Part 2 - Leasehold enfranchisement and extension Section 32: Right to require leaseback by freeholder after collective enfranchisement
Section 32 amends the LRHUDA 1993 to insert a new leaseback right for tenants participating in a collective enfranchisement claim. The participating tenants are able to require the freeholder to take a leaseback of particular units in the building. The tenants can thereby reduce the price payable for acquiring the freehold.
	Subsection (2) amends the LRHUDA 1993 to allow the participating tenants to state in their claim notice whether they are going to require the freeholder to take a leaseback. Subsections (3) and (4) make further amendments to establish the right of the participating tenants to require the freeholder to accept a leaseback.
	The details of the new right are set out in paragraphs 7A and 7B, inserted into Schedule 9 to the LRHUDA 1993 by subsection (5). The nominee purchaser, who conducts the claim on behalf of the participating tenants, can give the freeholder a notice requiring the freeholder to accept a leaseback of any flat or unit in the building, other than a flat let to a participating tenant. This right is similar to the power of the freeholder to require leasebacks under paragraph 5 of Schedule 9. But there are two significant differences.
	The nominee purchaser can require the freeholder to accept a leaseback of a flat let to a qualifying tenant, so long as the qualifying tenant is not participating in the claim. The freeholder cannot require a leaseback of a flat let to a qualifying tenant, regardless of whether the tenant is participating.
	Where the freehold reversion of a flat or unit is split, the nominee purchaser can require the freeholders to accept leasebacks of their respective parts of the property (under paragraph 7A(5)). Leasebacks must be granted of all parts of the flat or unit. A freeholder cannot insist on a leaseback of a unit if the freehold title is split.
	Paragraph 7A(3) deals with a link between leasebacks and the acquisition of intermediate leases. Under paragraph 2(5) of Schedule A1 to the LRHUDA 1993 (inserted by Section 31), the participating tenants can choose whether or not they acquire an intermediate lease of a flat let to a non-participating qualifying tenant. But if the tenants choose to acquire an intermediate lease, and so pay for some of the reversion to a flat, they cannot then avoid paying for the rest of the reversion by requiring the freeholder to take a leaseback of that flat.
	Paragraph 7B sets out the terms on which a leaseback must be granted. The same rules apply as apply to leasebacks required by the freeholder: the leaseback must comply with the requirements of Part 4 of Schedule 9 (unless the parties agree otherwise or the tribunal orders otherwise). A new sub-paragraph (2A) is inserted into paragraph 10 to deal with cases in which the freehold reversion of the flat or unit is split.