Leasehold and Freehold Reform Act 2024

Prospective

Assumptions in all cases: intermediate leases merged and no marriage or hope value E+W

17 (1) This paragraph applies when determining the market value of the relevant freehold (on any freehold enfranchisement) or notional lease (on any lease extension).

(2) Assumption 1: it must be assumed that the following occurred immediately before the valuation date—

(a) in the case of the transfer of a freehold house under the LRA 1967—

(i) the merger with the freehold of any lease which the claimant will acquire as part of the statutory transfer;

(ii) the surrender of any lease of the currently leased premises that belongs to the qualifying tenant and is superior to the current lease;

(b) in the case of the grant of an extended lease of a house under the LRA 1967—

(i) the merger with the interest of the person granting the statutory lease of any lease which will be deemed to be surrendered and regranted as part of the statutory grant;

(ii) the surrender of any lease that will be surrendered under paragraph 11(1) of Schedule 1 to the LRA 1967 as part of the statutory grant;

(c) in the case of the collective enfranchisement of a building under the LRHUDA 1993, the merger with the freehold of any lease which the claimant will acquire as part of the enfranchisement;

(d) in the case of the grant of a new lease of a flat under the LRHUDA 1993—

(i) the merger with the interest of the person granting the statutory lease of any lease which will be deemed to be surrendered and regranted as part of the statutory grant;

(ii) the surrender of any lease that will be surrendered under paragraph 10(3) of Schedule 11 to the LRHUDA 1993 as part of the statutory grant.

(3) Assumption 2: it must be assumed (having made assumption 1) that—

(a) the claimant is not seeking, and will never seek, to acquire the relevant freehold or notional lease;

(b) in the case of a collective enfranchisement, the nominee purchaser is not seeking, and will never seek, to acquire the relevant freehold;

(c) any persons holding any leasehold interests in the newly owned premises or any part of those premises (including, in the case of a collective enfranchisement, the qualifying tenants) are not seeking, and will never seek—

(i) to acquire the relevant freehold or notional lease, or

(ii) to dispose of their leasehold interests;

(d) in the case of a lease extension, the freeholder is not seeking, and will never seek, to acquire the notional lease or to dispose of their freehold interest; and

(e) in the case of a freehold enfranchisement where there are two or more freeholders, none of them is seeking, or will ever seek, to acquire any of the relevant freehold which they do not already own.

Accordingly, no marriage or hope value is payable.

(4) This paragraph does not prevent other assumptions from being made when determining the market value as long as they are consistent with assumptions 1 and 2 and the other provisions of this Schedule.

(5) In this paragraph “claimant” means the person or persons making the claim under the LRA 1967 or the LRHUDA 1993 for the freehold enfranchisement or lease extension.

Commencement Information

I1 Sch. 4 para. 17 not in force at Royal Assent, see s. 124(3)