General Information
The 1993 Leasehold Reform Act (as amended) provides the right
for the leaseholders (via a special Company - the Right to
Enfranchise Company) to compel the Landlord to sell the Freehold
to them. Once the Freehold in the hands of the Lessees they (via
the RTE Company) effectively own, run & have control of the
building themselves.
You should arrange your finances before you commence any
procedures and should be aware that even where you withdraw,
you will still have to pay their own and the landlord's costs
and funds should be established for this purpose. It is
recommended that leaseholders have a formal valuation carried
our so they are aware of what the likely value will be although
this is not a legal requirement.
Once all the appropriate sections of the law are in place, the
right to enfranchise may only be exercised through a specific
`Right to Enfranchise (RTE) Company' which becomes the owner of
the freehold & all qualifying leaseholders are entitled to be
members of the RTE Company & it is those members who run & have
control of the RTE Company, i.e. effectively controlling the
management, running, repairs, maintenance etc. etc. of the
building as a whole. Until the commencement of the relevant
section of the Act the purchase must be carried out through a
Nominee Purchaser who is the person specified in the Initial
Notice to the freeholder who will acquire the freehold and
become the new landlord. This can however presently be either a
lessee, a group of lessees or indeed a management type company
owned by the (or a number of) lessees.
Eligibility - The Building
Must Qualify
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You should check that the building complies and that
there are enough qualifying leaseholders to be able
to proceed. Details about `leaseholder
qualification' are set out below. In order for the
building to qualify it must:
-
Not have more than 25% of the internal floor
area of the property as being non-residential,
and
-
At least two-thirds of the flats must be let to
`qualifying leaseholders'
Basically, the right to purchase the freehold may
only be exercised by a Right to Enfranchise (RTE)
Company; the members of the RTE Company must
comprise enough of the qualifying leaseholders as
own at least half of the total number of flats in
the building. Where there are only two flats in the
building both leaseholders must participate.
The minimum number of leaseholders that are needed
for a successful action must;
-
Not be less than half of the total number of
flats in the building. For example, if there are
14 flats in the building at least 7 of the
qualifying leaseholders must participate.
-
BUT - where there are only two flats in
the building, both leaseholders must
participate.
There is no right of collective enfranchisement
(but there is a right to renew the lease) where:
-
The building is a conversion into four or fewer
flats and not a purpose-built block AND ALSO
-
the same person has owned the freehold since
before the conversion of the building into flats
AND ALSO
-
he or an adult member of his family has lived
there for the past twelve months OR
-
the freehold includes any track of an
operational railway, including a bridge or
tunnel or a retaining wall to a railway track
* For the sake of clarification therefore where a converted
block has four or less flats, the present Landlord
would have to have owned it prior to the building
having been converted and, in addition to which,
he or an adult member of his family must have lived
in one of the flats for at least the last 12 months
in order for the lessees not to have the right to
acquire the Freehold. However, if it is simply a
converted block & the same Landlord has not owned it
prior to the conversion being carried out and in
addition, an adult member of his family has not
lived in one of the flats for the last 12 months
then there is a right for the lessees to
Collectively Enfranchise, subject of course to
any other requirements being met.
Some properties are completely excluded from the
rights of lease extension and collective
enfranchisement such as:
-
buildings within a cathedral precinct
-
National Trust properties
-
Crown properties*
* Although the Crown is not bound by the legislation
the Minister has made a statement to the House of
Commons that the Crown will be prepared to comply
with the principles of it.
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Eligibility - 'Qualifying'
as a Leaseholder
To be a Qualifying leaseholder you must own a ‘long lease’, and
not be a business or commercial tenant. You do not have to
satisfy a 'residency test' nor do you have to have owned the
lease for any minimum period of time. A ‘long lease’, by
definition, is:
-
A lease of a term of years absolute in excess of 21 years
when originally granted – The present unexpired term is
not relevant.
-
A shorter lease which contains a clause providing a right of
perpetual renewal
-
A lease terminable on death or marriage or an unknown date
(including the so-called "Prince of Wales" clauses)
-
A leaseholder having held over at the expiry of a long
lease, and the landlord has not served a notice terminating
the tenancy
-
A shared ownership lease where the leaseholders' share is
100%
Other Important Information
We
naturally are unable to guarantee any application as neither being
successful nor the amount of the eventual premium that may be
determined by the Tribunal. You will be liable for the ‘reasonable’
costs of the Landlord relative to the Notice of Claim & the
preparation / completion of the new lease together of course with
the fees of any valuer, solicitors etc. who you choose to instruct
to assist. Please ensure you carefully read our
Our Charges & Services
The fees** quoted are to be calculated on a ‘per flat’ basis,
being the total number of flats in the building & all are
subject to VAT at the prevailing rate (currently 17.5%).
We would provide, on CD Rom, a copy of the legislation, which
would also have a fully detailed & descriptive manual detailing
in simple easy to understand terms exactly what the process is
from beginning to end. We would request from the Lessees the
basic information needed for us to prepare the necessary
paperwork. In addition to preparation we will also serve ALL
the various Notices required.
We will deal with the formation of the RTE / Management Company
as required (including so far as possible completing
the forms for you) . Our fees** depend upon the number of flats
in the building but range from £185 to £250 per flat. We do not
charge an 'hourly rate' & all fees are clearly specified in
writing, are entirely 'fixed' with no extras or additions in any
way. Please ensure you carefully read our
Terms & Conditions to
which this website & our services are subject
