Demystifying the enfranchisement process

1.                  That the process itself is not complicated:  it is the administration that can be a nightmare.  Advise the client therefore to choose a maximum of 3 board/representative members to represent the block.

Confirm that you will not enter into correspondence with any lessees individually, and that all queries should be referred through your client  “Co-ordinator”,  being one individual, maximum two, to avoid confusion.

2.                  Ensure that the “Co-ordinator” is computer literate and able to work on Excel spreadsheets, so that all information regarding leaseholders/leases/terms/rents/contribution for costs etc., can be easily updated.

3.                  Set realistic and fixed time limits for lessees’ participation in the process for payments of costs and other contributions and I  suggest an increased fee scale for those who may join in the process late, as this can cause administrative chaos in documentation, (participation agreements and the like).

4.                  If satisfactory participation cannot be achieved to enable the process to proceed within, say 3 to 4 months, advise the lessees at the outset that the process should be terminated and individual lease extensions initiated.  Don’t waiver, particularly in a rising market.

5.                  Carry out the “know your client” process through the managing agents of the block to avoid having to do money laundering checks against each individual lessee.  The Land Registry now require full “know your client” information on registration.  This will save hours of administrative time.

In conclusion, it is up to the professionals to make the process simple for their clients.  They should have the ability to assist with funding and where there is not full participation, advise as to the process of “White Knights” and have the commercial know-how to guide their clients on all ancillary matters. As an example, in one block leaseholders were advised during the process of communal enfranchisement, how to fund major works by incorporating a ground rent in the new lease extension thereby enabling major works to proceed without resorting to a service charge increase.  The leaseholders were also assisted by re-structuring the income stream from the garages in the block, which had previously been let on un-commercial terms, to enable further support for the funding of the major works. The approach from the enfranchisement specialists should be “make it simple and be commercial” and as a leaseholder, make sure that you have faith in your professionals.  At the end of the day, they should be there to “make it simple for you”