Case Law

The Commonhold and Leasehold Reform Act 2002 also introduced various amendments to the right to collective enfranchisement. The idea behind the reforms was that the right would have to be exercised through a Right to Enfranchise company (RTE Company) that all qualifying tenants would have the right to join. The relevant provisions of the 2002 Act have not yet been brought into force; in May 2009 the Government accepted that there were serious flaws in the legislation and consulted on the way forward (Right to Enfranchise (RTE) Provisions: a consultation, CLG, May 2009). Following the conclusion of the consultation period, the Government has announced that it does not now plan to bring the reforms into force (Right to Enfranchise (RTE) Provisions - consultation: Summary of responses, CLG, March 2010).

Shared ownership leases usually provide for the tenant to acquire an initial interest in the property and then to purchase the remainder over a period of time. In appropriate circumstances it may be possible for someone to be a “shared ownership” tenant and, at the same time, be entitled to exercise a right to enfranchise under the Leasehold Reform Act 1967. That could mean that they can acquire the freehold of their house at – potentially – a much lower price. Schedule 4A of the 1967 Act sought to prevent that from happening by excluding shared ownership leases granted by certain public bodies and housing associations from the provisions of the 1967 Act. Paragraph 3A of Schedule 4A of the 1967 Act was inserted by s.301 Housing and Regeneration Act 2008 so as exclude certain shared ownership leases granted by any landlord in certain prescribed conditions. The intention was to stimulate the private sector interest in offering shared ownership leases. The  Housing (Shared Ownership Leases) (Exclusion from Leasehold Reform Act 1967) (England) Regulations 2009 set out those circumstances in which such a shared ownership lease is excluded from the scope of the 1967 Act. Paragraph 4A of Schedule 4A of the 1967 Act was likewise inserted by s.302, 2008 Act. It provides that certain areas of England and Wales may be treated as “protected areas” where houses (or types of houses) can be offered for sale on shared ownership leases and the enfranchisement provisions of the 1967 Act. The Housing (Right to Enfranchise) (Designated Protected Areas) (England) Order 2009 gives the (lengthy) list of areas where the right to enfranchise is now excluded in respect of shared ownership leases.The Housing and Regeneration Act 2008 (Commencement No. 6 and Transitional and Savings Provisions) Order 2009. The effect of this is, as of September 7, 2009:(a) s.300, 2008 Act will be in force, which repeals s.1(1)(a) 1967 Act. This provided that only houses at a low rent were capable of being enfranchised under the 1967 Act. Over the years that provision had gradually been relaxed and is now killed off in the interests of legal certainty;(c) ss.301 and 302, 2008 Act are in force. They’re discussed above.