Leasehold Reform, Housing and Urban Development Act 1993

Preliminary

1The right to collective enfranchisement

(1)This Chapter has effect for the purpose of conferring on qualifying tenants of flats contained in premises to which this Chapter applies on the relevant date the right, exercisable subject to and in accordance with this Chapter, to have the freehold of those premises acquired on their behalf—

(a)by a person or persons appointed by them for the purpose, and

(b)at a price determined in accordance with this Chapter;

and that right is referred to in this Chapter as “the right to collective enfranchisement”.

(2)Where the right to collective enfranchisement is exercised in relation to any such premises (“the relevant premises”)—

(a)the qualifying tenants by whom the right is exercised shall be entitled, subject to and in accordance with this Chapter, to have acquired, in like manner, the freehold of any property which is not comprised in the relevant premises but to which this paragraph applies by virtue of subsection (3); and

(b)section 2 has effect with respect to the acquisition of leasehold interests to which paragraph (a) or (b) of subsection (1) of that section applies.

(3)Subsection (2)(a) applies to any property if the freehold of it is owned by the person who owns the freehold of the relevant premises and at the relevant date either—

(a)it is appurtenant property which is demised by the lease held by a qualifying tenant of a flat contained in the relevant premises; or

(b)it is property which any such tenant is entitled under the terms of the lease of his flat to use in common with the occupiers of other premises (whether those premises are contained in the relevant premises or not).

(4)The right of acquisition in respect of the freehold of any such property as is mentioned in subsection (3)(b) shall, however, be taken to be satisfied with respect to that property if, on the acquisition of the relevant premises in pursuance of this Chapter, either—

(a)there are granted by the freeholder—

(i)over that property, or

(ii)over any other property,

such permanent rights as will ensure that thereafter the occupier of the flat referred to in that provision has as nearly as may be the same rights as those enjoyed in relation to that property on the relevant date by the qualifying tenant under the terms of his lease; or

(b)there is acquired from the freeholder the freehold of any other property over which any such permanent rights may be granted.

(5)A claim by qualifying tenants to exercise the right to collective enfranchisement may be made in relation to any premises to which this Chapter applies despite the fact that those premises are less extensive than the entirety of the premises in relation to which those tenants are entitled to exercise that right.

(6)Any right or obligation under this Chapter to acquire any interest in property shall not extend to underlying minerals in which that interest subsists if—

(a)the owner of the interest requires the minerals to be excepted, and

(b)proper provision is made for the support of the property as it is enjoyed on the relevant date.

(7)In this section—

• “appurtenant property”, in relation to a flat, means any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the flat;

• “the freeholder” means the person who owns the freehold of the relevant premises;

• “the relevant premises” means any such premises as are referred to in subsection (2).

(8)In this Chapter “the relevant date”, in relation to any claim to exercise the right to collective enfranchisement, means the date on which notice of the claim is given under section 13.

2Acquisition of leasehold interests

(1)Where the right to collective enfranchisement is exercised in relation to any premises to which this Chapter applies (“the relevant premises”), then, subject to and in accordance with this Chapter—

(a)there shall be acquired on behalf of the qualifying tenants by whom the right is exercised every interest to which this paragraph applies by virtue of subsection (2); and

(b)those tenants shall be entitled to have acquired on their behalf any interest to which this paragraph applies by virtue of subsection (3);

and any interest so acquired on behalf of those tenants shall be acquired in the manner mentioned in paragraphs (a) and (b) of section 1(1).

(2)Paragraph (a) of subsection (1) above applies to the interest of the tenant under any lease which is superior to the lease held by a qualifying tenant of a flat contained in the relevant premises.

(3)Paragraph (b) of subsection (1) above applies to the interest of the tenant under any lease (not falling within subsection (2) above) under which the demised premises consist of or include—

(a)any common parts of the relevant premises, or

(b)any property falling within section 1(2)(a) which is to be acquired by virtue of that provision,

where the acquisition of that interest is reasonably necessary for the proper management or maintenance of those common parts, or (as the case may be) that property, on behalf of the tenants by whom the right to collective enfranchisement is exercised.

