Freehold
You own the building, the land on which it stands and the sky above it and are responsible for its maintenance. Houses are generally freehold.
Leasehold
You own the property for a period of time as specified in a lease agreement with the freeholder (person / company who owns the freehold). The freeholder who may also be the Landlord is responsible for the maintenance of the communal areas and you pay a service charge / ground rent. Flats and maisonettes are usually leasehold.
It may be the case that a leaseholder owns a leasehold flat and also owns a share of the freehold. This is usually where a company has been formed which owns the freehold interest. The owners of some or all of the flats within the building own a share in and are members of that company.
Collective Purchase of Freehold
Leaseholders of apartments or flats who are interested in purchasing the freehold of their building can join with the owners of other flats in the building to collectively buy the freehold through a process known as ‘collective enfranchisement’.
The rules around the collective purchase of a freehold are complex, and strict eligibility criteria apply. We would strongly encourage anyone considering collective enfranchisement as a route to purchasing the freehold of their property to seek expert guidance at the earliest opportunity.
Our solicitors at Beverley Morris & Co. will be happy to provide further information to help you understand whether you will qualify. We will explain what is involved at each step of the process and provide guidance based on your individual circumstances.
To speak to our Collective Purchase of Freehold solicitors today, please call us on 020 8852 4433 or email enquiries@beverleymorris.co.uk.
How Our Local Collective Purchase of Freehold Solicitors Can Help
To qualify for collective enfranchisement, the following must apply:
· The building must contain two or more flats.
· At least two-thirds of the flats in the building must be owned by qualifying tenants (tenants of leases granted for more than 21 years).
· A maximum of 25% of the building (excluding common parts) must be used for non-residential use.
· At least 50% of the flats in the building that are qualifying tenants must participate.
· The building must be the whole of a self-contained building or a structurally separate part divided vertically from the other parts.
Qualifying leaseholders will serve an initial notice on the landlord informing the landlord of their intention to purchase the freehold. Once the initial notice has been served, there are certain deadlines and requirements for information to be provided.
Subsequently, the flat owners will usually form a company to own the freehold, the flat owners being the shareholders in the company.
If you are considering a collective purchase of your freehold and want more information about what the process involves, please speak to one of our residential property team today. You can call us on 020 8852 4433 or contact us via email at enquiries@beverleymorris.co.uk.
Collective Enfranchisement Solicitor Near Me
It can be tricky to predict how long a successful collective freehold purchase can take and how much it will cost. Both depend on various factors, such as the level of cooperation from the parties involved and whether the process runs into any issues along the way.
There is a formula that can be used to calculate the price (premium) to be paid by the leaseholders for the freehold. Usually a surveyor is instructed to provide an initial valuation of the property and provide an estimate of the premium payable. Leaseholders will also incur other costs, including the landlord’s surveyor’s fees and legal fees, as well as HM Land Registry’s fees for registration.
For a more accurate indication of what collective enfranchisement might cost, we advise you to contact us so that we may provide a specific tailor-made quotation based on the information you provide.
Our Fees
We will always ensure you are fully aware of all costs involved, and your solicitor will explain these to you. For more information, you can contact our team or make an online enquiry.
Our Collective Purchase of Freehold Team
Beverley Morris & Co.’s residential property team will be happy to speak with you regarding all areas of residential conveyancing, including buying and selling, mortgages, lease extensions, transfer of equity and new builds. You can learn more about our team by clicking on the links below.
Other Legal Services
We can also provide specialist legal advice on other areas of law that may be relevant when you are organising your estate, such as Lasting Powers of Attorney, Probate and Estate Management, Family Law and Wills.
Collective Purchase of Freehold Solicitor Blackheath
If you have any questions on the collective purchase of freehold or want more information on anything mentioned above, please call us on 020 8852 4433 or email us at enquiries@beverleymorris.co.uk to find out more.
How may we help you?
Collective freehold purchase, or collective enfranchisement, is the right for the owners of flats in a building to join together to buy the freehold of that building. The Act governing the right to do so is the Leasehold Reform Housing and Urban Development Act 1993 (as amended).
It is a requirement that at least 50% of the flats in the building, who are qualifying tenants, must participate. A qualifying tenant is a leaseholder / tenant who has a lease that was more than 21 years in length when first granted.
It is important for the leaseholders to decide how they will obtain the freehold. Usually a company will be formed by the leaseholders for the purpose of purchasing the freehold. The procedure requires that an initial Notice is served on the Landlord informing the Landlord of the intention to purchase the freehold. Once the initial Notice has been served there will be certain deadlines and requirements for information to be provided. For this reason, the procedure can be quite complex.
To qualify for collective enfranchisement, the building must contain two or more flats and at least two thirds of the flats must be owned by ‘qualifying tenants’. As mentioned above, at least 50% of the flats in the building who are qualifying tenants must participate. There are certain leases which may or may not come within the definition of a qualifying tenant.
It is important to note that if more than 25% of the floor space of the building, excluding any common parts, is not used for residential purposes then the building will not qualify.
Our solicitors will be happy to provide further information to help you understand whether you will qualify. We will explain what is involved at each step of the process and provide guidance based on your own individual circumstances.
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The Act provides a formula which can be used to calculate the premium (price) to be paid by the leaseholders for the freehold. It is recommended that a surveyor is instructed to provide an initial valuation of the property and an estimate of the premium payable. The surveyor will usually provide a ‘best’ and ‘worst’ figure from both the leaseholders’ and freeholder’s perspective. Further negotiations between the parties will determine the exact figure payable. The leaseholders will be liable for the Landlord’s professional fees from the start of the transaction. This will include the Landlord’s surveyor’s fees and the Landlord’s legal fees.
There will be other costs incurred by the transaction including HM Land Registry’s fees for registration.
We advise you to contact us so that we may provide a specific tailor-made quotation based on the information you may provide to us.
The length of time collective enfranchisement takes differs from case to case. It will depend on factors such as the level of cooperation from the various parties involved. For example, if both parties negotiate the premium quickly, then the matter should be resolved within a fairly short period.
We do not like to raise false expectations by promising a precise time frame at the outset, as it is impossible to predict any issues that may arise. That said, we aim to deal with your matter as efficiently as possible and we will always bear in mind any particular time frame to which you might wish to work.
We pride ourselves on our honesty and will always let you know if we think your goals may not be achievable.
