Freehold Enfranchisement
freehold enfranchisement
Leases lose value during their life is they are wasting assets. Let’s say you pay a large sum for a 100 year lease, as every year passes the lease becomes shorter and the value falls. You would not pay as much for a 10 year lease as you would for a 100 lease. UK law offers some protection to lease holders and gives them the right to negotiate an extension to their lease. The best news is that if at least 50% of lease holders all act together they can force the person or organisation that owns the freehold to sell it to them via a process termed freehold enfranchisement or collective enfranchisement.
What conditions must you meet in order to participate?
- At least 50% of leaseholders must be involved
- The freehold building is detached and self contained
- The original lease must have been over 21 years long
- Commercial space can only be a maximum of 24% of the property
- 2/3 of the properties must be qualifying
The legal issues involved are complicated and delicate negotiation is likely to be a key element of successful lease enfranchisement. Luckily there are lots of experts out there who can offer advice and manage the process for you.