Is a Leasehold enfranchisement revolution coming?

Dec 6, 2018

Alas, change is imminent and the public have until the 7th January 2019 to put forward their views on the Law Commission’s proposals to reform the leasehold enfranchisement system. Leasehold enfranchisement is comprised of both individual and collective rights which a leaseholder or group of leaseholders are entitled to, provided certain criteria are met.

These rights are contained across several different statutes and whilst they are a benefit to the leaseholder, they are complex, costly and uncertain to those not familiar with them. The Law Commission is therefore proposing to reform the enfranchisement regime to address an inherent imbalance between freeholder and leaseholder, and to hopefully simplify and streamline the process.

Current proposals include introducing one universal system to extend the lease of a flat or a house, something that at present is split between different statutes with differing criteria.

At present a leaseholder looking to extend the lease of their flat or house has to have owned the lease for a minimum period of 2 years before being eligible to claim a statutory lease extension. The Law Commission are looking at removing this requirement, meaning leaseholders may extend their lease earlier at a lower premium.

These are just a couple of examples of a wide range of proposals being put forward, and it will be interesting to see the contents of the Law Commission’s report to be put forward to the Government once the open public’s views have been taken into consideration.

It is likely to be a case of ‘when’, as opposed to ‘if’ reform of the enfranchisement regime is implemented, as general leasehold reform is on the government’s agenda with their own consultation on unfair leasehold practice having just come to an end.

The Law Commission’s current reform proposals are substantial, and many people are sceptical as to whether or not they will be ‘watered-down’ when being considered by parliament.

Herrington Carmichael offer a wide range of services to both leaseholders looking to exercise their individual or collective rights, and to freeholders whose property is subject to leasehold interests. Whether you are a leaseholder or a freeholder, please feel free to contact Joshua Watkins.