Your right to purchase the freehold of your property
You are a leaseholder if you own a long lease (21 years +) on your house or flat. Often a yearly ground rent is payable as well, but not always.
Being a leaseholder comes with certain rights and one is to acquire your landlord's interest in the property i.e. buy your freehold – subject to certain conditions. This process is known as enfranchisement.
Marsden Rawsthorn can assist you at all stages of the process, irrespective of your location, with the creation of a nominee purchaser, registration of rights against the Landlord’s title and assignment of the rights of a lease extension to a purchaser of the leasehold interest.
Buying the freehold of your property has a number of advantages including:
Avoiding the need to request (and pay) for consent.
Gaining control over the management of your building by the leaseholders which may result in a reduction in running costs.
Making it more convenient for the leaseholders to grant themselves new leases to satisfy the Council of Mortgage Lenders.
The advantage that the leaseholders may cease to pay ground rent.
The valuation of the flats may increase dependent on your actions following collective enfranchisement. This will in turn increase their marketability.
Collective Enfranchisement – Purchase the freehold of your flat or apartment
Under the Leasehold Reform, Housing and Urban Development Act 1993 residential tenants of certain long leases of flats may have a right to acquire the freehold interest in the building on a collective basis. The right to acquire the freehold interest is for residential tenants of long leases (over 21 years) and extends to any common areas which the tenants have the right to use. The purchase should be made by a nominee purchaser.
There are a number of conditions which must be satisfied in order for tenants to qualify for the right to collective enfranchisement. We can provide advice as to whether or not these conditions have been satisfied.
Under the same legislation, individual leaseholders of a flat may be entitled to the grant of a new lease (although this is referred to as lease extension). This right is often exercised if the conditions for collective enfranchisement are not met. The new lease granted will be for a term equal to the unexpired residue of the existing lease plus 90 years. For example if you have 45 years left to run on your existing lease the new lease will be for a term of 135 years.
A premium will be payable for the lease extension. Please note that in order to be entitled to a lease extension the tenant must have owned the lease for at least two years prior to service of the notice.
A lease extension has some of the same advantages as collective enfranchisement. Additionally, once a notice has been served requesting a lease extension the tenant can sell the flat with the benefit of the right to the lease extension thereby increasing the flats marketability.
Houses - take the opportunity to own the ground under your feet!
Under the Leasehold Reform Act 1967, qualifying tenants of houses under long leases also have the rights to acquire the freehold (subject of course to a purchase price) and to the grant of a new lease. However, this will be for the remainder of the existing term plus a further 50 years. In this instance no premium is payable but the lease can contain a modern ground rent subject to review.
What Marsden Rawsthorn can do for you:
As part of our Enfranchisement service we provide the following:
Checking that all conditions have been met
Organsing the formation of the nominee company if required
Obtaining a valuation
Serving the necessary notices on the Freeholder
Dealing with all negotiations
Making applications (if necessary) to the Leasehold Valuations Tribunal (LVT) and representing you at the LVT
Finalising the completion of the lease/acquisition of the freehold
Dealing with all post-completion matters.
Marsden Rawsthorn can assist you at all stages of the process, irrespective of your location, with the creation of a nominee purchaser, registration of rights against the Landlord’s title and assigning the rights of a lease extension to a purchaser of the leasehold interest.
We provide a comprehensive service, acting not just as conveyancers, Marsden Rawsthorn offers a complete service, with extensive experience in dispute resolution.
Recommended by the Leasehold Advisory Service, our dispute and conveyancing advisors work together to resolve any issues in a professional and cost effective manner.
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