The Leasehold Reform Housing and Urban Development Act has finally received the Royal Assent, and became operative on 1 November 1993.

Although its main innovations relate to flats, c.III of the Act contains what are likely to be far reaching amendments of the Leasehold Reform Act 1967.

The main change will be the abolition of the rateable value limits which have effectively excluded the owners of most higher value houses from the right to enfranchise under the 1967 Act, and the extension of the 'low rent' test.This will mean that the owners of higher value houses -- who until now have been unable to enfranchise under the 1967 Act because of the rateable value limits, but who fulfil all the other qualifying conditions under that Act -- should soon have the right to enfranchise under the new legislation.

For many people that will be a right well worth pursuing.There are a number of qualifying conditions under the 1967 Act.

By way of a brief summary, the Act gives certain tenants of certain houses held on long tenancies at low rents the right to purchase the freehold or claim an extension of the lease.

The rights given under the 1967 Act will only apply to a house all or part of which is occupied by the tenant as his or her only or main residence.'House' includes any building designed or adapted for living in and reasonably called a house.

Specifically excluded is a house which is not structurally detached, and a material part of which lies above or below a part of the structure not comprised in the house, ie if any adjoining property underhangs or overhangs any part of the house.

A building divided horizontally into flats may be a house, but the individual flats are not houses.'Long tenancy' means a tenancy granted for a fixed term of more than 21 years.

The low rent test is quite complex, but is extended under the new legislation.

It should, however, cover most houses where only a low ground rent is payable.The qualifying period of occupancy requires that the tenant must have occupied the house as his or her only or main residence for the last three years, or for periods amounting to three years in the last ten years.There are several important points to be noted.

The benefit of a tenant's notice of his or her desire to acquire the freehold, or an extended lease under the 1967 Act, can be assigned with the house.

Accordingly, the purchaser of a house can rely on the occupation of his or her vendor, if the vendor serves an appropriate notice before exchange of contracts for the sale and assigns the benefit of it to the purchaser.

This could obviously be of importance and interest to a purchaser who will not him or herself be able to fulfil the three year main residence requirement.Under the 1967 Act, the tenant has the choice of purchasing the freehold or a 50-year lease extension.

Lease-holders who only qualify under the 1967 Act as amended by the new legislation, ie who currently fall outside the Act because of the existing rateable value limits and narrower low rent test, will only have a right to purchase the freehold, not the alternative option of a lease extension.Another important extension of the 1967 Act that will be effected as a result of the new legislation relates to the Crown Estate.

The Crown is not bound by the provisions of that statute, and accordingly Crown tenants do not have any rights under the 1967 Act.

Although the same principle will apply to the new legislation, the Crown has specifically stated that it is its intention to grant 'grace and favour' rights equivalent to those that will exist under the new legislation in respect of non-Crown property.

This will give many Crown tenants their first opportunity to enfranchise.The new legislation specifically provides that the price to be paid for enfranchisement of houses under these extended provisions will include at least one half of the marriage value.

In simple terms, this is the increased value -- over and above the combined value of the tenant's existing interest and the value of the reversionary interest being acquired from the landlord -- that arises by merging the two together.

The proportion of the marriage value payable by the tenant can be anything from half up to the full amount, and in each case it will be a valuation point as to the proportion of marriage value payable by the tenant within these parameters.The price payable, in broad terms, will usually be the value of the landlord's interest to be acquired, ie freehold or extended lease, plus the relevant share of marriage value determined in each case, plus all the landlord's legal and valuation costs.Under s.32 of the 1967 Act there is no right to enfranchise certain properties of particular historic interest or natural beauty.

This will accordingly exclude, for example, much of the Crown Estate in areas such as Regent's Park in London.

However, in relation to at least some of those areas including Regent's Park, the Crown are proposing to give 'grace and favour' rights to apply for a lease extens ion of up to 90 years so, once again, opportunities may arise.It is not yet clear whether the method of calculating the price for a 'grace and favour' enfranchisement or lease extension by the Crown will be carried out under the statutory provisions set out in the new legislation or, alternatively, whether the Crown will only sell if the price can be determined by agreement with them.

Their current intention appears to be to follow the statutory provisions wherever possible.

However, reading between the lines, it is likely that they will divert from those provisions if a major dispute arises over the price calculation.

In view of the fact that the Crown Estate will be giving 'grace and favour' rather than statutory rights, it is extremely likely that they will be looking for payment of 100% of the marriage value.The new legislation should, in addition to the innovative rights given to flat owners, give a new lease of life to the Leasehold Reform Act 1967.

The statutory provisions are, however, extremely complex, and any leaseholders of houses wishing to take advantage of them should seek detailed legal and valuation advice in each case.