(4)Where the demised premises under any lease falling within subsection (2) or (3) include any premises other than—

(a)a flat contained in the relevant premises which is held by a qualifying tenant,

(b)any common parts of those premises, or

(c)any such property as is mentioned in subsection (3)(b),

the obligation or (as the case may be) right under subsection (1) above to acquire the interest of the tenant under the lease shall not extend to his interest under the lease in any such other premises.

(5)Where the qualifying tenant of a flat is a public sector landlord and the flat is let under a secure tenancy, then if—

(a)the condition specified in subsection (6) is satisfied, and

(b)the lease of the qualifying tenant is directly derived out of a lease under which the tenant is a public sector landlord,

the interest of that public sector landlord as tenant under that lease shall not be liable to be acquired by virtue of subsection (1) to the extent that it is an interest in the flat or in any appurtenant property; and the interest of a public sector landlord as tenant under any lease out of which the qualifying tenant’s lease is indirectly derived shall, to the like extent, not be liable to be so acquired (so long as the tenant under every lease intermediate between that lease and the qualifying tenant’s lease is a public sector landlord).

(6)The condition referred to in subsection (5)(a) is that either—

(a)the qualifying tenant is the immediate landlord under the secure tenancy, or

(b)he is the landlord under a lease which is superior to the secure tenancy and the tenant under that lease, and the tenant under every lease (if any) intermediate between it and the secure tenancy, is also a public sector landlord;

and in subsection (5) “appurtenant property” has the same meaning as in section 1.

(7)In this section “the relevant premises” means any such premises as are referred to in subsection (1).

3Premises to which this Chapter applies

(1)Subject to section 4, this Chapter applies to any premises if—

(a)they consist of a self-contained building or part of a building and the freehold of the whole of the building or of that part of the building is owned by the same person;

(b)they contain two or more flats held by qualifying tenants; and

(c)the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.

(2)For the purposes of this section a building is a self-contained building if it is structurally detached, and a part of a building is a self-contained part of a building if—

(a)it constitutes a vertical division of the building and the structure of the building is such that that part could be redeveloped independently of the remainder of the building; and

(b)the relevant services provided for occupiers of that part either—

(i)are provided independently of the relevant services provided for occupiers of the remainder of the building, or

(ii)could be so provided without involving the carrying out of any works likely to result in a significant interruption in the provision of any such services for occupiers of the remainder of the building;

and for this purpose “relevant services” means services provided by means of pipes, cables or other fixed installations.

4Premises excluded from right

(1)This Chapter does not apply to premises falling within section 3(1) if—

(a)any part or parts of the premises is or are neither—

(i)occupied, or intended to be occupied, for residential purposes, nor

(ii)comprised in any common parts of the premises; and

(b)the internal floor area of that part or of those parts (taken together) exceeds 10 per cent. of the internal floor area of the premises (taken as a whole).

(2)Where in the case of any such premises any part of the premises (such as, for example, a garage, parking space or storage area) is used, or intended for use, in conjunction with a particular dwelling contained in the premises (and accordingly is not comprised in any common parts of the premises), it shall be taken to be occupied, or intended to be occupied, for residential purposes.

(3)For the purpose of determining the internal floor area of a building or of any part of a building, the floor or floors of the building or part shall be taken to extend (without interruption) throughout the whole of the interior of the building or part, except that the area of any common parts of the building or part shall be disregarded.

(4)This Chapter does not apply to premises falling within section 3(1) if the premises are premises with a resident landlord and do not contain more than four units.

5Qualifying tenants

(1)Subject to the following provisions of this section, a person is a qualifying tenant of a flat for the purposes of this Chapter if he is tenant of the flat under a long lease at a low rent.

(2)Subsection (1) does not apply where—

(a)the lease is a business lease; or

(b)the immediate landlord under the lease is a charitable housing trust and the flat forms part of the housing accommodation provided by it in the pursuit of its charitable purposes; or

(c)the lease was granted by sub-demise out of a superior lease other than a long lease at a low rent, the grant was made in breach of the terms of the superior lease, and there has been no waiver of the breach by the superior landlord;

and in paragraph (b) “charitable housing trust” means a housing trust within the meaning of the [1985 c. 68.] Housing Act 1985 which is a charity within the meaning of the [1993 c. 10.] Charities Act 1993.

