Lease Enfranchisement
The 1993 Leasehold Reform Housing and Urban Development Act (as amended) gives a flat owner the right to buy the freehold interest so long as the building qualifies and at least 50% of the flat owners are participating. The building must contain two or more flats, no more than 25% commercial floor area and have the ability to be redeveloped.
The Act lays down a procedure summarised as follows:
i) the flat owner serves an initial notice on the landlord stating what the building is, the number of flat owners participating and the price – which has to be reasonable
ii) within two months the landlord is required to serve a counter notice acknowledging the flat owner’s right to enfranchise
iii) if there is a dispute over the price, the flat owner then has six months within which they can apply to the Leasehold Valuation Tribunal (LVT) who will determine the price to be paid
iv) once the price has been agreed, the freehold interest is transferred from the landlord to a company set up by the flat owners. This is dealt with by the solicitors
Within the six months mentioned in (iii) above the first two months are set aside as a cooling off period designed to get the valuers for both parties together to see if an agreement on price can be reached. 90% of the time a compromise is reached.
Once the freehold interest has been transferred the flat owners will have control over the building or employ a managing agent to look after the management of the building for them.
All participating flat owners will be given one share in the freehold company and when their flat is sold, the share in the company is sold with it.
The flats will increase in value and be more saleable as you cannot better a share of the freehold.
SMR has the expertise to act on your behalf in negotiating lease enfranchisemet and to ensure that the timescales are met