If you are a leaseholder (tenant) of a residential property or building containing two or more flats, enfranchisement and collective enfranchisement are legal rights awarded to you under Landlord and Tenant Law. Enfranchisement allows leaseholders to buy the freehold of their residential rental property or to extend their lease for a significant amount of time (for example, enough to cover a lifetime). In comparison, collective enfranchisement refers to the purchase of the freehold of a building containing multiple flats/apartments. This article looks at the different types of enfranchisement and how the process works.
What is enfranchisement?
Enfranchisement refers to a transaction in which a leaseholder purchases or extends their lease to the freehold of their house. This is a legal right provided to leaseholders under the Leasehold Reform Act 1967 as amended by the Commonhold and Leasehold Reform Act 2002.
How do you qualify for enfranchisement?
To qualify for enfranchisement to acquire the freehold of a house or to extend the lease, both the leaseholder and the property will need to meet a variety of qualification criteria set out in the statute under which the application is made. If you are a leaseholder, you will qualify for enfranchisement if you have a long lease with the original term of at least 21 years or with a right to renewal. However, you must have held the lease for the last two years. If you die, your personal representatives can serve a notice to buy it within two years of the grant of probate or from obtaining a letter of administration.
What types of property qualify for enfranchisement?
For the property to qualify, the house must be a building which is reasonably considered a house, divided vertically from any adjoining house. It does not matter if the building has been divided into flats as long as you have the lease of the whole house.
Certain buildings which contain commercial premises can qualify as a house within this definition. For example, the lease of a building which is a shop with a flat above, may qualify for enfranchisement.
How do you apply for enfranchisement to acquire the freehold of a house?
You can start the process of applying for enfranchisement by serving a “Tenants Notice” on the freeholder or intermediate freehold landlord, should there be one in place. The service of this notice creates a contract between both sides to grant and accept the freehold transfer. Your landlord then has two months to formally respond with counter-terms, or they will be bound by the terms proposed by you, the tenant. The procedure for buying the freehold is set out in the 1967 act and in the Enfranchisement Regulations (the regulations).
In most cases, a landlord cannot refuse an enfranchisement claim. However, the process involves complex legal procedures, and the correct notice needs to be served to the landlord. It is vital that you use a specialist solicitor and surveyor to ensure the process is completed correctly.
What is collective enfranchisement?
Collective enfranchisement refers to the purchase of the freehold of a building containing multiple flats/apartments. It is the right outlined in the Leasehold Reform Housing & Urban Development Act 1993, for leaseholders of a building or part of a building that contains flats to collectively buy the freehold of that property.
Read our previous article on Collective Enfranchisement FAQs
This is a very complex area of the law and requires expert advice. Our expert property team has in-depth knowledge of purchasing freeholds and can offer legal advice and guidance on all Enfranchisement matters and other leasehold enfranchisement rights such as collective enfranchisement.
Please get in touch with one of our specialist solicitors below to discuss the best way forward for you. We will provide you with further and specific advice tailored to your circumstances.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors