Leasehold enfranchisement

Recent changes in the law have given leasehold property owners the right to extend their leases for an additional 90 years or club together with other lessees to buy the freehold of their properties. Nevertheless, the uptake of the latter has been less enthusiastic than the government might have liked, in part because some of the detail makes the process more difficult than it might initially seem.

Extending a lease

Extending a lease is relatively straightforward. You can ask the landlord for an extension at anytime after the purchases of the property and once you have owned the property for at least two years, he or she has no right to refuse provided that there is still 21 years or more left on the lease. More tricky is agreeing on a valuation for the extension. If you are unable to agree a realistic figure with your freeholder, this will require the services of specialist valuer and solicitor.

Getting other leaseholders together

An alternative to re-negotiating your individual lease is band together with other leaseholders in your house or block to buy the freehold of the property. If 50% of the leaseholders agree to buy the collectively buy the freehold and the building meets certain other conditions, then the landlord cannot refuse to sell it.

Different legal options for leaseholders

There are then two ways for the former leaseholders to own the property – either traditional freehold (usually by creating a residents' company to own and manage the freehold) or 'commonhold', a new form of legal ownership introduced in 2005 in which each flat owner has the 'freehold' of his or her own flat and the common parts of the building are owned and managed by a limited company, known as the commonhold association (CA). However, converting from a leasehold block to one owned by commonhold requires the participation of all the leaseholders and for this reason, take-up of Commonhold Status has been slow.

Taking over the management

A third option for leaseholders unhappy with the service provided by their landlords is to take over the management of their building, under "Right to Manage" (RTM) rules in which leaseholders can take decisions about the upkeep and management of their flats, without having to buy the property's freehold. There is no requirement to prove wrongdoing by your landlord or pay compensation and it means that the leaseholders can have more control over the level of service charges setcan appoint their own of managing agents and select their insurers. As with buying the freehold, all leaseholders must have at 21 years remaining on their leases and at least half of the leaseholders in a building must agree.

Find a lawyer >>

Use our free and confidential Matching Service to compare law firms and prices