Between 1967 and 2002 a number of new rights were granted to give leaseholders the power to manage their own affairs, these new rights help to re-balance the relationship between landlord (freeholder) and tenant (leaseholder). The new rights are collective, in that they only apply to a majority/group of qualifying tenants acting together, for example; Leasehold enfranchisement is not an option for an individual flat owner acting alone (as an individual, your only option is to Extend your Lease). However a group of leaseholders within a block of flats may collectively enfranchise, see below.
A word of caution here, because such collective actions need to be properly managed; i.e. by an individual (or couple) with the ability to bring together a diverse set of leaseholders/tenants and keep them focused on the task in hand - finding someone with the skills, enthusiasm and time to take on this role will be difficult.
I would also suggest that the human element involved in such things as getting tenants to show-up for meetings and getting cash out of people to pay for legitimate costs, is much more difficult than you might think; for those reasons I would be wary of launching any of the procedures described below - unless I was 100% confident that the other tenants in the group were willing & able to support the endeavour.
To be positive for a moment, if you have a group of long-term, (perhaps older) leaseholders, who can afford a part-time project manager, or a retired tenant who can take on a management role, then you may have a better chance of seeing one of these actions through to a successful conclusion, moreover, the fact that these options even exist (regardless of whether or not they are likely to be used) should serve to keep your landlord honest and encourage him to be diligent and to take his leaseholder's concerns seriously.
Collective Enfranchisement
(Leasehold Reform Housing and Urban Development Act 1993, as amended by the Leasehold Reform Act 2002)
Collective Leasehold Enfranchisement is the right to compel (force) the landlord to sell the freehold (i.e. the building & land) to qualifying leaseholders. A group of leaseholders can nominate a purchaser or (more usually) create a Company through which they can jointly make the purchase. Although the conditions and procedure for such a purchase are complex (see link below), there is no requirement for leaseholders to prove mismanagement by the landlord, therefore this action can be taken at any time of the leaseholders choosing. Collective Enfranchisement is a big step for leaseholders, encompassing management of the day-to-day running of the property, collection of service charges, dealing with problem tenants, etc. The benefits are that participating leaseholders have full control of everything and are free to extend their leases to 999 years for £1 (i.e. a token sum).
For more on CE see: Collective Enfranchisement
Right to Manage
(Leasehold Reform Act 2002)
Leaseholders have the right to take control of the running & maintenance of their building (and grounds), i.e. to effectively force the transfer of the landlord’s management functions to a special company set up by them – called a Right to Manage (RtM) Company. Originally this right was granted as a means of dealing with negligent or absentee landlords, however RtM can be exercised at any time, regardless of whether the landlord is good, bad or indifferent. In order to qualify for RtM at least half the qualifying tenants need to be part of the RtM Company. Under RtM, tenants' service charges are paid directly into a fund controlled by the RtM company, leaseholders participate in the company and control how their service charges are spent and the priorities in terms of maintaining the building. A managing agent is sometimes employed to deal with day-to-day administration issues.
For more on RtM see: Right to Manage
The Right of First Refusal
(Landlord and Tenant Act 1987 as amended by the Housing Act 1996)
Leaseholders have the option to buy the freehold (i.e. the building & land), should the landlord choose to sell his interest in the property, this is the Right of first Refusal (RFR). The landlord cannot be forced to sell under this Legislation, but if he chooses to sell, he must by law, first offer it to the leaseholders before offering it on the open market. A condition of the purchase is that at least half of the qualifying leaseholders must agree to the RFR buy-out in writing.
If the landlord sells the freehold without providing the Right of First Refusal, the tenants can serve a notice on the new owner demanding details of the transaction, including the price paid; they can then take action to force the new owner to sell to them at the price he paid.
For more on RFR see: Right of First Refusal
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