Leasehold and Freehold Reform Act 2024

Additional assumptions on collective enfranchisements: repairing obligations, improvements & leasebacks

19 (1) This paragraph applies when determining the market value of the relevant freehold on a collective enfranchisement.

(2) Assumption 4: it must be assumed—

(a) as respects each current lease held by a relevant tenant, that the relevant tenant has complied with any tenant’s repairing obligations under the lease at the valuation date, so that the property has not been devalued by any breach of those obligations, and

(b) as respects each current lease held by a participating tenant, any improvements to the currently leased premises that have been made by any tenant under the lease (including the participating tenant) at the tenant’s own expense have not been made, unless they were required to be made by any tenant’s repairing obligations under the lease.

(3) Assumption 5: it must be assumed that the relevant freehold is subject to any leases to be granted in accordance with section 36 of the LRHUDA 1993.

(4) This paragraph does not prevent other assumptions from being made when determining the market value as long as they are consistent with assumptions 4 and 5 and the other provisions of this Schedule.

(5) In this paragraph—

• “relevant tenant” means—

  (a)

  a qualifying tenant, or

  (b)

  a person who is not a qualifying tenant, but only because of section 5(5) and (6) of the LRHUDA 1993 (a person who is the tenant of three or more flats in the building);

• “tenant’s repairing obligation”, in relation to a lease, means an obligation under the lease (however expressed or described) for the tenant under the lease to repair, maintain or decorate the currently leased premises.