| If
you are a leaseholder (or you are buying a leasehold property),
you may have the right to buy the freehold of your property.
This is called 'enfranchisement', and it can be a good idea,
particularly if the existing freeholder doesn't maintain the
building properly. The rules are different for houses and
flats.
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Buying the freehold of a house
You normally have the right to buy the freehold
of a house if you have held a long lease (21 years of more)
for at least the past two years. However, business tenants
face different rules, which are not covered here.
You must give the current freeholder written
notice that you want to buy. You should also get legal advice.
You will pay the price of the freehold and
the landlord's costs. You may also need to pay a share of
what is called the 'marriage value' (the increase in value
from joining the leasehold and freehold interests).
You may need to apply to a leasehold valuation
tribunal or the court if you cannot agree terms.
If you have the leasehold on a flat, you usually
have the right to renew the lease for a further 90 years,
as long as you have been a long leaseholder (which means the
lease has 21 years or more to run) for at least two years.
The freeholder can refuse to renew the leasehold
if the property is to be redeveloped. But they will have to
apply to the court to do this. You should get legal advice
if this happens. You will have to pay for a new lease and
the freeholder's 'reasonable' costs, but you won't have to
pay ground rent under the lease.
Most leaseholders have the right to extend
their lease. If you have a long leasehold on a house (a lease
of 21 years or more), you usually have the right to extend
the lease for 50 years. You cannot extend it more than once.
However, you can buy the freehold, even after extending the
lease.
You do not have to pay to extend the lease,
but you do have to pay any expenses for doing this, such as
legal fees. And you will have to pay a new ground rent under
the extended lease, which will be set at current values and
will probably be much higher than the one you pay now.
The freeholder can refuse to extend the lease
only if they want to demolish or rebuild the house, or if
they or their family want to live in it. But if they want
either of these things, they will have to apply to the court,
and you would be able to claim compensation.
Real
Estate Contracts | Fee
simple | Leasehold
vs. Fee Simple | Buying
the freehold of a flat |
Buying
the freehold | What
is freehold land? | Best
Real Estate Property Investment Potential |
Consolidation
Loans Being Free | Freehold
and Leasehold Property in Chandigarh |
