Specialist Lease Extension and Leasehold Enfranchisement Lawyers
The Leasehold Reform, Housing and Urban Development Act 1993 gave leasehold
owners of flats two important new rights. The first allows a majority of tenants to join together to buy the freehold, exercising the right to collective enfranchisement. The second allows an individual tenant the right to a new lease, for a term 90 years longer than the existing one at a peppercorn rent. In order to decide which route to follow a tenant will first have to assess whether they qualify for a collective claim and, if a collective claim is a possibility, will then need to decide whether the advantages of purchasing your freehold outweigh the benefits of a 90 year leasehold extension.
Looking for Specialist Lease Extension or Leasehold Enfranchisement Lawyers? Call us on FREEPHONE 0800 1404544 for FREE Initial Phone Advice
Leasehold Reform update
The Leasehold and Freehold Reform Act 2024 contained substantial reforms to both collective enfranchisement and lease extension. But none of those changes actually come into effect until the Act is implemented which may not happen until 2026.
There is just one exception – the abolition on January 31, 2025, of the two-year ownership rule, under which leaseholders had to wait for 2 years after buying the property before using the statutory route to extend their lease.
Tenants who are faced with the question of whether to enfranchise or seek a lease extension need to consider what their main objectives are. If they are suffering from bad management, unsubstantiated service charges and their leases are significantly longer than the statutory limit of 80 years then a collective Leasehold Enfranchisement claim will be of most benefit provided that they have an organised residents association.
On the other hand, if the leases are short or are about to reach the 80 year limit and they reside in a well managed block with numerous non-resident tenants a lease extension may be the better solution. In addition, with a collective claim, time can be an issue. If there are a significant number of tenants, it can take weeks or even months for them all to agree and sign up to the necessary documentation and to pay towards a fighting fund. In contrast, a single lease extension claim can sometimes be signed within a few days of a valuation being obtained – if your freeholder is cooperative.
Leasehold enfranchisement following lease extension
It is also important to remember that these 2 options are not mutually exclusive.
It is possible for a tenant to extend a lease one year and then enter into a collective claim a few years later. The tenant’s extended lease will only serve to reduce the premium payable for the freehold.
Finally, tenants should also be aware that if the cost of the freehold is a problem it is possible to opt for forming a Right to Manage Company as a low cost solution to gaining control over the way that a building is run. And exercising your right to manage can be carried out alongside a lease extension.
Looking for specialist Leasehold Enfranchisement Lawyers? Contact us today
Wherever you live in the UK, for a FREE initial telephone consultation on your Freehold Enfranchisement or extending a lease,either
- Call us now on 0800 1404544, or
- Send us an email using the enquiry form below.
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