Renters' Rights Act 2025, Phase 1 commencement
Transition readiness pack
England

Leasehold Law

Collective Enfranchisement for Landlords UK

LRHUDA 1993 Part I: qualifying buildings (25% commercial floor area limit), qualifying leaseholders (2/3 long leases; 50% participation), RTE company procedure, price formula (capitalised ground rent; deferment value; marriage value), LFRA 2024 abolition of marriage value, and implications for freehold landlords who cannot refuse a valid claim.

11 min readUpdated 7 June 2026Last reviewed: 17 May 2026leaseholdenfranchisementcollective-enfranchisementfreehold

Qualifying Buildings

Building must be self-contained, contain at least two qualifying flats, and not exceed 25% non-residential floor area. LFRA 2024 will raise this threshold once commenced. Resident landlord exception applies only where freeholder lives in one flat AND building has 4 or fewer flats.

Qualifying Leaseholders and Participation

Qualifying tenant: long leaseholder (lease originally >21 years). At least 2/3 of all flats must be held by qualifying tenants; at least 50% of those must participate. A leaseholder holding >2 flats in the same building cannot participate. LFRA 2024 abolishes the 2-year ownership requirement (not yet commenced).

Procedure

Participating leaseholders form an RTE company and serve an initial notice on the freeholder specifying the building and offered purchase price. Freeholder must serve counter-notice within 2 months — admitting the right or disputing it. If disputed, leaseholders apply to County Court. If no price agreement within 6 months, either party applies to FTT for determination.

Price — Valuation and LFRA 2024

Price formula: capitalised ground rent income + deferment value (reversionary interest at Sportelli deferment rate 5.25% for flats) + marriage value (where lease unexpired term <80 years; split 50/50). LFRA 2024 abolishes marriage value and prescribes capitalisation and deferment rates — most valuation provisions not yet in force.

Implications for Freehold Landlords

A freeholder cannot refuse a valid claim. Counter-notice options: dispute qualification; negotiate price; challenge at FTT. Freeholder receives market value per the formula; loses ground rent, management rights, and reversion. Leaseholders pay freeholder's reasonable legal and valuation costs of processing a valid claim (LRHUDA 1993 s.33).

Frequently asked questions

Can I refuse collective enfranchisement?+

No — if qualifying conditions are met and procedure followed correctly, the freeholder cannot refuse. You can dispute whether the building qualifies, negotiate the price, or apply to the FTT if no agreement is reached.

What does LFRA 2024 change for enfranchisement?+

The Leasehold and Freehold Reform Act 2024 abolishes marriage value on enfranchisement claims, removes the 2-year ownership requirement, and prescribes deferment and capitalisation rates. Most provisions require commencement orders — not yet in force as of June 2026.

How many leaseholders must participate?+

At least two-thirds of all flats must be held by long leaseholders (qualifying tenants), and at least 50% of those qualifying tenants must participate. In a 10-flat building: at least 7 must be long leaseholders; at least 5 must join the claim.

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