There are two types of leasehold enfranchisement claims, one for flats which is known as collective enfranchisement and another for houses, known as individual enfranchisement.
Collective enfranchisement is the lessees’ collective statutory right to compulsorily purchase the freehold of the building upon paying a market price as compensation to the landlord. The lessees need to meet certain qualifying criteria. The basic test is that the qualifying leaseholders must have a long lease (i.e. not less than 21 years) of a flat and must represent not less than half the flats in the building (which must have not less than two flats). Additionally at least two-thirds of the flats must be leasehold, and not more than 25% of the building must be non-residential. There are also other restrictions for certain types of landlord and for resident landlords.
The process is started by serving a formal notice on the landlord subsequently. A substantial amount of work needs to be carried out before the process is started. We can advise on eligibility and on getting the process started. Before starting the formal process, it is also advisable for lessees to appoint a valuer to advise on price and prepare worst and best case price scenarios at the outset.
The advantage of enfranchisement to lessees is that they will acquire outright ownership of the building and will have a say in the control and management of their block. They can appoint their own managing agents and grant themselves new long leases on favourable terms which can enhance the value of their property.
The lessee of a house also has similar rights and the process is similar. The basic qualifying test is that the lessee must have a long lease of a house (i.e. not less than 21 years) and they must have owned the house for at least two years. However, this can be circumvented on the sale of the property as it is a right that can be passed on by a seller to a buyer. Again the lessee will need to instruct a valuer at an early stage to advise on the best and worst case outcomes. The advantage is that the lessee will acquire outright ownership of the building and more control over his property.
We have extensive experience and expertise in this field. We also have a large property department to help prepare the documentation. We have an excellent relationship with firms of leading surveyors and Counsels who specialise in this area. We are conveniently situated close to Chancery Lane in Central London, close to the appropriate Courts, Counsel’s chambers and specialist property tribunals.
Contact our leasehold enfranchisement team today for advice on your leasehold enfranchisement claim. Our team can work closely with our conveyancing solicitors to ensure a smooth transaction.
Worried about the length of your lease? Want to increase the value of your flat? Want to sell or buy a flat but the lease term is short?
SELLING YOUR FLAT?
Did you know that you could extend your lease by 90 years and pay a zero ground rent? Did you know that you could pass your right to extend your lease to your buyer?
BUYING A FLAT WITH A SHORT LEASE?
Did you know you could still extend it by taking over the seller’s right to a new lease?
WHY SHOULD I EXTEND MY LEASE?
- You can add 90 years to your lease and pay zero ground rent which can increase significantly the value of your flat.
DO I QUALIFY?
- You have to have a long lease (over 21 years from when it was granted).
- You have to have owned your flat for at least two years.
WHAT IS THE PROCESS?
- You have to serve notice on your landlord to let him know the price you propose to pay.
- You will need a valuer (a qualified surveyor) to advise you on the price and a solicitor to advise you on the process and deal with the documentation.
HOW MUCH WILL IT COST?
- The price you pay to your landlord depends mainly on the value of your flat and the length of the lease.
- The price is usually negotiated. If agreement cannot be reached then it is decided by a specialist tribunal.
- The landlord can ask you for 10% deposit.
- You will have to pay your landlord’s legal and surveying costs, plus your own costs.
WHEN SHOULD I DO IT?
- Any time, but ideally before there is less than 80 years left on your lease as the price increases significantly when the lease falls below 80 years.
- If there is already less than 80 years on your lease, then you should consider extending as soon as possible as the longer you leave it, the more you will have to pay.
WHAT IF I WANT TO SELL MY FLAT BEFORE EXTENDING MY LEASE?
- Do not worry, you can pass on the right to extend your lease to your buyer.
WHAT IF I WANT TO BUY A FLAT BUT I AM WORRIED ABOUT THE SHORT LEASE?
- Your seller can pass on to you their right to extend the lease and you can take over the process on completion.
AS A POTENTIAL BUYER, WHY EXTEND?
- Extending your lease may help you obtain a mortgage.
- Extend your lease will increase the value of your property.
WHY SHOULD I USE HEALYS?
- We have extensive experience with a specialist team.
- We can offer fixed and competitive fees with no hidden charges.
- We provide regular updates.
- We provide direct access to your solicitor.
WHAT CAN HEALYS DO FOR ME
- Advise on eligibility and getting started.
- Help with valuation and negotiations.
- One stop shop for preparation of documents.
- Advise on disputes.