Collective enfranchisement—eligibility
Collective enfranchisement—eligibility

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Collective enfranchisement—eligibility
  • Does the building qualify?
  • Qualifying tenants

The right provided by the Leasehold Reform Housing and Urban Development Act 1993 (LRHUDA 1993) is for the enforced sale of the freehold of the building, to the nominee purchaser of a group of leaseholders of the flats who represent at least half of the flats in the building.

There are currently no plans to implement provisions in Commonhold and Leasehold Reform Act 2002 (CLRA 2002) which would require the purchaser:

  1. to be a right to enfranchise company (RTE company)

  2. to notify all qualifying tenants of the proposal to enfranchise, and

  3. invite them to participate

Until the commencement of the relevant section of CLRA 2002 the purchase must be carried out through a nominee purchaser.

Where there is any intervening interest, like a headlease, this must generally be acquired as part of the purchase.

Does the building qualify?

The building must:

  1. contain at least two flats

  2. at least two-thirds of the flats must let to qualifying tenants

  3. parts used for non-residential purposes, and common parts, must not exceed 25% of the internal floor area of the building (taken as a whole)

In Palgrave Gardens Freehold Company Limited v Consensus Business Group (Ground Rents) Limited (unreported, Central London County Court, 18 February 2019) the County Court held that a single initial notice could b