Lease Extensions and Collective Enfranchisement
The Leasehold & Freehold Reform Act gives leaseholders in certain circumstances the right
to extend their lease and purchase the freehold interests.
Further information:
If you own a leasehold property with less than 100 years left on the current lease you may wish to consider extending it, as an extension of 90 years can be added to the term of the existing lease.
In such circumstances the leaseholder has to pay a premium to the freeholder for the extension of the lease. As the amount of the premium is not an arbitrary sum, this needs to be accurately assessed at the outset.
The leaseholder is also liable for the freeholder’s valuation costs and his solicitor’s fees.
There is a parallel right, under certain circumstances, which enables a percentage of leaseholders in a building to purchase the freehold interest – this is known as Collective Enfranchisement.
As specialists in this field we advise both freeholders and leaseholders on the premiums payable and, if required, can negotiate on their behalf to secure an agreement at a mutually acceptable premium figure.
In a small number of cases it may not be possible to reach agreement with the other party and in such circumstances we represent our client at the First Tier Tribunal where a premium figure will be determined.
Recent changes to the Leasehold & Freehold Reform Act commit to making collective enfranchisement cheaper, however, there is work to be done to make this a reality. Secondary legislation and separate consultations to fill in the gaps and iron out issues is likely to be necessary.
Changes to the process may not therefore be realised until 2025/26, with very little likely to happen for the rest of 2024 given the political landscape. At Bentley Pugh & Associates we can provide you with the advice required to make an informed choice regarding buying or selling a freehold interest or extending a long lease. We will be pleased to answer any questions you may have and provide you with a fee proposal for undertaking the appropriate valuation.
Call us today on 020 8546 7691, or complete the CONTACT FORM and we will get back to you as soon as possible
