Buying Your Freehold

If you own your property as a leaseholder provided you meet certain criteria you may have the right to compel the freeholder to sell the freehold to you on payment of a premium. This right is known as collective enfranchisement.

What benefits are there to buying freehold?

The purchase of the freehold gives leaseholders more control over managing and maintaining their building, for example following completion of the freehold purchase, the leaseholders will have the ability to grant themselves very long leases, usually for 999 years, at a peppercorn rent (i.e. of no monetary value).

Do I qualify?

The rules can be quite complex but we will assist you in determining whether your building qualifies and whether you are a qualifying leaseholder.

In brief you are a qualifying leaseholder if you are a tenant of a flat under a long lease, i.e. one that is granted for more than 21 years.

If you own three or more flats in the building you will not be a qualifying tenant in respect of any of those flats.

What happens next?

The next step is usually to obtain a valuation from a qualified valuer to determine what they consider the price should be for the freehold purchase.

We will carry out the legal process on your behalf including obtaining land registry entries of the various freehold and leasehold titles and copies of the leases.

Following receipt of the valuation we will prepare and serve an Initial Notice on the freeholder on behalf of the participating leaseholders. We would usually recommend that a new limited company is set up to act as the vehicle for the purchase of the freehold title and we can assist you in setting up a company for this purpose.

Following receipt of the Initial Notice the freeholder has a period of 2 months in which to serve a Counter Notice. The freeholder can either reject the Initial Notice on the basis that it is invalid or accept it but dispute the price that you have offered to pay.

In practice it is likely that the freeholder will accept the notice but dispute the price. At that point the valuer and the freeholder will enter into negotiations over the price.

If within 2 months of the date of the freeholder’s Counter Notice a price cannot be agreed an application can be made to the Leasehold Valuation Tribunal (LVT) to determine the price. If the freeholder does not serve a Counter Notice or delays then an application can be made to the court for a vesting order.

Within 2 months of the price having been agreed a contract is entered into with the freeholder.

How long will it take?

The timing of the whole process through to completion will depend on a number of factors including how co–operative the freeholder is. On average the process can take up to 6 months but could be substantially longer if an application has to be made to the LVT or the court.

How much will it cost?

The cost of the freehold will of course depend on the valuation. Please note that the participating leaseholders are jointly liable for the freeholder’s reasonable legal costs and surveyors fees for dealing with the Initial Notice and these costs should be borne in mind when considering your total outlay.

For further information contact Tony Earl on 01782 652330 or by email at tony.earl@tinsdills.co.uk.