Depending on their circumstances leaseholders in the UK have the right to extend the period of their lease or purchase the freehold.
The two alternatives are called lease extension and leasehold enfranchisement. While these rights are enshrined in law they do involve negotiation with the freeholder and it is advisable that the process is undertaken by specialists in the legal profession such as lease extension solicitors.
The householders’ right to purchase the freehold of their properties is spelt out in the Leaseholders Reform Act 1967. For flat owners the situation is somewhat different. Under the Leaseholder Reform, Housing Development Act 1993 and the amendments contained in the Commonhold and Leasehold Reform Act 2002 majority of the qualifying tenants must be in favour of the leasehold enfranchisement bid. So this will mean the neighbours within the block having to co-operate with one another. Qualifying tenants are those with leases of 21 years or more or those with shared lease ownership of 100 per cent.
An option which is also favoured by flat owners is lease extension in which the existing lease is extended to 90 years. In order to qualify for an extension the leaseholder needs to have owned – not necessarily lived in the flat – for at least two years.
Both leasehold extension and leasehold enfranchisement offer many advantages. Leasehold enfranchisement gives residents far more control over their properties. Those gaining the freehold of their flats will no longer have to pay service charges. They will also have management control of the block and be able to make decisions which best suit the residents rather than the previous freeholder.
For those deciding to go for a lease extension the new longer lease will enhance the value of their flats.
While there are differences between extending the lease and leasehold enfranchisement there are certain things in common. Both are of benefit to the leaseholder. They also include potentially difficult negotiations with the freeholder and a valuation of the property in question. This is where the participation of people such as lease extension solicitors can be so important.
The negotiations can be time consuming especially if there are contentious issues between the leaseholders and freeholders. A specialist lease extension or enfranchisement solicitor can help bridge the differences, ensuring completion is achieved in as short a time as possible.
The solicitor will also be able to aid the leaseholders by arranging a valuation, which may well speed up the process.