Exercising the collective right to enfranchise—leasebacks
Exercising the collective right to enfranchise—leasebacks

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

  • Exercising the collective right to enfranchise—leasebacks
  • Mandatory and optional leasebacks
  • Leaseback terms
  • Easements
  • Landlord covenants
  • Tenant covenants
  • Other terms

Mandatory and optional leasebacks

The nature of the collective right of enfranchisement is such that it may be exercised in relation to premises where:

  1. there are flats which are occupied by tenants who hold under a secure tenancy or a tenancy from a housing association or other public sector landlord

  2. there are flats which are occupied by tenants who are otherwise not qualifying tenants

  3. not all the qualifying tenants within the premises are participating tenants

  4. the freeholder or another relevant landlord is an owner occupier of a flat within the premises

  5. up to 25 per cent of the total floor area of the building is given over to non-residential, ie commercial, uses

As regards the first of these categories, Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) provides for a mandatory leaseback, by requiring that the nominee purchaser ‘shall grant’ a leaseback of any such flat to the reversioner. The wording appears to mean that the reversioner cannot refuse the leaseback even if it wished to.

In addition, the reversioner can elect to have a leaseback from the nominee purchaser of any flat or unit falling within the remaining categories. The election must be exercised in the counter-notice which is served by the reversioner in response to the participating tenants’ initial notice. Landlords of mixed use premises cannot assume