Enfranchisement and lease extension
A short guide
October 2023
Leasehold Reform Act 1967.
Leasehold Reform, Housing and Urban Development Act 1993.
The Leasehold Reform Act 1967 has now been with us for over 50 years.
Originally intended to allow enfranchisement of lower rateable value houses, it was amended significantly by the Housing Act 1974 (which introduced higher rateable value limits and allowed for marriage value in the valuation formula), by the Leasehold Reform, Housing and Urban Development Act 1993 (which removed rateable value limits altogether), by the Housing Act 1996 (which removed the low rent test in respect of leases for a term in excess of 35 years) by the Commonhold and Leasehold Reform Act 2002 (which further modified the low rent test and, in most cases, the residence test, as well as removing marriage value for leases with over 80 years unexpired) and by the Housing and Regeneration Act 2008 (which pretty much removed the low rent test entirely for leases granted on or after 7 September 2009).
The Leasehold Reform, Housing and Urban Development Act 1993 introduced for flat owners with qualifying leases the collective right to enfranchise blocks of flats and the individual right to a lease extension. It was also amended significantly by the 1996 Act and again by the 2002 Act.
The principal purpose behind all this amending legislation was to make the enfranchisement process easier by reducing the qualification rules and simplifying the valuation process. The 2002 Act also attempted to make a collective claim fairer by giving all tenants the opportunity to participate in a claim through the mechanism of a Right to Enfranchise (RTE) company; however, that particular set of amendments has never been brought into effect and, owing to the inadequacy of the drafting, is never likely to be.