Many may not be aware that leaseholders living in a block of flats have had the right to purchase the freehold of their building as a group since 1993. This can provide the leaseholders with several advantages and this process is called collective enfranchisement.
What is collective enfranchisement
It is the right to buy the freehold of a block of flats from the freeholder providing certain conditions are met.
Whilst the idea might seem simple in principle the legal processes are complex, and leaseholders are well advised to seek out the help of solicitors and surveyors who specialise in this field.
There are some eligibility requirements that need to be met before a leaseholder is able to proceed with collective enfranchisement and the criteria is:
- The building in question must not be used for any more than 25% commercial premises;
- The block of flats must be self-contained;
- At least two thirds of the flats must be owned by qualifying tenants – those who were initially granted leases of 21 years or more.
- At least half of the flats within the block must agree to the collective enfranchisement.
One of the key advantages would be the ability for the leaseholders to grant themselves longer leases with a peppercorn ground rent. Extending the lease of the property helps boost its value.
As well as increasing value, it gives leaseholders greater flexibility over the day to day running of the block of flats so, for example, decisions on maintenance.
Once you have the requisite number of tenants to purchase the freehold a Notice has to be served on the freeholder who has time to respond, and if there is no response then the leaseholders must apply to the County Court or Tribunal within a specific timeframe.
If the premium is agreed, the freehold can then be purchased.
At WBW we can assist in the preparation and service of Notices, advise on the collective enfranchisement process and be involved in the negotiations to purchase the freehold.
What if the landlord is missing?
It is still possible to obtain the share of the freehold but it involves a separate procedure. The leaseholders must demonstrate an attempt to trace the missing landlord before applying to Court so seeking early advice from solicitors is important to ensure all the correct procedures are followed.
As well as purchasing the freehold, you may want to extend your lease, and WBW can advise you on the process for extending the lease of your property.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.