(3)No flat shall have more than one qualifying tenant at any one time.

(4)Accordingly—

(a)where a flat is for the time being let under two or more leases to which subsection (1) applies, any tenant under any of those leases which is superior to that held by any other such tenant shall not be a qualifying tenant of the flat for the purposes of this Chapter; and

(b)where a flat is for the time being let to joint tenants under a lease to which subsection (1) applies, the joint tenants shall (subject to paragraph (a) and subsection (5)) be regarded for the purposes of this Chapter as jointly constituting the qualifying tenant of the flat.

(5)Where apart from this subsection—

(a)a person would be regarded for the purposes of this Chapter as being (or as being among those constituting) the qualifying tenant of a flat contained in any particular premises consisting of the whole or part of a building, but

(b)that person would also be regarded for those purposes as being (or as being among those constituting) the qualifying tenant of each of two or more other flats contained in those premises,

then, whether that person is tenant of the flats referred to in paragraphs (a) and (b) under a single lease or otherwise, there shall be taken for those purposes to be no qualifying tenant of any of those flats.

(6)For the purposes of subsection (5) in its application to a body corporate any flat let to an associated company (whether alone or jointly with any other person or persons) shall be treated as if it were so let to that body; and for this purpose “associated company” means another body corporate which is (within the meaning of section 736 of the [1985 c. 6.] Companies Act 1985) that body’s holding company, a subsidiary of that body or another subsidiary of that body’s holding company.

6Qualifying tenants satisfying residence condition

(1)For the purposes of this Chapter a qualifying tenant of a flat satisfies the residence condition at any time when the condition specified in subsection (2) is satisfied with respect to him.

(2)That condition is that the tenant has occupied the flat as his only or principal home—

(a)for the last twelve months, or

(b)for periods amounting to three years in the last ten years,

whether or not he has used it also for other purposes.

(3)For the purposes of subsection (2)—

(a)any reference to the tenant’s flat includes a reference to part of it; and

(b)it is immaterial whether at any particular time the tenant’s occupation was in right of the lease by virtue of which he is a qualifying tenant or in right of some other lease or otherwise;

but any occupation by a company or other artificial person, or (where the tenant is a corporation sole) by the corporator, shall not be regarded as occupation for the purposes of that subsection.

(4)In the case of a lease held by joint tenants—

(a)the condition specified in subsection (2) need only be satisfied with respect to one of the joint tenants; and

(b)subsection (3) shall apply accordingly (the reference to the lease by virtue of which the tenant is a qualifying tenant being read for this purpose as a reference to the lease by virtue of which the joint tenants are a qualifying tenant).

7Meaning of “long lease”

(1)In this Chapter “long lease” means (subject to the following provisions of this section)—

(a)a lease granted for a term of years certain exceeding 21 years, whether or not it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise;

(b)a lease for a term fixed by law under a grant with a covenant or obligation for perpetual renewal (other than a lease by sub-demise from one which is not a long lease) or a lease taking effect under section 149(6) of the [1925 c. 20.] Law of Property Act 1925 (leases terminable after a death or marriage);

(c)a lease granted in pursuance of the right to buy conferred by Part V of the [1985 c. 68.] Housing Act 1985 or in pursuance of the right to acquire on rent to mortgage terms conferred by that Part of that Act; or

(d)a shared ownership lease, whether granted in pursuance of that Part of that Act or otherwise, where the tenant’s total share is 100 per cent.

(2)A lease terminable by notice after a death or marriage is not to be treated as a long lease for the purposes of this Chapter if—

(a)the notice is capable of being given at any time after the death or marriage of the tenant;

(b)the length of the notice is not more than three months; and

(c)the terms of the lease preclude both—

(i)its assignment otherwise than by virtue of section 92 of the Housing Act 1985 (assignments by way of exchange), and

(ii)the sub-letting of the whole of the premises comprised in it.

(3)Where the tenant of any property under a long lease at a low rent, on the coming to an end of that lease, becomes or has become tenant of the property or part of it under any subsequent tenancy (whether by express grant or by implication of law), then that tenancy shall be deemed for the purposes of this Chapter (including any further application of this subsection) to be a long lease irrespective of its terms.

