Enfranchisement
The term enfranchisement means to collectively buy the freehold interest of the building, of which your flat forms part, with some or all of your co-lessees or to buy the freehold of your house.
Owners of residential flats can, effectively, force their freeholder to sell the freehold provided at least 50% of the tenants participate. This is known as freehold enfranchisement or collective enfranchisement.
However, as you would imagine there are a number of qualifying requirements:
In order to participate in a freehold enfranchisement the tenancies must originally have been over 21 years in length and at least two thirds of the flats must be qualifying tenancies.
Less than 25% of the building can be commercial space.
The building must be self contained and structurally detached.
Freehold enfranchisement is a complex matter and requires careful planning and expert advice… for example; a freehold enfranchisement can be made unsuccessful, or more difficult, by certain factors such as three or more flats being held by one individual or having a resident landlord.
Lease Extension, Notice of Application and Marriage Value
Another thing that comes under enfranchisement is the legislation that allows a long lessee who has owned their flat for two years or more to apply for a lease extension from their freeholder by serving a notice of application.
The leaseholder is entitled to receive an extended term of 90 years over and above the existing term, in addition, the ground rent is reduced to zero.
The premium payable will depend on a number of factors, including the amount of ground rent payable under the existing lease, and where the lease is below 80 years unexpired the "marriage value". This is the term used by the legislation to compensate the freeholder for the loss in value to them by granting the lease extension.
So, if you would like to take advantage of a free initial consultation please contact us now or call David Pearl on 020 8202 6202 |
