Leaseholders’ Right to Buy your Freehold
There are lots of different reasons why buying your property’s freehold is a good move for leaseholders. Whether you live in a house or a flat, the benefits of security, not having to deal with your freeholder, the property’s increased value and not having to pay any more ground rent are clear to see. There are however some key things you need to ask and understand before exercising the right to buy your freehold.
Before you even start taking steps to purchase the freehold of your property, make an appointment to see a solicitor who has experience in the world of buying the freehold for a property. This is also sometimes known as collective enfranchisement or leasehold enfranchisement.
Here are 6 critical questions you need to know the answer to.
Looking for specialist advice on every Leaseholders’ Right to Buy the Freehold of their Block? Call our specialist team on FREEPHONE 0800 1404544 for FREE Initial Phone Advice
1. Am I Eligible to Buy the Freehold of My Block?
Collective enfranchisement can only work if the leaseholders are actually eligible to buy the freehold. Whether or not a group of leaseholders have the right to collective enfranchisement depends on a range of factors, including how long the leasehold has been owned, what the lease covers and how long is left of the lease. Things are complicated further in blocks of flats where a flat management company needs to be set up in order to purchase the freehold as a collective. If you just want to buy the freehold for your house, the process is far more straightforward.
There are certain groups of people who are not allowed to buy the freehold, so if the freeholder is a housing trust with charitable status, the freehold also covers the property next door, you have your lease for business purpose or if the public has a right of access to your property you will need to get advice from a specialist property solicitor. If there are any questions or doubts at all on your eligibility to purchase your leasehold, a specialist solicitor can advise.
Click here to find more about eligibility for buying your freehold.
2. Why Am I Buying My Freehold?
Knowing why you want to buy the freehold of your property is one of the first things you should establish. Every leaseholder’s reasons for wanting to buy a freehold will differ.
Some want to be done with the hassle of dealing with a freeholder and the stress of waiting for things to be fixed for weeks when it would be easier to sort out the repair themselves. Others grudge paying the annual ground rent. A longer term consideration is often the desire to increase the value of your home and your security by purchasing the freehold.
If a group of leaseholders in a block of apartments just wants more say and control over how things are run, it might be easier and cheaper to exercise what it known as a “right to manage” rather than going down the full freehold purchase route.
If your sole reason for buying the freehold is to increase a property’s value and to increase security, a better option may be lease extension. A lease extension doesn’t involve any of the other leaseholders in your block and is often quicker and easier to complete too,especially if you happen to live in a larger block.
3. Is lease extension a better option?
The timescales, required paperwork and deadlines needed for collective enfranchisement are broadly similar to the process for extending a lease. and whilst buying your freehold gives you much more control over the block, it does come with problems and needs long term commitment.
In particular, keeping a large group of your fellow leaseholders on board with the scheme for many months can prove tricky to say the least. And after buying the freehold, you and the other participating purchasers will have ongoing commitments – e.g. responsibility for management of the block and keeping up with the paperwork of the new freehold company.
In most circumstances, freehold purchase is definitely a better bet – but it really does depend on your particular circumstances. Leasehold extension might be the best way to go if you are dealing with a large number of leaseholders and struggling to get enough people involved to drive the project forwards.
4. Is Buying the Freehold of My Property Too Expensive?
Finance and affordability are the other main considerations when it comes to buying the freehold. In basic terms – how do you plan to pay for it? This is a major worry for many people considering buying the freehold. It can be difficult to estimate total costs before starting the process, but things can be made clearer by having a valuation done beforehand to give you a ballpark figure to begin negotiations on price with your freeholder.
On top of the cost of the buying the freehold itself, you also have to factor in both your legal and surveyors’ fees, as well as those of your freeholder.
When you’re buying your freehold with other leaseholders, legal and surveyor fees are divided between all of those participating in the purchase. If you feel the price you are given for buying the freehold is unreasonably high, you have the right to take the case to the First-Tier Tribunal Property Chamber who will make a ruling. Fortunately this is rarely necessary.
5. Am I confident that the other leaseholders involved in the freehold purchase will stick with it?
Acquiring the freehold of your property isn’t a simple process. If you are considering buying the freehold of a block of flats along with many other fellow leaseholders, this sort of collective purchase gets even more complex.
Unless your block is a very small one, then getting the buy in of an off leaseholders can prove a problem – as can keeping them on board throughout the process. Our strong advice therefore, is to have everyone signed up to a binding participation agreement on day one. And our team can help you draft a participation agreement that fits your particular circumstances.
Click here to read more about Participation Agreements
6. Is my Solicitor a Freehold Purchase expert?
This is a very complex area of the law and there will be many more questions than those addressed above.
The best advice is to make an appointment with a solicitor who specialises in this area of property law and ask them to provide the answers.
Not many solicitors deal with freehold purchase as their core business, and even solicitors who specialise in conveyancing may never have been asked for help in buying a freehold.
Maximise your chances of a smooth and simple collective enfranchisement process by looking for a specialist solicitor at the earliest opportunity. Don’t be afraid of asking any solicitor you’re thinking of appointing the following simple question – “how many clients have you helped with collective enfranchisement?”
Our five strong specialist leasehold team deal with nothing but lease extension, freehold purchase and right to manage cases – dealing with around 500 of them every year
Need legal advice on the Leaseholders Right To Buy Their Freehold? Call now
Coming together to buy your freehold is complex – especially with a big block when quite a number of leaseholders will need to participate.
You are going to need specialist legal advice. Our expert freehold purchaser team can help you wherever you live. Contact our solicitors today for a FREE first phone consultation;
- Call us on FREEPHONE 0800 1404544
- Or use the contact form below