© 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.
The 50% Participation Rule!
As enfranchisement is a group action, a common question often asked is, “do all my neighbours need to take part?”
Under the legislation, the participating tenants must be those of the flats comprising not less than 50% of the total number of flats on the notice of claim is given (unless there are only two flats in the building, both flats must participate).
Note, that it is the total number of flats in the building. In other words, this includes those of qualifying tenants and of all the other flats in the building.
So, for example, in a block of 23 flats, at least 16 (two-thirds) must be held by qualifying tenants and at least 12 qualifying tenants (50% of the total number of flats) must participate.
Is there a Right to Participate?
When exercising the Right to Manage process there is a mandatory requirement that before a claim notice is served the RTM company must give notice to all qualifying tenants who are not members or who have not agreed to become members of it.
This mandatory requirement, at least until the Right to Enfranchise Company legislative provisions are bought into effect, do not apply to collective enfranchisement claims.
There is NO right to participate or to be invited to join in the freehold purchase and whilst it may be useful to ensure all tenants are aware of the proposed acquisition, there is at present no legal obligation to do so.
So what does this mean?
Quite simply, providing the application for the purchase of the freehold is supported by the correct number of participants, the remainder of the leaseholders can effectively be “blocked” from the process.
If this is true, what is there then to stop the remaining tenants serving a separate notice ascertaining their rights to exercise the right to collectively purchase from the tenants that have just bought the freehold?
Answer: Absolutely nothing providing there are sufficient numbers to support the claim! (at least until after the initial notice of claim no longer carries force).
HEALTH WARNING!
Whilst it is harder to envisage such a situation in larger blocks due to the number of participating tenants that need to be obtained, there is much larger scope for freeholds to “ping-pong” between tenants in much smaller blocks.
This can lead to potentially disastrous consequences not only for the relations between tenants within the block they live but also for management issues on a longer term basis.
Whilst the requirements under the right to manage provisions on the face of it seem quite onerous in that there is a mandatory requirement before serving the notice of claim to inviting all qualifying tenants to take part, if applied to enfranchisement claims, would this avoid the potentially disastrous consequences where freeholds “ping-pong”?
Is it time that the Right to Enfranchise Company provisions under the Commonhold and Leasehold Reform Act 2002 are actually brought into force?
Yashmin Mistry , Partner, JPC Law