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Lease Extensions and
Freehold Enfranchisement
In the UK we have a unique property ownership system, particularly in terms of flats / apartments. When we say we own a flat, we actually own a 'lease' of a flat (as leaseholders). This means that someone else (the freeholder) owns the land and that we effectively have a long term rental agreement for the flat - these were generally agreed at 99-years or 125-years, but with usually a very low rent such as £50 per year, £250 per year or even 'peppercorn' meaning no rent is paid.
The problem that arises is that these leases become shorter, year by year the length of the lease decreases until the lease runs out and the flat reverts to the freeholder - meaning the flat is lost and gone.
The law ensures that leaseholders have a right to extend their leases and protect their 'ownership' of the flat.
The Leasehold Reform, Housing and Urban Development Act 1993 has given leaseholders a right to extend a lease by 90-years and once extended, the ground rent will go to zero. Legislation also allows leaseholders, under certain conditions, to buy the freehold. Both of these occur with a payment of a premium to the freeholder.
Extending a lease on a flat and buying the freehold can both be extremely complicated processes. Raven Property Consultants are specialists in this field and can explain all the finer details, advise on premiums and hold your hand through the whole process. We can help both leaseholders and freeholders.
These processes can be very complicated and even general valuation surveyors find it challenging but as specialists in this field, we will make it as easy and simple as possible.
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