A new lease of life: - CentreForum

A New Lease of Lifeparticipating, those leaseholders proceeding with enfranchisementmust buy not only their own share of the freehold but also,between them, the share of the other half of the non-participatingleaseholders.Before automatic enfranchisement rights, the Landlord and TenantAct 1987 gave flat owners the right to first refusal on their property.It forced landlords to offer lessees the freehold to their propertiesbefore putting them on the open market. This is now less importantbecause leaseholders have the right to enfranchise at any time,rather than solely when the freeholder wants to sell. Althoughenfranchisement and extension rights are now the same for flatsand individual houses, the right of first refusal only applies to flats,not houses and should be extended to houses for consistency.Right To ManageLeaseholders were given the right to remove an unsatisfactorymanager by the 1987 Act, which initially required them to go tocourt, but is now overseen by the LVT. 30 The RTM strengthensthis power and allows leaseholders to take indefinite control ofmanagement without having to prove any fault on the part of themanager. Should a freeholder reject an application, leaseholderswishing to continue their claim must either reapply or take theircase to a tribunal. RTM became effective in 2003 after the 2002 Actgave qualifying leaseholders 31 the right to force the transfer of thelandlord’s management functions to an RTM company set up bythem. 32 The RTM company can subsequently manage the propertyitself or appoint a managing agent. Leaseholders must continueto pay ground rent to their freeholder, but management costs of30 Leaseholders can recommend a managing agent to the LVT, although theappointed agent then contractually works for the tribunal.31 RTM only applies to leasehold flats and not to leasehold houses or bungalows.A qualifying tenant is a leaseholder whose lease was originally granted for aperiod exceeding 21 years. The building must have two thirds of units leasedto qualifying tenants, and be of a structure that can be served independently. Itdoes not qualify if more than one quarter of its floorspace is used for commercialpurposes, if there are multiple landlords or it is of four flats or fewer lived in bythe freeholder. Local authority properties are not eligible.32 An RTM application requires support of half of the leaseholders who must thenserve a notice to all other tenants with the option to join the application if theywish. Following this a notice must be given to the landlord stating that they wantto take RTM, giving the freeholder a month to respond. If the freeholder doesnot object, they can take control three months after this notice. If the freeholderchallenges, they must go to an LVT or reissue the claim.21