A 'head lease' (also known as an 'intermediate lease' or sometimes called 'headlease') is a leasehold interest that sits in the chain of ownership between the ultimate freeholder (or superior landlord) and you, the flat owner (who holds an 'underlease' or 'sublease'). Think of it as an extra landlord layer. Instead of just you and the freeholder, there is a 'head leaseholder' (the owner of the head lease) who is your immediate landlord, and the freeholder is the landlord to the head leaseholder.

What's the point of holding an intermediate lease?

From a business perspective, holding an intermediate lease allows the head leaseholder (the owner of the intermediate lease) to act as the immediate landlord to the flat owners (underlease holders) and derive income or value from the property. This often involves managing the building, arranging maintenance, repairs, and insurance, and collecting ground rent and service charges from the flat owners. It offers some of the responsibilities and financial benefits typically associated with being a freeholder, but for a finite term (the length of their intermediate lease) and often with less ultimate control than the superior freeholder.

How do you find the competent freeholder?

Identifying the Competent Landlord (sometimes referred to as the competent freeholder) is a vital step when extending your lease with a head lease or intermediate landlord. This is the party who legally holds sufficient interest in the property to be able to grant you the statutory 90-year lease extension you are seeking, and they are the party you must serve the Section 42 Notice upon. Your immediate landlord (the intermediate landlord or head leaseholder) is the Competent Landlord only if they have a lease that is long enough to grant you the full 90-year extension beyond your existing term. If your immediate intermediate landlord's lease is not long enough to satisfy this condition, then the Competent Landlord is the next landlord up the chain with a sufficient interest, which will typically be the ultimate superior freeholder (or superior landlord). You can usually identify the superior freeholder by conducting a title search of the freehold interest at the Land Registry. However, confirming who the legally Competent Landlord is in a complex chain requires careful review of all the leasehold titles by a specialist solicitor.

Can you extend your lease informally with the intermediate landlord?

While it is technically possible to attempt to negotiate an informal lease extension directly with your intermediate landlord or even the superior freeholder, this route carries significant risks, particularly in a complex head lease structure. The intermediate landlord (or superior freeholder) is not legally obligated to grant you an extension, agree to reasonable terms, or adhere to a timeline. The primary risk is that the resulting agreement may not be legally sound or acceptable to future buyers or mortgage lenders. Specifically with a head lease, complications arise because: the intermediate landlord might not actually be the Competent Landlord (the party with the legal right to grant the extension); the agreement might not properly account for the superior freeholder's interest and the premium split; and the specific pitfalls highlighted in the "What Can Go Wrong" section are even more problematic without the statutory framework. Attempting an informal extension without expert legal review means the new lease terms could be disadvantageous (e.g., containing onerous ground rent clauses) or fail to resolve underlying title issues, creating problems down the line. Therefore, regardless of whether you attempt an informal approach or proceed directly with the formal route, it is extremely important to instruct experienced lease extension solicitors and obtain a reliable valuation. Your solicitor will ensure you are dealing with the Competent Landlord and that any agreed terms, formal or informal, result in a legally sound and mortgageable new lease that correctly addresses the head lease structure.

The lease extension process is different if you have a superior landlord and the head lease doesn't have 90 years left to run.

Get in contact today to find out what you can do to extend your lease.

A woman holding a big key. SAM Conveyancing explains what to do if you have a head lease when trying to get a lease extension

Getting a Lease Extension with a Head Lease

by:

Andrew Boast

Last Updated: 06/05/2025

Read by:

1,577

8 min read

If you own a leasehold property, understanding the structure of your lease is crucial, particularly if there is a head lease involved.

A head lease (also known as an intermediate lease) exists when there is an extra landlord, the head leaseholder (or intermediate landlord), positioned between you (the leaseholder) and the ultimate freeholder (the superior landlord or superior freeholder).

This layered structure makes extending your leasehold contract more complicated than a standard lease extension for two main reasons:

The intermediate landlord cannot grant you the full 90-year lease extension you are entitled to under the Leasehold Reform Act 1993 if their own head lease has less than 90 years left to run beyond your current term.
The premium (the price you pay for the extension) has to be shared between the intermediate landlord and the superior freeholder, in proportion to the value of their respective interests.

In this article

What is a Competent Landlord in a Head Lease?

The Competent Landlord is the first landlord in the chain above your lease who legally holds sufficient interest (enough years remaining on their own lease or the freehold) to grant you the full statutory 90-year lease extension.