(4)Where—

(a)a lease is or has been granted for a term of years certain not exceeding 21 years, but with a covenant or obligation for renewal without payment of a premium (but not for perpetual renewal), and

(b)the lease is or has been renewed on one or more occasions so as to bring to more than 21 years the total of the terms granted (including any interval between the end of a lease and the grant of a renewal),

this Chapter shall apply as if the term originally granted had been one exceeding 21 years.

(5)References in this Chapter to a long lease include—

(a)any period during which the lease is or was continued under Part I of the [1954 c. 56.] Landlord and Tenant Act 1954 or under Schedule 10 to the [1989 c. 42.] Local Government and Housing Act 1989;

(b)any period during which the lease was continued under the [1951 c. 38.] Leasehold Property (Temporary Provisions) Act 1951.

(6)Where in the case of a flat there are at any time two or more separate leases, with the same landlord and the same tenant, and—

(a)the property comprised in one of those leases consists of either the flat or a part of it (in either case with or without any appurtenant property), and

(b)the property comprised in every other lease consists of either a part of the flat (with or without any appurtenant property) or appurtenant property only,

then in relation to the property comprised in such of those leases as are long leases, this Chapter shall apply as it would if at that time—

(i)there were a single lease of that property, and

(ii)that lease were a long lease;

but this subsection has effect subject to the operation of subsections (3) to (5) in relation to any of the separate leases.

(7)In this section—

• “appurtenant property” has the same meaning as in section 1;

• “shared ownership lease” means a lease—

  (a)

  granted on payment of a premium calculated by reference to a percentage of the value of the demised premises or the cost of providing them, or

  (b)

  under which the tenant (or his personal representatives) will or may be entitled to a sum calculated by reference, directly or indirectly, to the value of those premises; and

• “total share”, in relation to the interest of a tenant under a shared ownership lease, means his initial share plus any additional share or shares in the demised premises which he has acquired.

8Leases at a low rent

(1)For the purposes of this Chapter a lease of a flat is a lease at a low rent if either no rent was payable under it in respect of the flat during the initial year or the aggregate amount of rent so payable during that year did not exceed the following amount, namely—

(a)where the lease was entered into before 1st April 1963, two-thirds of the letting value of the flat (on the same terms) on the date of the commencement of the lease;

(b)where—

(i)the lease was entered into either on or after 1st April 1963 but before 1st April 1990, or on or after 1st April 1990 in pursuance of a contract made before that date, and

(ii)the flat had a rateable value at the date of the commencement of the lease or else at any time before 1st April 1990,

two-thirds of the rateable value of the flat on the appropriate date; or

(c)in any other case, £1,000 if the flat is in Greater London or £250 if elsewhere.

(2)For the purposes of subsection (1)—

(a)“the initial year”, in relation to any lease, means the period of one year beginning with the date of the commencement of the lease;

(b)“the appropriate date” means the date of the commencement of the lease or, if the flat in question did not have a rateable value on that date, the date on which the flat first had a rateable value;

(c)section 25(1), (2) and (4) of the [1977 c. 42.] Rent Act 1977 (rateable value etc.) shall apply, with any necessary modifications, for the purpose of determining the amount of the rateable value of a flat on a particular date;

(d)“rent” means rent reserved as such, and there shall be disregarded any part of the rent expressed to be payable in consideration of services to be provided, or of repairs, maintenance or insurance to be effected by the landlord, or to be payable in respect of the cost thereof to the landlord under the lease or a superior landlord; and

(e)there shall be disregarded any term of the lease providing for suspension or reduction of rent in the event of damage to property demised, or for any penal addition to the rent in the event of a contravention of or non-compliance with the terms of the lease or an agreement collateral thereto.

(3)In subsection (1)(a) above the reference to letting value shall be construed in like manner as, under the law of England and Wales, the reference to letting value is to be construed where it appears in the proviso to section 4(1) of the [1967 c. 88.] Leasehold Reform Act 1967 (meaning of “low rent”).

(4)Accordingly, in determining the letting value of a flat at any time for the purposes of subsection (1)(a) above, regard shall be had to whether, and (if so) in what amount, a premium might then have been lawfully demanded as the whole or part of the consideration for the letting.

