The Leasehold Reform Act 1967 as amended by the Commonhold and Leasehold Reform Act 2002 enables tenants of houses on long leases to enfranchise (acquire the freehold of) their properties.
The valuation of a premium to buy the freehold (enfranchise) a house is more specialised, as are the negotiation of the matters relating to the Leasehold Reform Act 1967. Surprisingly after all these years, the law as it stands is still not clear on the definition of a “house”. We have dealt with the following types of houses: “traditional” houses, shops with residential above, pubs with residential, office buildings with residential, a hospital with residential and even a block of flats. This area of case law continues to develop.
Knowledge of the valuation process is crucial. Incorrect advice can be lease to catastrophic results. The method of valuation depends on a number of factors including, the historic rateable value of the property, the level of ground rent and whether the lease qualifies only due to later amendments to the 1967 Act. We are able to assist with the determination of method of qualification and basis of valuation. The methodology is contained under sections 9(1) (the “Original Basis of Valuation”) or Sections 9(1A), 9(1B) or 9(1C) (the “Special Basis of Value”). There can be significant savings if the criteria of 9(1) are met. This we have used to great advantage for a number of Housing Association and Charity clients.
For more information, please contact: Justin Bennett BSc (Hons) FRICS ACIArb