The Law Commission publishes a consultation paper entitled: Leasehold home ownership: buying your freehold or extending your lease.
The consultation makes a number of proposals to overhaul the procedure for the leasehold enfranchisement of houses and flats including:
introducing a single scheme for “residential units” rather than separate schemes for houses and flats;
Lease Extension
abolishing the requirement to own the property for two years in order to qualify;
Individual Acquisition of Freehold
the qualifications based on financial limits such as the low rent test and rateable values to be removed;
new qualifying criteria that if there is more than 25% non-residential use then the building will not qualify (as already exists for collective enfranchisement claims);
Collective Enfranchisement
introducing a requirement for the freehold to be purchased by a company limited by guarantee on behalf of the participating leaseholders unless there are less than four units;
permit collective enfranchisement of an estate rather than single blocks.
no further claim can be made for five years once a collective enfranchisement has concluded;
new right for non-participating leaseholders to later purchase a share in the freehold company;
Procedure & Valuation
single procedure for lease extensions, individual freehold purchase and collective freehold purchase with standard forms;
the Law Commission’s stated aim is to provide a better deal for leaseholders as consumers and the consultation paper sets out alternative valuation options to seek to reduce premiums.