Leasehold enfranchisement

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The term 'leasehold enfranchisement' includes rights to:

  1. •

    extend a residential lease, and

  2. •

    acquire the freehold

The purpose of those rights is to enable tenants to continue occupation of their residential property at a fair price and on fair terms. It also allows leaseholders to maintain capital value and the ability to mortgage.

Mortgage lenders look unfavourably on leases with less than 70 years left to run.

Houses

Part I of the Leasehold Reform Act 1967 (LRA 1967) gives an individual tenant of a house the right to:

  1. •

    extend the lease by 50 years after the expiry of the existing term, or

  2. •

    acquire the freehold of the house

A lease can be extended only once under LRA 1967 and can be terminated (with compensation) for redevelopment under LRA 1967, s 17. Moreover, the rent payable under the extended lease is to be a 'modern' ground rent—representing the letting value of the site—and the landlord can insist on a review midway through the new term (at year 25). In each case, the tenant must pay the valuation cost.

The abolition

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