Enfranchisement Valuation
The method of valuation for enfranchisement is stipulated by legislation. It is technical, and the details of the way in which it is applied rest on precedent. We aim to settle the price during the negotiation period but, if this is not possible, the price is determined by adjudication, by an impartial organisation, the Leasehold Valuation Tribunal.
The Act aims to recompense the landlord on a basis that is fair to both parties, and provides that the notional profit that arises by bringing together the freehold and leasehold interests (the Marriage Value) is split equally between the landlord and the participant lessees, where the unexpired term of the lease is less than 80 years.
The division of the Marriage Value is one of the reasons why the increase in value resulting from enfranchisement should always be greater than the cost.
So... The 80 Year Rule.