Regulation 11 Leasing of a residential commonhold unit

(1)

A term of years absolute in a residential commonhold unit or part only of a residential commonhold unit must not—

(a)

be granted for a premium;

(b)

subject to paragraph (2), be granted for a term longer than 7 years;

(c)

be granted under an option or agreement if—

(i)

the person to take the new term of years absolute has an existing terms of years absolute of the premises to be let;

(ii)

the new term when added to the existing term will be more than 7 years; and

(iii)

the option or agreement was entered into before or at the same time as the existing term of years absolute;

(d)

contain an option or agreement to renew the term of years absolute which confers on the lessee or on the lessor an option or agreement for renewal for a further term which, together with the original term, amounts to more than 7 years;

(e)

contain an option or agreement to extend the term beyond 7 years; or

(f)

contain a provision requiring the lessee to make payments to the commonhold association in discharge of payments which are due, in accordance with the commonhold community statement, to be made by the unit-holder.

(2)

A term of years absolute in a residential commonhold unit or part only of a residential commonhold unit may be granted for a term of not more than 21 years to the holder of a lease which has been extinguished by virtue of section 7(3)(d) or 9(3)(f) if the term of years absolute—

(a)

is granted of the same premises as are comprised in the extinguished lease;

(b)

is granted on the same terms as the extinguished lease, except to the extent necessary to comply with the Act and these Regulations and excluding any terms that are spent;

(c)

is granted at the same rent as the rent payable under, and including the same provisions for rent review as were included in, the extinguished lease as at the date on which it was extinguished;

(d)

is granted for a term equivalent to the unexpired term of the lease immediately before it was extinguished or, if the unexpired term of the lease immediately before it was extinguished is more than 21 years, for a term of 21 years;

(e)

takes effect immediately after the lease was extinguished; and

(f)

does not include any option or agreement which-

(i)

may create a term or an extension to a term which, together with the term of the term of years absolute, would amount to more than 21 years; or

(ii)

may result in the grant of a term of years absolute containing an option or agreement to extend the term.