MARCH 2009
Most houses which are not divided into flats are freeholds. Leasehold houses are
rarer than leasehold flats but they can be found in London and some other towns in
the UK. They are more common on landed estates where the houses were sold on
leaseholds in order to retain a measure of control over the estate.

The Leasehold Reform Act 1967 gave tenants of houses the right to buy the freehold.
The original legislation has been amended many times since to expand the ambit of
the legislation. Unfortunately the rules (particularly in relation to valuation of the
sum due to the landlord) differ in relation to different properties. In some cases
tenants also have an alternative right to extend the lease.

Q u a l i f i c at i o n
to be for a term greater than 35 years. The leaseholder also has to satisfy a residence test. The house must be designed or adapted for living in and reasonably be described as a “house”. It must also be divided p R o c E D u R E
vertically from any adjoining building. Following the House of Lords decision in Boss Holdings in January 2008 To start the claim it is necessary to serve the landlord with the definition has become wider. This means that it must a statutory notice. There is no time limit on the landlord’s be adapted for living in or at some point in its past must counter notice. If terms cannot be agreed the claim will be have been designed for living in. A more recent case called referred to the Leasehold Valuation Tribunal who will make a Grosvenor v Prospect Holdings Ltd suggests that predominately commercial buildings will not qualify but it is sensible to obtain advice on this issue. We always recommend that an inspection is carried out to assess whether a building qualifies.
The premium is essentially the sum of the loss of the ground W h o c a n a p p ly ?
rent, the loss of the reversion and 50% of the share of the marriage value which is the uplift in value of the house once The tenant must hold a long lease i.e. one granted for more the freehold and leasehold have been “married” together. than 21 years or with a right to renewal. The applicant must The type of statutory valuation that applies does vary and have been the leaseholder for two years prior to making the we strongly recommend that specialist valuation advice is application. There is no requirement that the applicant obtained. We have a number of specialist enfranchisement resides in the property. If the lease is a business lease there are valuers who we work closely with and who we can further restrictions which effectively mean that the lease has Natasha Rees on 020 7863 8385 or or Paul Neville on 020 7863 8401 or Forsters LLP | 31 Hill Street | Mayfair | London | W1J 5LS | T: 020 7863 8333 | F: 020 7863 8444 | This briefing offers general guidance only. It reflects the law as at March 2009. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.


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