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Collective Enfranchisement: A Keyword Breakdown

Purchasing a freehold interest is a more complicated area of the law. This can be made more difficult by trying to wade through complex legal jargon. It is also not easy to understand the language used in legal texts and legislation.

There are lots of terms used as part of the process you need to understand if you’re going to get through the process and ultimately achieve your goal. We will look at the main terms.

Freehold Purchasing.

This might seem obvious, but if you are buying the freehold you need to know what this entails. It relates to the right that leaseholders have (especially those that reside in flats or apartments). Freeholds mean that you own the property outright; a leasehold merely allows the owner of the lease to reside in the property for a set period of time.

Collective Enfranchisement.

This is related to purchasing the freehold. Collective enfranchisement, which is often referred to as leasehold enfranchisement, essentially refers to groups of tenants in a block of flats coming together and asserting their right to purchase the freehold on their building.

The Leasehold Reform, Housing and Urban Development Act 1993.

This is the relevant legislation which has afforded leaseholders this important right to enfranchise.

Leasehold Valuation Tribunal.

This is a quasi-judicial, locally-based body that is authorised by the 1993 Act to make decisions relating to issues of freehold purchase in the event of a dispute between applicants and the current freeholder.

Peppercorn Rent.

This refers to a set amount of rent payable (normally quite minor) that residents then have to pay after they have bought the freehold.

It is, essentially, a charge from the freeholder to the leaseholder.

Marriage Value.

The marriage value is calculated in reference to the increase in value of the flat or apartment after the process of purchasing the freehold.

Absent Landlord.

One reason tenants come together to assert their right to collective enfranchisement is because their current landlord is absent for any number of reasons. If this is the case, then the tenants’ application to buy the freehold should state that it is due to an absent landlord.

You can see from the above list that there is a significant amount of jargon relating to the issue of collective enfranchisement, but while the terminology is often a little complex, the basic ideas are relatively simple. The procedures involved and law surrounding enfranchisement in not always straightforward. You will need to appoint a surveyor to value the freehold and a solicitor to deal with the legal aspects – you must be aware however, that many everyday solicitors and surveyors do not come across this type of specialist work and therefore will not know what to do. It is therefore essential that in selecting a surveyor and legal advisor, you choose collective enfranchisement specialists.

Tim Bishop is senior partner at Bonallack & Bishop, are a firm of collective enfranchisement solicitors specialised in advising on leasehold enfranchisement. Tim is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. He has expanded the firm by 1000% in 12 years and has plans for its continued development.

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