Leasehold Enfranchisement - What's It All About?

The term 'leasehold enfranchisement'( or collective enfranchisement as it is often known) is one that is not well known to people who have not undergone the process. The concept of leasehold enfranchisement is however a relatively simple one. It is in short, what happens when long term tenants of a block of flats join together in an act of enfranchisement and buy the building which is the overall 'home' to the flats which they lease. This means that they no longer have to pay any service charges, nor do they have to pay ground rent (if this is applicable).

Leasehold enfranchisement is only however possible if there are at least two flats in the building. Moreover, there need to be qualifying tenants living in at least 66% or two thirds of the flats. A qualifying tenant (in terms of leasehold enfranchisement) is someone who has a long lease (in excess of 21 years), has a lease that will have termination on death or marriage or a date that is 'unknown'.

In addition tenants who have a long lease in terms of the 1989 Housing Act or who have a 100% shared lease ownership, can be viewed as 'qualifying' in terms of enfranchisement.

Buildings that have only, say 40% of tenants who are 'qualifying' tenants will simply not be eligible to undertake a process of collective enfranchisement; as they will be without the required two thirds majority. Potential enfranchisement groups should also be aware that there are many exclusions to leasehold enfranchisement, so if the landlord is a housing trust that has charitable aims (e.g. an alms house provider) and the flat is provided as part of the charitable aims of that trust, then the tenancy will not be viewed as a 'qualifying tenancy'.

Additionally buildings eligible for enfranchisement need to have less than 25% of the building used for commercial purposes. This means that if there are shops and offices occupying 30% of the building, then it cannot be purchased by people who have come together to undertake leasehold enfranchisement.

Thus the whole process of leasehold enfranchisement is actually a very complex area, but one that can be intensely rewarding and beneficial to the leaseholders who undertake the process, since owning the building is far preferable to simply renting it as a standard rule. Often however, the real stumbling block to successful enfranchisement, is the inevitable problem of getting a group of disparate people to all agree on a mutually beneficial outcome.

Finally don't forget that the process of enfranchisement is complicated. In particular, when you come to appoint a solicitor and a surveyor, make sure that they are specialists and really understand what's involved in leasehold enfranchisement.


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Thinking of leasehold enfranchisement? Bonallack and Bishop are specialist collective enfranchisement Solicitors. Senior Partner Tim Bishop is responsible for all major strategic decisions. The firm has grown by 1000% in 13 years and Tim sees himself as a businessman who owns a law firm.