© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Anthony John, who now leads the property team at Bournemouth solicitors Horsey Lightly Fynn, has been dealing with leasehold enfranchisement since 1967. Anthony trained with a South Wales law firm that specialised in acting for the National Coal Board dealing with sales of freeholds of former coal miners' cottages under the Leasehold Reform Act 1967 - the first piece of legislation allowing tenants of houses to buy their freeholds or to extend their leases. This was subsequently broadened to include flats under later legislation passed in 1993.
Knowing when to apply the 1967 or 1993 Act can have a crucial effect upon valuation - the 1967 Act does not contain the concept of ‘marriage value' that results in a significant increase in price for the tenant. It is not always obvious and, for example, we have dealt with cases of ‘coach houses' joined to flats and, first floor ‘infill' apartments between blocks of flats, where the 1967 Act has been applied resulting in a significant decrease in the premium payable by the tenants.
The most frequently asked question by our clients is ‘why should we buy our freehold or extend our lease?' The basic answer is that it must improve the value or saleability of your property and to reach a decision requires careful analysis. This firm handles a significant volume of leasehold property sales and we understand all of the commercial implications in respect of freehold transactions. Each situation is different and, if it is not beneficial or cost-effective to proceed, we will advise our clients accordingly.
A little known aspect of enfranchisement legislation is the ability for owners of commercial businesses to acquire the freehold. A special section of the 1967 Act permits this and subsequently the business can be converted to residential use (for example, hotel/rest home to flats/town houses etc.). However, freeholders will attempt to impose covenants to restrict such changes and also the 1967 Act requires certain criteria to be met before this can be achieved. So it is vital to know how to argue the case and avoid such restrictions being imposed. We have extensive knowledge and experience of how to deal with this robustly.
We also advise landlords as we have a good understanding of the other ‘side of the coin' - the tenant's perspective. So we can be gamekeeper or poacher, it all depends who is paying the bill!
CASE STUDY
We were instructed by the Leasehold owners of a hotel in Bournemouth - a Grade Two listed building that formed part of a large, locally well-known estate - in the acquisition of the Freehold under the Leasehold Reform Act 1967. Their initial instruction to us was to request an extension to their lease and they were therefore very surprised when we advised them that, under existing legislation, it was possible to acquire the freehold.
As matters proceeded valuations were undertaken by our clients and the Freeholders and the two proposed premiums were not very much apart. Middle ground was therefore easily found and deemed reasonable by both parties.
The main issue in this case, however, was the attempt by the Freeholders to impose unlawful restrictions in their transfer of the title, including certain restrictive covenants that would limit the use of the property to Use Class C1 (hotel use). We argued that the covenants were only enforceable if they "are such as to materially enhance the value of other property" in which the landlord has an interest (as required by legislation) and it was felt that this was not the case. The hotel was situated in an area of mixed residential properties and hotels and so a residential user would not be detrimental in any way to adjoining properties. Indeed it was felt that the covenants were being imposed solely to enable the Freeholder to demand a premium for any future change of use of the property. Likewise, a covenant to restrict the sale of liquor on the premises seemed entirely unreasonable on the basis that the leaseholders already held a valid liquor licence for the property and had done so for some years.
It was only after months of negotiating and standing our ground that the Freeholders agreed to the removal of these restrictions. We were then in a position to progress to completion of the matter with our Clients benefiting from a freehold title that was entirely suitable for them.‚ They avoided the restrictive covenants and subsequently sold the property at a substantial profit.