In certain limited circumstances, owners of long leases of properties can 'enlarge' their leasehold interest into a freehold interest. In order to qualify, the lease must have been granted for an original term of at least 300 years, there must be at least 200 years left to run, the rent must be a peppercorn or of no monetary value, and the lease cannot contain a right for the landlord to forfeit the lease by re-entry in the event of a breach of covenant.
While the ability to displace the previous freehold owner seems surprising, it is relatively rare to find a lease that will fit the criteria, particularly because modern long leases are rarely granted for a term exceeding 300 years and will rarely exclude a right of re-entry for breach of covenant.
The Land Registry recently announced an intended change in practice when dealing with applications to enlarge registered leasehold titles. The intention was that the existing freehold title would be retained, and a new freehold title of the same property would be granted to the existing leaseholder. This suggestion that two freehold titles would then exist in relation to the same property has caused concern both at an academic level but also a practical one of causing confusion. A Land Registry search would presumably reveal the two freehold titles, but the title entries may well not be clear for example as to which freehold title has the capacity to grant leases.
The Land Registry had intended to implement its new policy from 11 June, but following consultation has decided to postpone this to consider issues and concerns raised further. While there are relatively few properties that can take advantage of the right to enlarge the lease into a freehold title, it will be interesting to see whether the Land Registry realises the potential issues and change its mind on the suggested policy of retaining the existing freehold title.