The Lowdown on Leasehold Enfranchisement

Leasehold to freehold is a big move with big potential rewards. It must be done the right way.

The Leasehold Reform Act was passed in 1967. Many people feel it does not go far enough, and there is a considerable groundswell of opinion in favour of further reform. But the point to bear in mind is – as always – that the act we currently have is the act we currently have and the law is the law. Until and unless there are further changes, the 1967 Act defines how enfranchisement is to be managed and who can qualify.

Where a house (the regulations for flats are dealt with separately in the Act) is in the final two years of a long tenancy at a low rent, the tenant has the right either:

• to acquire the freehold on enfranchisement; or
• to obtain an extension of the lease to a new expiry date 50 years after the date on which the existing term expires.

Where the “low rent” condition does not apply, there is an additional right to enfranchisement. A “long tenancy” is one for which the original term was more than 21 years. And, to quote the gloss on the Act published by the government, “there are further conditions and exceptions that apply in  particular circumstances.” There are also circumstances in which, for long leases granted on or after 7th September 2009, the right to enfranchise is not affected by whether or not the rent is considered to be low, but the right to extend the lease is affected.

It will be evident from that small introduction that enfranchisement is not a straightforward matter and needs the attention of a professional in the field. It can confuse tenants and landlords. We have even known it confuse lawyers, though – strange as it may seem – it never seems to confuse them enough that they fail to send their account for payment.

The place to start is with advice from someone with enough knowledge of the technicalities surrounding the process to be able to interpret the documentation and advise you of your legal rights and of the best way to proceed. Deciding on what that best way may be means more than understanding the law; it means being able to calculate what the costs will be.

Best Gapp specialises in bringing together the right occupant or the right investor with the right property. We have been advising clients, both landlords and tenants in respect of both single homes and blocks of flats, on how best to pick a way through this minefield for a long time. You’ll find more about our leasehold enfranchisement service here. If you’re ready to clarify your position and evaluate the options, whether in relation to an individual leasehold house or as a joint venture with other leasehold tenants in a block of flats, get in touch.