What is Leasehold Enfranchisement and what are the benefits?
When purchasing a property there are two main types of legal ownership. These are either freehold or leasehold. Unlike freehold, which is the outright ownership of the property, including the land it is built on with no time limit to the ownership, as a leaseholder, you are the owner of the property for a fixed term (as set out in the lease) but not the land on which it stands on. Once a lease expires, ownership of the property reverts back to the freeholder, unless you can agree to extend the lease.
Leasehold enfranchisement is the process you go through to either extend your lease or purchase a share of the freehold (collective enfranchisement).
What are the benefits of Leasehold Enfranchisement?
· Your asset stops deteriorating. A property with a lease is a diminishing asset. As your term of your lease gets shorter, its value will decrease. You can protect, and often increase, the value of your property by either buying or extending the freehold.
· Remortgaging may become easier as many lenders prefer the additional security of freehold over leasehold properties.
· The cost of extending gets greater as lease gets shorter – this is particularly true if a lease has less than 80 years to run. It is important to start the process as soon as possible to avoid increased complications or disputes.
What should I do if I want to extend or purchase my lease?
This is a complex area of law and there are several processes and obligations you will need to be aware of when looking to extend or purchase your lease. Furthermore, lease extensions under the Leasehold Reform, Housing and Urban Development Act 1993 set a strict timetable to be adhered to by all parties. It is therefore vital to seek advice from a specialist.
Our landlord and tenant team are specialists in leasehold enfranchisement; we have the knowledge and expertise to guide you through all the legal requirements including:
· Determining eligibility
· Guiding you through the complex statutory provisions
· Advising on costs and obligations
· Understanding the two, potentially conflicting, standpoints of landlords and leaseholders
Our experienced team at Rose & Rose solicitors are here to help you. We will work with you to ensure the best possible outcome and will deal with your enfranchisement transaction efficiently and effectively. We will take the time to explain the processes to you in clear language and guide you through the process.
Please contact us on 0208 974 7490 or make an online enquiry to discuss the best way forward for you and we will provide you with further and specific advice tailored to your circumstances.