G.M. Hewett Legal Services:

Leasehold Enfranchisment

Leasehold Enfranchisement can allow a *tenant of a residential long leasehold flat (for example a lease for a term in excess of 21 years*) in a block of flats who joins together with at least *50% of the tenants from the same block the right to buy the freehold of the block of flats from their *landlord but only in certain circumstances. The right is given by the Leasehold Reform, Housing and Urban Development Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002).

The Act requires amongst other things that at least 2/3rds of the flats in the block are let on long leases, and no more than 25% of the internal floor area of the block (excluding the common parts) is in non-residential use.

Various buildings are excluded from the right and in certain circumstances if the landlord or an adult member of his family live in a converted block of flats the right is excluded.

A shorter lease which contains a clause providing a right of perpetual renewal is included in the Act.

Where there are only two flats in the building both leaseholders must participate. There must be a minimum of two flats in the building

If the landlord is a charitable housing trust and the flat is provided as part of the charity’s functions the building is excluded from the Act.

Where a leaseholder owns multiple flats in the building that leaseholder might be excluded.

Note: there are certain specific exceptions to the information provided. For further information please contact this firm.

By purchasing the freehold the tenants would be able to have their leases extended without paying a premium.

Owning a share of the freehold usually makes a flat more attractive to potential buyers and mortgage lenders.

If there are more than 4 tenants who intend to purchase the freehold a company should be set up to purchase the freehold. G M Hewett Solicitors can assist you in setting up a limited company and advise you on the limited company’s obligations.

The landlord should be offered a realistic price for the freehold it is therefore best to instruct a surveyor who if familiar with the statutory formula of calculation under the Act.

G M Hewett Solicitors can put you in contact with surveyors who are experienced in this field.

The tenants will have to pay the landlord’s legal costs, valuation costs and disbursements incurred by the sale of the freehold to the tenants.

Other disbursements include Stamp Duty Land Tax if applicable and Land Registry fees. This firm’s legal costs will depend upon the size of the block and the complexity of the transaction. If the landlord refuses to participate, or agreement on the sale price cannot be reached, your rights will have to be enforced. This will lead to additional expense.

Set out below are some of the stages that a solicitor deals with:-
Preparing the information for the claim
Setting up the company (if applicable)
Serving the first notice on the landlord
Responding to the landlord's requests for further information
The conveyance of the freehold title
If you would like this firm to act on your behalf, the opportunity would be welcomed. Please telephone this firm and more specific costs will then be discussed with you.

This guide is intended as general information only it does not seek to summarise the relevant legislation which is a complex and technical area of law. This guide should therefore not be relied upon and you should take specific professional legal advice relating to your personal circumstances.

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