What Is Leasehold Enfranchisement?

By Author: Grant Saw Solicitors LLP
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Leasehold enfranchisement is a technical term given to a process where a tenant can buy their freehold or acquire a new lease from the landlord.

If you are buying your freehold, this is known as collective enfranchisement. The Leasehold Reform Housing and Urban Development Act gives the tenant the right to purchase the freehold of their building. This is often subject to certain exclusions. Tenants can exercise their rights as long as fifty percent of the tenants in the building wish to proceed.

As a tenant, you may have the right to a new lease, also known as a lease extension. This allows tenants to secure a lease extension of ninety years over and above the remaining length of the lease. Again this is subject to exclusions and tenants can only exercise the right if they have owned their flat for a minimum of two years.
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The Leasehold Reform Act of 1967 gives the owners of leasehold property the right to purchase the freehold of their house. The exclusions are that the leasehold houses can exercise their right if they have owned the house for a minimum of two years.

If you are buying a property ...
... that is leasehold, there is additional legal work for your conveyancing solicitor. A leasehold conveyancer is a legal process when you buy or sell a leasehold property. All properties are either freehold or leasehold. Freehold is when you own the building and the land it stands on. A leasehold is when you have a lease from the freeholder to use the property for a certain period. When you buy a leasehold property, you are buying the benefit of a lease contract rather than ownership of the property. Leases are normally between ninety and ninety-nine years.

When it comes to buying a leasehold property, the solicitor is going to have to go through the lease and terms, along with any legal work involved in the purchase. They will deal with the management company and/or landlord, along with the vendor's solicitor. This is a longer process than purchasing a freehold property.

If you are unsure if the property you are considering is a leasehold, you will find if it is an apartment or flat, it has a higher chance of being a leasehold. It is more unusual for houses to be leasehold, though some of the older terraced houses are leasehold, along with some new builds.

The property particulars provided by the estate agent should confirm if the property is freehold or leasehold. Always ensure that the solicitor confirms this early in the purchasing stage.

The UK Government has announced plans to make leasehold systems fair for leaseholders, including the ban on the sale of leasehold houses. This law has not yet been passed, but many developers have stopped the sale of leasehold houses. Before you commit to a purchase, ensure you know what you are buying.

Once your solicitor receives the offer to purchase or memorandum of sale from the estate agent, they will ask for a copy of the lease. This is the contract between the leaseholder and the freeholder, known as the landlord.

The lease is what gives you the right to occupy the property for a period, subject to the terms in the lease. Your leasehold enfranchisement solicitor needs to get a copy of the lease and ensure that they provide you with the obligations and rights you have under the lease.

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Grant Saw Solicitors LLP is a London-based legal practice that caters to private and business clients. The firm has been operating since 1851 offering legal excellence and a modern and friendly approach. They are recognised for their excellence with numerous accreditations. Being members of LawNet, they share ideas and resources. Grant Saw Solicitors LLP are based in Blackheath and Greenwich, both offering disabled access. Their extensive range of legal services ranges from tenant and landlord disputes to residential property transfer, commercial property, insolvency, employment, and dispute resolution. Full details can be found at https://grantsaw.com.