Leasehold enfranchisement involves a range of legal and valuation terms that can be unfamiliar to many leaseholders. Understanding a few commonly used expressions can make the process clearer.
Enfranchisement
Enfranchisement is the legal right for a leaseholder to purchase the freehold of their property. This can apply to a leasehold house or, in certain circumstances, to flats within a building. The Leaseholder Association have an in-depth guide surrounding enfranchisement.
Collective Enfranchisement
Collective enfranchisement allows qualifying leaseholders in a block of flats to join together to buy the freehold. A minimum number of leaseholders must participate for the claim to proceed.
Lease Extension Premium
The lease extension premium is the amount paid to the freeholder to extend the lease. It reflects the increase in value created by adding years to the lease and removing or reducing ground rent.
Marriage Value
Marriage value is the additional value created when a lease is extended or the freehold is acquired. It usually applies when a lease has less than 80 years remaining.
Notice of Claim
A notice of claim is the formal document served on the landlord to begin the enfranchisement or lease extension process. Many leaseholders choose to take advice from firms such as www.forsters.co.uk/ who are a London law firm before serving notice to ensure it is completed correctly.
Peppercorn Rent
A peppercorn rent refers to a ground rent with no meaningful financial value. It is commonly applied after a statutory lease extension, meaning no ongoing rent is effectively charged.
Understanding these key leasehold enfranchisement terms helps leaseholders make informed decisions.