It may not be possible for Leaseholders to seek enfranchisement or the right to manage. For example, there may not be a sufficient number of Leaseholders who wish to join in the group scheme. It may not be legally possible, perhaps because more than 25% of the building is devoted to non-residential use, as with a flat over a shop
In those circumstances, a Leaseholder may instead consider an individual lease extension.
Unlike an enfranchisement or right to manage claim, a lease extension claim is an individual right available to a flat owner whose lease was initially granted for at least 21 years.
The right is to extend the lease by 90 years, and at the same time to reduce the ground rent (but not service charges) payable under the lease to nothing, in return for payment of a price to the Freeholder. It confers no management rights on the individual flat owner.
If the lease has around 80 years to run, Leaseholders are strongly advised to extend the lease without delay. If a lease has less than 80 years to run at the time when a lease extension is claimed, the price is increased by an additional valuation element called the “marriage value”. Marriage value will also increase the price payable by a group of Leaseholders to enfranchise the freehold. In some cases, particularly where the length of the lease is significantly less than 80 years, the price payable is increased very substantially.
We can assist landlords or tenants in this process from advising on the necessary criteria right through to the end of the extension process.
If you would like further advice or assistance please contact us using the enquiry form above or on either property@abacus-law.co.uk or 0161 833 0044
