You are the freeholder or intermediate leaseholder of a house and want to know if your tenant can enfranchise the house? The following is the criteria to establish whether your tenant can enfranchise the house under the Leasehold Reform Act 1967:
Can my tenant or their purchaser enfranchise the house? The qualifying criteria.
In order for a house to be enfranchised on a statutory basis, the building, lease and tenant must qualify.
For the building to qualify it must be a “house”. This can include a shop with flat above, or a building converted into flats, and possibly offices. It will not be a “house” if a material part lies above or below a part of the structure not comprised in the house.
The lease must comprise the whole of the house and the original term must have been for in excess of 21 years, or in excess of 35 years for a business tenancy.
The tenant must have owned the lease of the house for a minimum of two years. The tenant also has to have occupied the house as their only or main residence for a period of two years out of the preceding ten, if the house has a mixed use with a business tenancy (such as a shop with flat above) or if it contains a flat with a qualifying lease under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993.
It is possible, when a house is sold, for the Vendor to begin the enfranchisement process by serving Notice of Claim, and Assigning the Benefit of the Notice to the Purchaser.
The 1967 Act also allows the qualifying tenant of a house to be granted a 50 year extension of the lease at a Modern Ground Rent throughout the term, without paying a premium. However this right is seldom exercised.
Can my tenant or their purchaser enfranchise the house? Personal representative of a deceased person.
The personal representative of a deceased qualifying tenant can make a Claim, provided they do so within two years of the date of grant of probate.
If my tenant or their purchaser can enfranchise the house, what are they entitled to acquire?
If the building, tenant and lease qualify, the tenant is entitled to acquire the freehold of the house and any intermediate leases, and will become responsible all repairing obligations.
For more information on how the enfranchisement price is calculated see What price will I receive for the house?
For more information on the process see Statutory Process – Houses.
Our services: We are able to advise you on the price you are likely to receive from the enfranchisement of a house where you are either the freeholder or intermediate leaseholder. If you have received a Notice of Claim under the 1967 Act, or a copy of one, we are able to advise you on the likely enfranchisement price, and to negotiate the price for you. Your solicitor, or the freeholder’s solicitor if you are an intermediate leaseholder, will need to respond within two months of the date of the Notice, stating whether or not the Claim is admitted. We are Chartered Surveyors, Regulated by RICS, with Registered Valuers that are experts in lease extensions and enfranchisement. We are also able to provide further information to answer Can my tenant or their purchaser enfranchise the house?
