What exactly is a lease?
Most flats and a few houses in England and Wales are owned under long leases, with long in this instance meaning longer than 21 years. This means that a leaseholder (or flat owner, which is the term used predominantly throughout this website) is in fact really just renting the property for a particular length of time from a freeholder who commonly owns the building around the individual flats (communal areas, roof etc.). The freeholder technically owns the ground beneath the property from the centre of the earth and above the property to the top of the sky.
Leasehold enfranchisement is the collective term for the process of democratising what is effectively a thousand-year-old feudal system. Successive governments have implemented laws including the 1967 Leasehold Reform Act, the 1987 Landlord and Tenant Act, the 1993 Leasehold Reform, Housing and Urban Development Act and most recently the 2002 Commonhold and Leasehold Reform Act. These have made it progressively easier for owners to buy out the freeholders collectively (thereby each flat owner has a lease and also owns a share of the freehold), extend their leases or replace the managing agents, among other things.
The lease is a document that governs this relationship. For most flat owners this is a rather impenetrable and complex document that they never read. We encourage every owner to make sure they DO read this and understand the various agreements under which they are bound.
ALEP members are specialists in helping particularly owners of flats to make changes to the tenure of their flats. Some also act for freeholders in these transactions. This broadly falls into three categories:
- Lease Extension
- Freehold Acquisition
- Right To Manage
The option chosen depends on the individual circumstances, but we look here at the broad choices.
If the lease length is getting to around 80 years or below, then this needs addressing immediately. An extension needs to be obtained and this can be done in broadly two ways. You can either extend your lease individually or you and your neighbours can look to buy the freehold collectively or extend your individual leases collectively on a bulk basis to achieve cost-sharing of some kind.
