BUYING THE FREEHOLD OF YOUR BLOCK OF FLATS
Leasehold enfranchisement is the legal term used when leaseholders buy the freehold of their block of flats. Ownership of the freehold gives leaseholders control over repairs, service charges and other management issues. Each of the leaseholders participating will become a part owner of a company which they form to manage the building.
Leasehold enfranchisement is a distinct area of law. Many firms do not provide leasehold enfranchisement as it requires specialist expertise. Mistakes can happen if the correct procedures are not followed.
Benefits of Buying Your Freehold
If leaseholders are unhappy with the management of their property, they can manage it themselves by purchasing the freehold from their landlord. The benefits of a buying your freehold include the following:
It frees you from the problems caused by unscrupulous landlords.
Control of freehold is often attractive for buyers — estate agents frequently refer to it by saying that the purchaser will obtain "a share of the freehold."
It gives you control of the management of the block, service charges and the granting of lease extensions and lease variations.
If a number of leaseholders have "short" leases, they may find it more cost-effective to buy the freehold collectively rather than each of them seeking a lease extension separately.
Does My Block of Flats Qualify?
In order to purchase a freehold, leaseholders must meet two requirements:
- The building must be not more than 25 percent non-residential.
- At least two-thirds of the flats must be let to qualifying leaseholders.
In general, qualifying leaseholders are those who have long leases (i.e., originally granted for more than 21 years). If the building qualifies, at least half of the qualifying leaseholders must participate in order to initiate a collective purchase.
BRIEF GUIDE ON HOW TO BUY YOUR FREEHOLD*
SECTION 13, Leasehold Reform Housing and Urban Development Act 1993
Your Initial Notice
The process commences when at least 50 percent of you serve a notice on the freeholder in return to buy the freehold. Once the notice is served you become responsible for your landlord's "reasonable" legal and valuation fees for dealing with the claim, and he or she may instruct a surveyor to inspect the building to prepare a valuation for your "counter notice."
Landlord's Counter Notice
Your landlord has just over two months to reply to your notice with his or her "counter notice." His or her counter notice will either accept your claim (or deny it) and, if accepted, is likely to offer a premium that is likely to be higher than what he or she might ultimately agree with you or what might be determined (if no agreement is later reached).
Negotiation With Landlord
You will then have a window of between zero and six months within which to negotiate the premium and terms of the conveyance with the landlord. If it is not possible to reach agreement, you will need to apply to the Leasehold Valuation Tribunal for a determination.
Once the premium and terms of the conveyance are agreed or determined, you have a further window of between zero and four months to complete the conveyancing and buy the freehold. Once the freehold is completed it is registered at the Land Registry.
Why Choose HPLP?
There are many statutory deadlines and dates to follow, and missing any one of them means you may lose your right to sell or buy the freehold. Our solicitors are recognised experts and accredited members of the Association of Leasehold Enfranchisement Practitioners (ALEP). We are also noted on the government-funded LEASE website and have hosted seminars, lectures and presentations on leasehold enfranchisement for leading barristers, surveyors and other professionals working in this area of the law.
We also offer free initial advice of up to a half-hour and fixed fee estimates so you know what you will be charged should you choose to go ahead with the purchase with our guidance.
To find out if it might be suitable to buy the freehold of your block of flats, contact our firm to speak with solicitors Ash Oberoi for free and discuss your situation in greater detail.
*Please note, the above is just a brief guide of some of the steps and is not, nor is it intended to be, legal advice. For a more detailed guide with all the steps and procedures and for more advice please contact us directly.