Protecting the future

While not labelled placemaking, landed estates have been doing this for many years and the approach to enfranchisement and lease extensions forms a part of this.

Landlords have to see themselves as the custodian of an area, take a long term view and buy into a vision for it, such as the external appearance and atmosphere that they want to create. Landlords can then invest in the area to improve on this, for example with public realm works to improve public amenities (such as communal outside space) or external decorations. While a lot of this work will need to be done by the landlord themselves, there are areas that solicitors and other advisors can assist with.

In order to make an area desirable, the external appearance and use of properties is very important. Some landlords have protected themselves by putting in place an estate management scheme, which places requirements on the use and appearance of properties.

In the absence of a management scheme, landlords can put certain covenants permitted by the relevant legislation in a freehold transfer to provide protection. If all freeholders comply with the management scheme or transfer covenants then it ensures that the area maintains a “high end” feel and ensures that where a landlord has to sell a freehold, the value of their interest in neighbouring properties is better protected.

Consideration must be given to properties neighbouring the enfranchised property. It is therefore necessary to ensure that sufficient rights are reserved in any freehold transfer for the protection of neighbouring properties, particularly if specific rights are required (for example an emergency escape right). Again, this is to ensure that even though ownership of a freehold is not continuous, all surrounding properties receive sufficient protection for their future use.

Landlords can also maintain control of their properties by only granting interests that do not carry enfranchisement rights, particularly for their “trophy assets”. This may involve the landlord having to accept a lower premium receipt but this is part of taking a long term view. It is imperative that specialist legal advice is taken by the landlord at the outset before any such tenancies are granted.

It is important for landlords to protect their future interest in their properties, whether this is by ensuring that on a freehold sale there is sufficient protection in the transfer to ensure that the property will continue to be used in an appropriate way, or by taking steps to minimise the risk of enfranchisement in the first place.