Freehold Enfranchisement – Frequently Asked Questions

Why should I buy a share of the freehold?

If you are unhappy with the existing management and want to change it
If you want to stop paying ground rent and if your building is poorly managed it could mean less service charges to pay
If you want to add value to your flat
If you want to extend your lease
If you want to make your flat easier to sell

Is there another way of getting control of the management other than buying the freehold?

Yes. There is also a statutory right to manage which is a good option where the leaseholders do not believe they can afford to purchase a share of the freehold. It is also usually a quicker process with less costs incurred. It does mean that you continue paying ground rent and that you cannot extend your leases without paying the landlord. The landlord is entitled to be a member of your management company and so will retain some small say on certain matters. If the management of the block is a problem then we tend to find that the leaseholders want to go the whole way and purchase the freehold as either way costs are incurred and leaseholders will end up with more for their money if they have purchased the freehold.

What do you need to exercise your right to buy the freehold?

Your flat needs to be in a self-contained building or a self-contained part of building
The non residential parts of the building must not take up more than 25% of the building
2 or more flats must be held under leases which are longer than 21 years
These flats must not be less than 2/3^rd of the total number of flats
The participating tenants must own not less than 50% of the total number of flats in the building

What is the procedure to exercise the right to buy the freehold?

Just click here to find out what’s involved.

Is it better to buy a share of the freehold or just exercise the right to manage?

Exercising your right to manage can be a faster and cheaper solution to buying the freehold. If the only issue is taking control of the management then it is certainly worth considering. Your landlord will be entitled to become a member of the management company you form and ground rent will continued to be paid to them. You would also have to pay them a price if you ever wanted to extend the term of your lease. This would not be the case if you had bought a share of the freehold.

Why should I serve the notice rather than approach the freehold landlord informally?

If followed correctly the statutory procedure works to the benefit of the leaseholder because:-

The date you serve your notice will be the date on which the valuation of your extended lease is fixed. From the date you serve your notice there is no more need to worry about your lease getting shorter.
Whether you negotiate a lease extension without serving notice of your right or not your freehold landlord will expect his own costs to be paid by you. If they seem high you will only be able to refer to them to the Leasehold Valuation Tribunal for them to decide whether they are reasonable or not if you have served the statutory notice.
If the price the landlord wants for the lease extensions seem unreasonably high, you will only be able to refer to the Leasehold Valuation Tribunal for them to decide what the price should be if you have served the statutory notice.
The landlord is tied in to the statutory time limits. If the freehold landlord fails to serve a counter-notice in the time you have given which must be at least 2 months then you are entitled to an extended lease at the price you have offered in your notice.

Why should I take professional valuation advice?

It is highly recommended that you take valuation advice from a surveyor because it will bring you peace of mind to know that you are not paying more than you should be to the freehold landlord for the freehold. A leaseholder’s notice claiming the exercise of their right to buy the freehold can be deemed to be invalid if the amount offered is unreasonably low and that is a pitfall for those proceeding without professional valuation advice. Your surveyor will if needed, conduct negotiations on your behalf and is far more likely to succeed in securing a reasonable price than if professional advice had not been taken. We know several local experienced surveyors and would be happy to recommend a good one for you.

How long will it take?

This can depend on how quickly a price can be agreed and also how quickly your landlord is willing to proceed. Realistically there is going to be some negotiation and the statutory time frames allow for that. From beginning to end the process is likely to take between 4 and 18 months. If having followed the statutory procedure, between 2 and 4 months following agreement of all the terms, the landlord has still not transferred the freehold, an application for a vesting order from the court can be applied for and this will ensure the freehold title is transferred to you.

How much will it cost?

This can vary a lot as it will depend on how many leaseholders are participating. The more leaseholders participating the less it should be for each individual. Please contact us to give us specific details and we can advise you as to the likely costs.

When do I have to pay?

You will not need to pay anything until the freehold purchase completes except the surveyor’s fee which is usually paid shortly following receipt of his valuation advice.