What are your tenants entitled to claim?
By purchasing your freehold or leasehold interest, your tenants will benefit from all the rights of an owner. Following completion they may:
- Grant themselves 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 the block.
Provided the tenants are entitled to claim, the right to enfranchise is absolute.
The right to enfranchise is not seen as a penalty against you as the landlord and your tenants will therefore have to pay your reasonable legal and valuation costs in connection with their claim (subject to limitations on recovery) together with a premium by way of consideration for your freehold or leasehold interest.
Further questions? View our FAQ's.
What are your options if you have received this notice?
We would always recommend that you serve a counter notice prepared by Tolhurst Fisher LLP. This is a notice served on your behalf in response to the notice served by your tenants. You have five possible options when serving the counter notice:
- Admit your tenants’ right to enfranchise and accept all of their terms and proposals;
- Admit your tenants’ right to enfranchise but dispute some of their terms and proposals (most often the premium) and suggest your own instead;
- Admit that your tenants have the right to enfranchise but claim that their Initial Notice was invalid on certain grounds where available;
- Deny that your tenants have the right to enfranchise and give reasons for this denial;
- Neither admit nor deny your tenants’ right to enfranchise but instead claim the right of redevelopment (NB: this must be a genuine claim and not merely a tool to allow landlords to refuse to grant lease extensions).
When serving a counter notice, you may also have the right to require leasebacks of and do not have long leases granted to them.