Collective Enfranchisement

Under the Leasehold Reform, Housing and Urban Development Act 1993, a group of leaseholders can compel the Landlord to sell the freehold of the building they live in as well as the surrounding areas (known as appurtenant parts).

They can do this provided the building, and the leaseholders meet the qualifying criteria. In essence, provided that no more than 25 percent of the building is non-residential (common parts excluded), that at least two-thirds are let on long residential leases, and that at least 50 percent of the qualifying tenants come together to take part in this process, then there is a strong likelihood that they would qualify.

Doing so is advantageous for leaseholders for the following reasons:

As the new Landlord, a leaseholder (with your fellow participants) would have the power to change their leases. This may be to correct things which the landlord was unwilling to do previously, or in many cases, this will be to grant each participating leaseholder a 999-year lease at nil premium.
They would usually be able to take over the management of your building by doing this (provided there is no third party management company expressed in the lease).
Selling your flat with “share of freehold” has a beneficial impact on its marketability.
There could be development potential that you may wish to effect that the previous landlord was unwilling to do.

In a nutshell, the typical process involves the leaseholders conducting a survey, serving notice on the landlord. The landlord does the same in response. Negotiations over the price to be paid and the terms, followed by the drawing up of the lease and completion follow on from this.

The area is fraught with pitfalls, and strategic interplay is often required to tackle the statutory mechanisms. While the leaseholders will be seeking to acquire what they want at the cheapest price, the landlord will have the opposite motivations.

We provide answers to commonly asked questions by Landlord and Tenants under the following links.

Our property law team has enormous experience in the area of collective enfranchisement, and have been advising clients in London and the South East for many years.

To talk to us further, please phone our office on 020 8290 0333 to make an appointment.