Katie Cohen: Why Leaseholders Should Enfranchise!
Katie Cohen, a former Partner at JPC Law is now a Partner at Child & Child.~
This time Katie introduces us to enfranchisement and explains why leaseholders should do it.
When you own a leasehold flat, you must be aware that a) its value diminishes as the term of the lease gets shorter and b) you have a statutory right to enfranchise. Enfranchising enables you to either extend your lease by 90 years and/or collectively buy the freehold with most of your fellow lessees.
Where the lease falls under 80 years, the cost of enfranchising will increase dramatically.
A disadvantage of owning leasehold property is the often difficult relationship lessees have with their freeholder, particularly if they fail to repair the block or the lessees consider they are charging too much for services.
So why enfranchise?
The simple answers are:
- To protect the value of your flat; and
- Gain control of the block by collectively buying the freehold with your fellow lessees.
Whether you are a first time buyer or an experienced property owner, it is essential to take specialist legal and valuation advice when extending your lease or buying your freehold.
It is advisable to talk to your fellow lessees if you are experiencing problems with your freeholder or with the overall management. It may be the case that given the length of the leases, it would cost approximately the same to acquire your share of the freehold then it would to extend an individual lease. Alternatively, if managing the block (and not owning the freehold) is your priority, you may instead exercise your right to manage which enables the lessees to manage the block without owning it.
The inability to sell your property may only become clear when you market your flat. A short lease can delay a sale and make it difficult for a prospective buyer to get a mortgage. It is open to a seller of a flat to exercise the right to extend their lease and assign the benefit of that right to the buyer, but this is a complex process which must be undertaken by a specialist solicitor.
What should you do?
Enfranchisement is a complex field of law which should only be undertaken by a specialist leasehold enfranchisement solicitor and specialist valuer. In short, take proper advice.
For further information on this and other leasehold services provided by Child & Child, please contact Katie on:
Tel: 020 7201 1865
e-mail: [email protected]
Winner – Solicitor of the Year (Claire Allan) Enfranchisement Awards 2012
Finalist – Solicitors Firm of the Year, Enfranchisement Awards 2012