Leasehold enfranchisement is the collective term for the process of democratising what is effectively a thousand-year-old feudal system. Successive governments have implemented legislation including:
- The 1967 Leasehold Reform Act;
- The 1987 Landlord and Tenant Act;
- The 1993 Leasehold Reform, Housing and Urban Development Act;
- The 2002 Commonhold and Leasehold Reform Act; and, most recently
- The Leasehold Reform Act (Amendment) 2014.
These have made it progressively easier for leaseholders to buy out the freeholders collectively (whereby each leaseholder has a lease and also owns a share of the freehold), extend their leases or replace the managing agents, among other things.
The lease is a document that governs this relationship. For most leaseholders this is a rather impenetrable and complex document that they never read. We encourage every owner to make sure they DO read this and understand the various agreements under which they are bound.
ALEP members are specialists in helping leaseholders make changes to the tenure of their properties. Of course, as the specialists, our members also act for freeholders in these transactions.
The main transactions fall into three categories:
The option chosen depends on the individual circumstances, but we look here at the broad choices.
If the lease length is getting to around 80 years or below, then this needs addressing immediately. An extension needs to be obtained and this can be done in broadly two ways. You can either extend your lease individually, or you and your neighbours can look to buy the freehold collectively or extend your individual leases on a group basis to achieve cost-sharing of some kind.