This is often the superior freeholder, particularly if the intermediate landlord's head lease is shorter than the term being granted.

When pursuing a statutory lease extension, the formal Section 42 Notice claiming your right to extend must be served on this Competent Landlord.

They will then be the primary party managing the formal lease extension process, although the intermediate landlord will also be involved in the valuation and legal process.

While an intermediate landlord might attempt to assert greater rights, legal precedent like the case of Stella Kateb vs. Howard de Walden Estates (2016) suggests their powers to control the extension process are generally limited, and they may need to seek remedy via the County Court.

Got a Lease Extension Enquiry?

Fixed Fees.
Leasehold Specialist Solicitors.
RICS Surveyor Negotiations.
Complicated jargon made simple.
Preparation and serving of Section 42 Notice.

The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published. Read more - Expected changes

How is the Lease Extension Premium Split?

One of the unique aspects of extending your lease when a head lease (or intermediate lease) exists is how the total premium payable is divided between the various landlords in the chain.

Standard Statutory Valuation Principles

The overall premium amount is first calculated based on the standard statutory valuation principles (which cover the freeholder's loss of ground rent, loss of reversion, and marriage value if applicable). However, this total is not paid solely to the superior freeholder.

The Premium Split

Instead, the premium is split proportionately between the intermediate landlord (the head leaseholder) and the superior freeholder.

The division is based on the value of the interest that each landlord is giving up.

A simplified way to understand the statutory split is by considering the remaining term on the intermediate landlord's lease relative to the 90-year extension being granted.

An Example

For example, if the intermediate landlord's head lease has 50 years remaining, and the leaseholder is gaining a 90-year extension, the intermediate landlord's share of the premium would be approximately 50/90ths of the relevant portion of the premium, with the remaining portion going to the superior freeholder.

Accurately calculating this split requires a professional lease extension valuation by an experienced RICS surveyor, as it involves complex valuation principles beyond this simple proportion, but this illustrates the concept.

What happens if you have a mortgage?

If you have a mortgage on your property, extending your lease becomes more complex because the mortgage lender has a charge over your existing leasehold interest.

When you extend the lease, the original leasehold title is effectively replaced or substantially varied, and the lender's charge needs to be transferred to the new or extended lease term.

During the lease extension process, particularly when dealing with a head lease or intermediate landlord, your solicitor will draft a crucial legal document called a Deed of Substituted Security.

This document is essential for acknowledging the mortgage lender's existing charge and transferring it to the newly extended lease terms.

The Deed of Substituted Security protects your lender's security. Without this Deed being properly executed and registered, you cannot complete the lease extension, as your lender would lose their legal charge over the property.

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Does the Lease Extension process take longer with a Head Lease?

A common concern when dealing with a head lease or intermediate landlord is whether this adds extra time to the lease extension process.

The straightforward answer is that if you follow the formal statutory route, the process itself should not take longer than a standard claim (3-12 months).

This is because the timeframes for key stages in the formal process are set out in legislation (the Leasehold Reform Act 1993). These statutory deadlines apply equally whether you are dealing directly with the superior freeholder or through an intermediate landlord.

For example, regardless of the landlord structure, the Competent Landlord (the party receiving the Section 42 Notice) has a fixed period of two months to serve their Counter-Notice in response to your claim.

What can go wrong if there's a Head Leaseholder?

Serving the Section 42 Notice on the wrong landlord
This is a critical mistake. If your intermediate landlord does not hold sufficient years on their own lease, the Competent Landlord is the superior freeholder.
Serving the Section 42 Notice on the intermediate landlord in this situation will result in your notice being invalid and rejected.
Incorrect Premium Valuation or Calculation of the Split
As the premium must be split between the landlords, getting an accurate lease extension valuation is vital.
Errors in the valuation or the calculation of how the premium is divided between the intermediate landlord and superior freeholder can lead to disputes and delays.
Dealing with an Absent Freeholder
If the superior freeholder is absent, this adds another layer of difficulty to the process.
While there is a statutory route for dealing with Absent Freeholders, combining this with a head lease structure requires expert legal and valuation advice.

Working with specialist solicitors and valuers experienced in complex lease structures is highly recommended to avoid these potential issues.

Leaseholder Services with SAM

RICS Valuers for the lease premium.
Handling of the Section 42 Notice.
Negotiations.
The full Lease Extension process.
Tribunal cases.

Frequently Asked Questions

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Written by: Andrew Boast

Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

Reviewed by: Caragh Bailey

Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.

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