The very first option or the standard option for the purchase of the freehold of your block is simply a bank loan/mortgage. That is to say that you go to the bank or the building society and you request the funding required to exercise your freehold right to buy However, you should not assume that this is the only option available to you.
Another option to facilitate buying your freehold is that all the leaseholders club together and then a company is formed, so that the company buys the freehold, not individuals. Then you are able to raise funding through the company and this will mean that you can secure money at a preferential rate in terms of your repayments. So this is definitely a good option.
Creating a fund for the freehold acquisition can also be a good idea. This is because the whole procedure of the freehold purchase can be a lengthy process. Leasehold or freehold enfranchisement which is the process of undertaking a freehold purchase is actually a very complex area of law. So along the way, there will be times when costs arise and the sooner a collective fund is started the better. In effect this means that exercising your freehold right to buy to can be as smooth as possible.
Sometimes not all tenants wish to participate within the scheme, but so long as 50% of tenants are keen, then it can usually still go ahead. This will mean that there are some costs that will have to be borne by those who are interested and in these situations; there may be a case for outside investors to be attracted into the scheme. There is no guarantee that this will happen, but sometimes investment companies may be interested in making an offer and approaching them is certainly a good idea. Ideally this approach should be made at the very early stages of the freehold purchase.
Freehold purchase or leasehold enfranchisement can be funded by a not for profit co-operative being formed. This is slightly different from the formation of a company, since companies will ultimately seek to make some kind of profit, but a co-operative has a slightly different ethos and philosophy; but it requires a good deal of co-operation throughout the process of collective enfranchisement.
Thus there are different options available when it comes to freehold purchase. Care should be taken to explore all the options to ascertain which will be the most beneficial for all. The process of collective enfranchisement is not without its drawbacks.
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