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Enfranchisement And Lease Extension

Introduction

The valuation of premium for buying the freehold or enfranchisement of houses is extremely specialised, as is the negotiation of the matters relating to the Leasehold Reform Act 1967.

A house can be many things – a house, a shop with flat, a pub with flat, offices with flat or even a block of flats.

Even though the legislation in its basic form has been around since 1967 there are still significant cases relating to what constitutes a house.

The basis definition is contained in Section 2(1) of the Leasehold Reform Act 1967:

“For purposes of this Part of the Act, ‘house’ includes any building designed or adapted for living in reasonably so called, notwithstanding that the building is not structurally detached, or was not or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; …”

Recent cases on what constitutes a house include Malekshad v Howard de Walden Ltd and Boss Holdings Ltd v Grosvenor Wes End Properties Ltd.

The Law

The Leasehold Reform Act 1967 as amended by the Commonhold and Leasehold Reform Act 2002 enables tenants of houses on long leases to enfranchise (acquire the freehold of) their properties.

If you own leasehold property

If you have a leasehold flat or house, using the above legislation you may have the right to increase the value of your property, including:

Leasehold Enfranchisement, Lease Extension and Right to Manage Company cases involve complicated procedures and regulations and we strongly advise that you get expert advice – you can rely on our solicitors for the right specialist advice as we have acted for landlords and tenants in thousands of Collective Enfranchisement and Lease Extension cases. If you are considering either collective Enfranchisement or Leasehold Extension, contact our lawyers first -- we can put you in touch with surveyors nationwide who specialize in valuing Leasehold Extensions and Collective Enfranchisement.

Do I Qualify?

There are three issues that need to be addressed:

Does the building qualify?

Does the lease qualify?

Does the tenant qualify?

In order for the building to qualify, it must be a ‘house’. But, there must be no material over or under-hang with an adjoining building (if there is, then it is likely to be a flat).

The lease must comprise the whole of the “house” and it must be a long tenancy, i.e., a lease with an original term of more than 21 years. However, if it is a business tenancy, then it will not qualify if it is for an original term of 35 years or less.

The tenant must have owned the lease of the house for a period of at least two years before the date of the claim.

Prior to the 2002 Act, it was also necessary for the tenant to occupy the house as his only or main residence for a three year period. The residence test has now been abolished save in limited circumstances.

If a house is mixed use so that there is a business tenancy (for example a building comprising a shop with a flat above) or if the house includes a flat which is subject to a qualifying lease under the 1993 Act then the tenant is still required to fulfil a residence test.

The residence test is that the tenant has to occupy the house as his only or main residence for two years or periods amounting to two years in the preceding ten years.

Blakewells are expert Leasehold Enfranchisement and Lease Extension Solicitors and can advise you wherever you reside.

Contact our Leasehold Enfranchisement Solicitors for further information.

Contact us today and we will answer any questions you have.