How to Buy Your Freehold
A group of leaseholders in a block can come together to buy out the freehold as of right. This process is called Collective Enfranchisement.
Before you can start the process, you need to check if you qualify.
DO YOU QUALIFY FOR COLLECTIVE ENFRANCHISEMENT?
There are certain qualifying conditions which must be met in order to buy out your freehold as of right with the other leaseholders in the block.
To be a ‘qualifying tenant’ requires a ‘long lease’, that is a lease granted for an original term of at least 21 years.
There must be a minimum of two flats in the building
At least two-thirds of the flats in the building must be let to ‘qualifying tenants’
No more than 25% of the building’s internal floor area is to be for non-residential use
There are several other disqualifying factors which will affect your right to ‘enfranchise’ the freehold. Please get in touch with us today if you are unsure about your eligibility, and one of our advisers will be able to explain the issues.
If the building qualifies, in order to enfranchise the freehold at least 50% of the qualifying tenants in the block must participate in the freehold purchase.
Whichever flat owners decide to participate will pick up the cost of the non-participating flats, because they must acquire the entire freehold of the block. Normally, a company is formed by the participating flat owners and appointed the ‘nominated purchaser’. The process of this is something to discuss with your solicitor.
STEP 1: VALUATION
How do you know how much the freehold will cost, in total and per individual participant? Or, how much to offer? That’s where we come in.
We can undertake one of our comprehensive, professional valuation services; providing bespoke expert advice and giving you a valuation to accompany your offer to the freeholder, as well as a valuation for what we think you will ultimately pay for the freehold, post-negotiation stage.
Click here to see which one of our valuation reports best suit your needs.
STEP 2: THE INITIAL NOTICE
Once you have read our report, you will know what price to nominate in your initial notice of claim to the freeholder, as well as the likely amount you will end up paying once the negotiations have taken place. You should instruct a solicitor to prepare the Notice on your behalf, inserting the correct details regarding the nominee purchaser and offer premium.
This triggers the statutory procedure for acquiring the freehold, and puts a deadline in place for when the freeholder can respond by way of counter-offer in a Counter Notice.
There is the scope in some cases to make an offer to your freeholder ‘informally’, i.e. via written correspondence proposing the offer. In these cases we recommend professional advice is taken before making such an offer.
One thing to keep in mind is that in ‘informal’ negotiations, there is no obligation for the other party to respond, cooperate or negotiate. You are simply at their discretion.
STEP 3: NEGOTIATION
Once a counter-offer has been made, either by way of Counter Notice or return correspondence, the negotiations commence.
myleasehold provides professional negotiation services, drawing on our extensive experience and tactical valuation expertise to obtain the best deal possible for your freehold purchase.
STEP 4: PREMIUM AGREED, FREEHOLD PURCHASED
Once a premium has been agreed, the freehold will be transferred to the nominee purchaser through yours & the freeholder’s solicitors, barring any additional negotiations of the terms of acquisition.
Call us today to speak with one of our advisers about your particular situation; or fill out the contact or callback form to the right, and someone will get back to you shortly.
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We understand that the ‘legalese’ and industry-specific terminology can be confusing. If this section of our site leaves you perplexed, please contact us today by phone or email – or the instant chat widget at the bottom of this page! – and one of our customer service advisors will be happy to answer any questions you may have.
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