Do you know your leasehold enfranchisement rights?

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Key things for leaseholders

Most leasehold tenants of houses have the right to buy the freehold or extend their leases

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Leaseholders have the legal right to extend the lease of a flat

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Leaseholders can act together to buy the freehold of the building; this is known as collective enfranchisement

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At its simplest, leasehold enfranchisement is the process by which owners of a leasehold property can, in certain circumstances, buy the freehold of their building or acquire a new lease or extension from the freehold owner.

Approximately one million houses and two million flats in the UK are owned on a leasehold, rather than freehold basis. As developers continue to build up rather than out to meet housing demands, it’s safe to say that the number of leaseholds sold throughout the UK will continue to steadily increase in the coming years.

If you currently own or are looking to purchase a leasehold property, read on to find out more about the lease extension and leasehold enfranchisement rights that could end up saving you thousands of pounds.

Leasehold enfranchisement

The Leasehold Reform Housing and Urban Development Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002) gives tenants the right to ‘upon qualification to compel the sale of the freehold of the building or part of the building’.

In other words, if you live in a leasehold property, you may have right to jointly purchase the freehold for your building with several flat owners within the block.

To qualify for leasehold enfranchisement, there must be at least two flats in your building and at least two-thirds of the flats must be let to qualifying tenants who have:

  • a lease of a term of years in excess of 21 years (qualification is governed by the original term of the lease when first granted);
  • a shorter lease which contains a clause providing a right of perpetual renewal;
  • a lease terminable on death or marriage or an unknown date (including the so-called ‘Prince of Wales’ clauses);
  • the continuation of a long lease under the Local Government Housing Act 1989 following the expiry of the original term;
  • a shared ownership lease where the tenant’s share is 100%;
  • A lease granted under the ‘right to buy’ or ‘right to acquire on rent to mortgage terms’.

Other criteria apply to successful leasehold enfranchisement, which is why it’s so important for leaseholders and their freehold landlords to get expert advice from surveyors and solicitors specialising in this complex area of legislation. This field of valuation work is heavily legislated and is difficult and complex to operate; we can guide you through this maze.

Supporting solicitors and estate agents

At Kempton Carr Croft, we work closely with solicitors and estate agency firms to provide their clients – both freeholders and leaseholders – with leasehold enfranchisement and leasehold extension services. Unfortunately, many leases are poorly drafted which can leave leaseholders uncertain about their rights and result in landlords needing expert advice on correct procedures, prices and costs.

Our expert surveyors are members of ALEP, the association of leasehold enfranchisement practitioners. This means we have an excellent understanding of legislation in this area means that we are adept at deciphering leasehold contracts, from the expertly written to poorly drafted (and everything in between).

We often find that, having conducted a leasehold extension for one of their neighbours, other flat owners in a residential block come to us with similar concerns about their leasehold. Alternatively, we represent freeholders in conducting leasehold extensions.

If you live in a leasehold property or are a solicitor advising clients on this topic, please contact us to discuss arranging a leasehold extension.

If you are the freeholder or represent a solicitor’s firm, we can provide leasehold-related services to your clients; please do not hesitate to get in touch.