valuer can assess whether the proposed premium is commercially realistic.
Pay particular attention to the landlord’s proposed premium and any changes to the lease terms. A statutory extension will generally add 90 years to the existing term and reduce ground rent to a peppercorn, but there can still be points to resolve around wording, rights, reservations and the treatment of any defects in the existing lease.
If the landlord says you do not qualify, ask why. Common issues include an alleged failure to meet the two-year ownership requirement, a problem with the original notice or a question over the landlord’s identity. A denial is serious, but it is not automatically correct. You need prompt legal advice because the route and deadline for challenging it may differ from a standard valuation negotiation.
How to respond to landlord counter notice terms
There is no benefit in accepting a proposed premium simply because the notice looks formal or because you want the matter over with. Equally, an unrealistic counterproposal can prolong the process and increase professional costs. The aim is a defensible figure supported by evidence, not a reflexive compromise.
Your valuer will usually compare the counter notice valuation against the assumptions used for your Section 42 notice. They may consider the remaining lease length, ground rent pattern, flat value, local evidence and the relativity adopted. Where the two valuations are not far apart, sensible negotiation may resolve matters quickly. Where there is a wide gap, both sides should identify the assumptions causing it.
Your solicitor should also confirm that correspondence is properly framed. A negotiation email is not necessarily a formal legal response, and informal exchanges do not stop statutory deadlines from running. Keep a clear record of offers, counteroffers and agreed points.
Do not miss the tribunal window
Where the landlord admits your claim but you cannot agree the premium or terms, either party can apply to the First-tier Tribunal for a determination. As the leaseholder, you can generally apply no sooner than two months and no later than six months after the landlord’s counter notice is served.
This is one of the most important dates in the entire process. If no application is made within the required period, your Section 42 notice can be treated as withdrawn. That can mean lost time, further costs and, in many cases, a wait before you can serve a fresh notice.
You do not have to wait until the final week in the hope that the landlord will become more flexible. Productive negotiations can continue after a tribunal application is made, and many cases settle before a hearing. The application is often about protecting your position while keeping the door open to agreement.
If the counter notice denies your right
A landlord who disputes your entitlement must give reasons in the counter notice. This moves the issue away from valuation and towards legal validity. Your solicitor may need to consider an application to the county court for a declaration that you are entitled to the new lease.
The timescale can be shorter than people expect. In many cases, action must be taken within two months of the counter notice. Do not assume that continued correspondence with the landlord is enough. If the claim is not challenged correctly and on time, the statutory notice may fall away.
Decide whether settlement is worth it
A negotiated settlement can be the right answer where the difference in premium is modest and the cost of further valuation work, legal correspondence and a tribunal application would outweigh the likely saving. It can also be sensible where both parties want certainty and a prompt completion date.
But settlement should be an informed decision. Ask for a clear comparison between the landlord’s figure, your valuer’s opinion and the likely cost of continuing. Consider the remaining lease term too. Leases approaching 80 years are particularly sensitive under the existing framework because marriage value can materially affect the premium. Leasehold reform may change aspects of the landscape over time, but it is not a reason to let a live statutory deadline pass.
For landlords, the same principle applies. A counter notice should be commercially grounded, not simply pitched high as a negotiating tactic. A clear valuation rationale and well-prepared documentation reduce back-and-forth, help avoid avoidable disputes and support better asset management across a portfolio.
Keep costs and communication under control
Under the statutory route, the leaseholder is normally responsible for the landlord’s reasonable legal and valuation costs, although not generally the costs of tribunal proceedings themselves. “Reasonable” is the key word. Ask for estimates, understand what work is being undertaken and query charges that appear disproportionate to the matter.
The landlord cannot use costs as a substitute for a fair premium, and you should not let concerns about costs push you into accepting terms without proper advice. A managed process gives you a clearer view of the valuation, legal steps, deadlines and likely expenditure before decisions become urgent.
It also helps to keep one person responsible for the timetable. Lease extension cases often involve a managing agent, freeholder, solicitor, valuer and sometimes an intermediate landlord. Instructions can become fragmented quickly. Make sure all parties know that a counter notice has been received, provide a copy immediately and agree who is monitoring the next statutory date.
A practical route forward
Once the counter notice arrives, obtain legal and valuation review promptly, identify the true points of disagreement and set a decision date well before any tribunal or court deadline. If the landlord’s position is reasonable, negotiate with purpose. If it is not, protect your rights first and let the evidence guide the next step.
Lease Plus 90 helps leaseholders bring valuation, legal process and landlord engagement into one structured journey, reducing the administrative pressure that often causes missed opportunities. The aim is not to make a technical process sound simple when it is not. It is to make sure every decision is clear, timed properly and made with the right information in front of you.
A counter notice is not the end of your lease extension claim. It is the moment to replace uncertainty with a plan – and to keep control of a valuable property asset while there is still time to act.
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