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Under the Leasehold Reform Act 1967 (LRA 1967), the tenant of a house may be able to buy their freehold and any intermediate leasehold interest. This is known as Leasehold Enfranchisement.
The lease of your house will have been granted for a certain number of years. The value of your lease will reduce as the number of years left on it decreases.
Once the term of your lease reduces past a certain number of years (in many cases, 75 years or less) it will be harder to find a mortgage company who is willing to lend against the property. This will make re-financing or selling your property increasingly difficult.
Many new Leasehold Houses have been drafted with onerous leasehold terms which many lenders have now refused to accept. In situations such as this it may be imperative for you to buy the Freehold in order to be able to sell or re-mortgage your property.
There are three criteria that you must meet in order to qualify for enfranchisement:
Some freeholders will agree to sell their interest to a tenant without the need for a formal claim, but you should always seek professional advice before proceeding.
If a formal claim is required, the procedure is as follows:
It is advised that you obtain a professional valuation of the freehold prior serving your notice of claim on the landlord, as the valuation mechanism set out in the relevant legislation can be complicated.
Valuation is not an exact science, and the cost of purchasing the freehold will vary depending on a number of factors including:
A tenant has one month from the date on which the purchase price of the freehold is determined to change their mind about proceeding with leasehold enfranchisement. If the tenant decides to withdraw from the procedure at this stage, they will still be responsible for paying the landlord’s reasonable costs.
Lupton Fawcett is a leading personal and commercial law firm in Yorkshire with highly regarded teams of Residential Property Solicitors at each of our offices.
So, if you are looking to buy or sell a residential property in the West Yorkshire area, call and speak to one of our expert Conveyancing Solicitors in Leeds. They have a detailed understanding of the local property market and can help make the process of buying or selling your house as smooth as possible.
We also have a similarly well-informed team of Conveyancing Solicitors in Sheffield, ready to advise anyone looking to buy or sell residential property in Sheffield and South Yorkshire. And for those looking to move to or within North Yorkshire, our well-established team of York Conveyancing Solicitors will be able to offer you an informed insight into the area, advising you throughout the conveyancing process.
Our Residential Property Solicitors act regularly for clients across Yorkshire including Bradford, Halifax, Harrogate, Chesterfield, Rotherham and Wakefield.
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Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.