The Law Commission is seeking your views on its provisional proposals for a new, single enfranchisement regime designed to benefit leaseholders of both houses and flats.
The consultation has been extended and closes on 7 January 2019.
The commission has launched a consultation, which aims to make enfranchisement easier, quicker and more cost effective. The proposed reforms will focus on:
- buying a freehold
- extending a lease.
All stakeholders in this area including landlords, individual leaseholders, professional advisers and representative groups are invited to respond.
The consultation objectives are grouped into four categories for reform:
- What should the enfranchisement rights be?
- Who should be entitled to exercise enfranchisement rights?
- How should enfranchisement rights be exercised?
- What should it cost to enfranchise (notably the question of valuation premiums)?
The consultation paper includes the following proposals:
- to promote transparency and fairness in the residential leasehold sector
- to provide a better deal for leaseholders as consumers
- to simplify enfranchisement legislation
- to improve access to enfranchisement and implement reforms that better protect leaseholders, including putting in place similar enfranchisement terms for leaseholders of houses and flats
- to examine the options to reduce the premium (price) payable by existing and future leaseholders to enfranchise, whilst ensuring sufficient compensation is paid to landlords to reflect their legitimate property interests (requiring a human rights examination)
- to make enfranchisement easier, quicker and more cost effective (by reducing the legal and other associated costs), particularly for leaseholders, including by introducing a clear prescribed methodology for calculating the premium (price), and by reducing or removing the requirements for leaseholders (i) to have owned their lease for two years before enfranchising, and (ii) to pay their landlord’s costs of enfranchisement
- to ensure that shared ownership leaseholders have the right to extend the lease of their house or flat, but not the right to acquire the freehold of their house or participate in a collective enfranchisement of their block of flats prior to having ‘staircased’ their lease to 100 per cent
- to bring forward proposals for leasehold flat owners, and house owners, but prioritising solutions for existing leaseholders of houses.
The project is designed to comprehensively review enfranchisement, with a view to improving the position of leaseholders as consumers (rather than as investors). The proposed regime should improve the current enfranchisement process for both leaseholders and landlords.