Owners of leasehold property have rights under a number of Acts of Parliament to;
• extend the lease term by a number of years.
• purchase freehold houses
• jointly purchase the freeholds of blocks of flats
These rights are available whether the leaseholder is resident in the property or not.
Extending a Leasehold
Under certain circumstances, Leaseholders may wish to extend their current lease agreement. Any Leaseholder has the right to purchase an extension of 90 years to an existing Lease at a peppercorn rent provided that;
• the Leaseholder has owned the flat for the last 2 years
• the Leaseholders original Lease term is greater than 21 years
• An extension is available whether the Leaseholder is resident in the property or not.
Cost of the Freehold
The price of the freehold is calculated according to the value of the ground rent income, the value of the Freeholders reversion at the end of the lease and 50% of the increase in value when the Freehold and Leasehold interests are combined. Leaseholders pay the Freeholders legal costs, valuation costs and Stamp Duty.
Agreeing a price
The Leaseholders form a ‘right to enfranchise company’ and their solicitor serves notice making a monetary offer for the freehold. The Freeholder either accepts the offer or the parties negotiate a price. If the negotiations fail, either may apply to the Leasehold Valuation Tribunal to determine the price.