(5)Where, by virtue of section 7(4), a lease which has been renewed on one or more occasions is to be treated as a long lease for the purposes of this Chapter, then for the purpose of determining under this section whether it is for those purposes a long lease at a low rent—

(a)the lease shall be deemed to have been entered into on the date of the last renewal of the lease; and

(b)that date shall be deemed to be the date of the commencement of the lease.

(6)Subsection (2)(a) above shall have effect in relation to any shared ownership lease falling within section 7(1)(d) as if the reference to the date of commencement of the lease were a reference to the date on which the tenant’s total share became 100 per cent; and section 7(7) shall apply for the interpretation of this subsection.

(7)In this section any reference to a flat let under a lease includes a reference to any appurtenant property (within the meaning of section 1) which on the relevant date is let with the flat to the tenant under the lease.

9The reversioner and other relevant landlords for the purposes of this Chapter

(1)Where, in connection with any claim to exercise the right to collective enfranchisement in relation to any premises, it is not proposed to acquire any interests other than—

(a)the freehold of the premises, or

(b)any other interests of the person who owns the freehold of the premises,

that person shall be the reversioner in respect of the premises for the purposes of this Chapter.

(2)Where, in connection with any such claim, it is proposed to acquire interests of persons other than the person who owns the freehold of the premises to which the claim relates, then—

(a)the reversioner in respect of the premises shall for the purposes of this Chapter be the person identified as such by Part I of Schedule 1 to this Act; and

(b)the person who owns the freehold of the premises, and every person who owns any leasehold interest which it is proposed to acquire under or by virtue of section 2(1)(a) or (b), shall be a relevant landlord for those purposes.

(3)Subject to the provisions of Part II of Schedule 1, the reversioner in respect of any premises shall, in a case to which subsection (2) applies, conduct on behalf of all the relevant landlords all proceedings arising out of any notice given with respect to the premises under section 13 (whether the proceedings are for resisting or giving effect to the claim in question).

(4)Schedule 2 (which makes provision with respect to certain special categories of landlords) has effect for the purposes of this Chapter.

10Premises with a resident landlord

(1)For the purposes of this Chapter any premises falling within section 3(1) are at any time premises with a resident landlord if—

(a)the premises are not, and do not form part of, a purpose-built block of flats; and

(b)the freeholder, or an adult member of the freeholder’s family—

(i)at that time occupies a flat contained in the premises as his only or principal home, and

(ii)has so occupied such a flat throughout a period of not less than twelve months ending with that time.

(2)Where any premises falling within section 3(1) would at any time (“the relevant time”) be premises with a resident landlord but for the fact that subsection (1)(b)(ii) above does not apply, the premises shall nevertheless be treated for the purposes of this Chapter as being at that time premises with a resident landlord if—

(a)immediately before the date when the freeholder acquired his interest in the premises the premises were (or, had this Chapter then been in force, would have been) such premises for the purposes of this Chapter; and

(b)the freeholder, or an adult member of the freeholder’s family—

(i)entered into occupation of a flat contained in the premises within the period of 28 days beginning with that date, and

(ii)has occupied such a flat as his only or principal home throughout the period beginning with the time when he so entered into occupation and ending with the relevant time.

(3)In paragraph (b) of each of subsections (1) and (2) any reference to a flat includes a reference to a unit (other than a flat) which is used as a dwelling.

(4)Where the freehold interest in any premises is held on trust, subsections (1) and (2) shall apply as if, in paragraph (b) of each of those subsections, any reference to the freeholder were instead a reference to a person having an interest under the trust (whether or not also a trustee).

(5)For the purposes of this section a person is an adult member of another’s family if that person is—

(a)the other’s wife or husband; or

(b)a son or daughter or a son-in-law or daughter-in-law of the other, or of the other’s wife or husband, who has attained the age of 18; or

(c)the father or mother of the other, or of the other’s wife or husband;

and in paragraph (b) any reference to a person’s son or daughter includes a reference to any stepson or stepdaughter of that person, and “son-in-law” and “daughter-in-law” shall be construed accordingly.

(6)In this section—

• “the freeholder”, in relation to any premises, means the person who owns the freehold of the premises;

• “purpose-built block of flats” means a building which as constructed contained two or more flats.