What do we mean by leasehold enfranchisement?

Following the commencement of the Leasehold Reform, Housing and Urban Development Act 1993, certain leaseholders have the right to group together to purchase the freehold of their block of residential flats. Leasehold enfranchisement (also called collective enfranchisement) is the process by which the leaseholders, usually through a nominee purchaser company, exercise this right. The right is not only enforceable against landlords who have mismanaged their properties. In fact, you do not have to prove mismanagement at all.

Why should you enfranchise?

By purchasing the freehold of your block, you will benefit from all of the rights of an owner. Following completion you may:

• Grant yourselves new leases for terms of 999 years;
• Vary the ground rent to a peppercorn (ie. none at all); and
• Take direct control over the management of your block.

There are pitfalls to be aware of when enfranchising and our expert team can guide you through these potential hazards:

• The participating tenants will be liable to pay a premium to the landlord and any other relevant landlords who have an interest in the property, together with each parties’ legal and valuation costs;
• Upon completion, you will assume responsibility for the management of your block;
• There will be continuing obligations on the officers of the nominee purchaser company, should you elect to proceed with a company.

Further questions? View our FAQ's.

Do you qualify for the right to enfranchise?

You may qualify as a qualifying tenant for the right to enfranchise if you have a long lease, which is:

• A lease with an original term of at least 21 years;
• A lease with a clause providing for the right of perpetual renewal;
• A lease granted under 'right to buy’ or 'right to acquire on rent or mortgage terms'; or
• A shared ownership lease where your share is 100%.

Your block may qualify for the right to enfranchise if:

• It contains at least two flats;
• At least two thirds of those flats are let to qualifying tenants;
• At least 50% of the qualifying tenants must participate;
• The property must be either a detached building or a part of a building that is capable of being cleanly divided from the rest of the building by a vertical line and able to be redeveloped independently;
• No more than 25% of the total floor space may be used for non-residential purposes; and
• Your landlord must not be a charitable housing trust that is letting the flats in connection with its charity functions

This is subject to an investigation as to whether you have the right to enfranchise.