Enfranchisement is a relatively complicated procedure and many people are daunted by this. This article looks at the right to enfranchise and how it can be made less terrifying.
The problem with putting things off is that they grow worse over time…until a crisis blows up. This often happens if you live in a leasehold property where the term of the lease has dropped below 80 years. The value of the property drops and is less attractive to purchasers. As well as this, purchasing a leasehold with less than 80 years left is more costly.
Ignore enfranchisement and you ignore your future security.
So what exactly is leasehold enfranchisement? The right to enfranchise, when there are a group of tenants interested is called collective enfranchisement. That is because it offers the right in Law for flat leaseholders in a block of flats to join together to force their landlord to sell the freehold to their block of flats to them. (The Leasehold Reform Act 1993).
You cannot apply for enfranchisement of a commercial property. When you buy the freehold, you then become both landlord and tenant. You can now grant yourself a new lease of up to 999 years, which secures the house or flat.
One of the most popular advantages is that buying the freehold means that a group of tenants can take direct control of maintenance and management of their building. Disputes about service charges are one of the main reasons why tenants go ahead with enfranchisement. It saves them uneccessary stress, increases the value of the property and secures a better inheritance.
If you keep putting off the decision, either to extend your lease or to go for enfranchisement you make it increasingly costly for yourself to buy the freehold as time goes on. You may not realise another cost involved: for leases that have 80 years or less to run, the landlord becomes entitled to charge 50% of the ‘marriage value’ (i.e the difference in the value of the property owned by the landlord and the value post enfranchisement). There is no marriage value payable if a lease has over 80 years left.
This gets tricky and it’s not an area of law to dabble in. Enfranchisment is a complicated legal procedure that specialised advice should be sought to help you through it.
Make sure that you check out a solicitor who specialises in this work and who has acted for hundreds of landlords and tenants in lease extension cases who you can rely on for the right guidance and advice. Depending on where you live, you may find that to get sufficiently specialist solicitors, you may have to appoint a firm which is not local to you, and to instruct them by e-mail and telephone. This professional will also put you in touch with surveyors who specialise in valuing leasehold extensions and collective enfranchisement.
About the Author:
Bonallack & Bishop are a firm of specialist enfranchisement solicitors. For advice on the right to enfranchise contact them today. Senior partner Tim Bishop is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. Tim has expanded the firm by 1000% in 12 years and has plans for its continued development.