The area of law around leasehold enfranchisement and lease extensions is complex with a very strict process to follow, and legal advice should be sought at an early stage. Each case is different, requires careful analysis and turns on its own facts. Our property solicitors act for both landlords and tenants and can advise you on the process, assist you with informal negotiations and also the formal notice procedure. Our expertise is recognised by our membership of the ALEP (Association of Leasehold Enfranchisement Practitioners).
Collective enfranchisement is when tenants of leasehold flats come together to collectively buy the freehold of their building, usually through a nominee company. Our collective enfranchisement solicitors can advise whether you have the requisite qualifying criteria for the process of collective enfranchisement and guide you through the process step-by-step.
A lease extension is where you extend the term of your residential lease either through terms agreed with the landlord informally or through terms which are agreed formally, utilising the statutory rights available to tenants.
Right to manage allows leaseholders to take control of the management of their block without the requirement to pay a premium, and this is an underutilised route. We look to make leaseholders aware that this may allow them to take control without having to pay the premium that enfranchisement requires.
Our property solicitors have a high level of expertise in working with surveyors who specialise in lease extension and leasehold enfranchisement to ensure leaseholders and landlords alike are armed with all the necessary information in this complex area. Our property solicitors act for both landlords and tenants and can advise you on the process, assist you with informal negotiations, and the formal notice procedures.
Contact Frances Watts, Head of our Commercial Property Team, to see how we can help with your leasehold needs on f.watts@thpsolicitors.co.uk or T: 0118 9209 499.
The term of your lease decreases each year, and many mortgage lenders require at least 65 years left before they will lend on it. If you intend to sell your property, it may be harder to sell if you have less than 70 years to run. To extend your lease you can approach your landlord directly, or in some instances, flat owners have a legal right to an extension of their lease.
As a leaseholder you may be entitled to a lease extension of 90 years from the expiry of your current term if you can establish that you are a qualifying tenant. Most residential blocks of flats qualify but there are restrictions on certain types of property, for example mixed commercial and residential buildings. If you are a qualifying tenant, you can either enter into informal negotiations with your landlord or serve a notice upon them to confirm the premium you are willing to pay for the lease extension.
From 31 January 2025, the Government abolished the contentious rule that owners of residential leasehold properties have to wait two years before they qualify to extend the length of their lease or purchase the freehold through enfranchisement.
The change, has given leaseholders an earlier opportunity to apply to extend their lease terms to enable them to proceed with sales, re-mortgage or ensure their lease doesn’t become ‘short’, which is often recognised as a term of less than 80 years.
If you are eligible for a lease extension, you can enforce your legal right by serving a notice on your landlord to confirm the terms of your proposed lease extension. Your landlord is entitled to an open market premium for the lease extension, and you should instruct a suitably qualified surveyor to carry out a valuation in accordance with the statutory formula. It may be prudent to informally approach your landlord to enquire upon the terms on which they would be prepared to offer you a lease extension before a notice is served.
If your informal negotiations with your landlord are not successful, a notice can be served upon your landlord to confirm the premium you are willing to pay. Once your landlord has received a notice, they must respond within two months in one of the following ways:
If your landlord fails to respond to your notice, you can make an application to the Leasehold Valuation Tribunal, which can make an order requiring the landlord to grant the lease on the terms which were proposed in your notice. If you fail to reach agreement with your landlord following receipt of their counter notice, you have up to 6 months to apply to the Leasehold Valuation Tribunal.
Tenants of leasehold flats may have the right to come together to collectively buy the freehold of their building, usually through a nominee company. This is called collective enfranchisement. There are lots of variable when it comes to collective enfranchisement including whether there is a commercial element to the building, the number of flats in the block, the number of flat owners who qualify, and of those, how many choose to participate. Our collective enfranchisement solicitors can advise whether you have the requisite qualifying criteria for the process of collective enfranchisement and guide you through the process step-by-step.
Although exact dates have not yet been set, we expect to see implementation of the Right to Manage reforms in the Leasehold and Freehold Reform Act 2024 which would expand access, reform costs and voting rights, and provisions on service charges and landlords’ costs of service charge proceedings; consultations on capitalisation rate and deferment rate, the forthcoming ban on banning leasehold flats, buildings insurance commissions, estate charges, the regulation of managing agents and private estate management arrangements.
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