How to Start Buying Your Freehold

In order for a freehold purchase [often referred to as leasehold or collective enfranchisement] effort to be successful, a certain number of participating leaseholders are required. A minimum of 50% of the owners all flats in the block will need to participate, although you can get moving with the enfranchisement before this threshold is reached, so long as the 50% is eventually reached. This is particularly important as many potential participants won’t join or commit until they know for certain that the enfranchisement will go ahead. This is the sort of chicken-and-egg situation which needs ironing out in the very early stages.

However, it’s worth bearing in mind that the whole process of collective enfranchisement is often much simpler in smaller blocks. So if you live in a small block of, say, four flats – you only need one other leaseholder to join in. On the other hand if your particular block has 100 flats – getting another 49 individual lease owners to agree to join in, and then to keep them on board throughout the process, is far from simple.

Starting out? Why not send out an invitation

Essentially, the process involved with buying the freehold of your block is best started when a significant number of leaseholders have decided that they would like to buy the freehold on the block of flats. What constitutes a significant number will differ from case to case, but at this early stage a formal invitation should be drafted and sent to all leaseholders proposing the collective enfranchisement and asking them to join in with the project. This invitation is not a legal requirement as such, but is a good way to start the process and contact all leaseholders quickly as well as keeping the contact formal, which will put many people’s minds at ease with regards to the financial and legal aspects of the purchase.

Buying your freehold – What to include in your invitation

The initial document should detail;

  •          what is proposed
  •          the benefits of freehold acquisition
  •          the information regarding the deadline for joining
  •          the deposit that would need to be paid
  •          cost estimates for the whole project should be included, and it must be clearly stated that these estimates are just that — estimates — and that the final cost could vary and will only be known once the whole process has been completed.

Ensuring that everyone has the same formal notice at the same time will also ensure that potential conflicts are avoided, with every owner being treated in the same way. Naturally, there are instances where this might not be a good idea, for example in a case where one or two of the flats are occupied by friends or relatives of the freeholder, who you think might prove difficult and where you run the risk of that freeholder being provided with confidential information regarding the potential collective enfranchisement.

 

Signing up for Freehold Purchase

A sign-up form should be included with the formal invitation, kept brief and simply stating that the responding leaseholder wishes to take part in the purchase of the freehold on the block of flats should the project go ahead and get underway.

This sign-up form is not legally binding, and this should also be made clear. It simply registers the leaseholder’s interest and intent to participate in a collective enfranchisement project should it happen.

 

Enfranchisement – holding a residents meeting?

It might also be a good idea to arrange a residents’ meeting for those who are still unsure or undecided, allowing them to ask further questions and obtain more information before committing. This can often spur people into joining and signing up.

 

If your block is a big one, and the sums involved will therefore be larger and the project trickier, it’s well worth considering getting a specialist collective enfranchisement solicitor to attend that meeting – they will be able to offer advice from a legal basis and ensure that all of the information being provided is accurate. This will also provide peace of mind to the residents as they will be able to see that the information they’re receiving is accurate and provided by a legal professional with experience in collective enfranchisement. Again, this can often sway many residents into joining the effort.

 

Residents and lease owners – you need to know the difference

It’s particular important point to note here however that just inviting residents may not accurately identify the leaseholders. Many flats these days are owned by buy to let landlords – and it’s the flat owner, not the resident, who can exercise the right to buy their freehold.

 

 

Starting to buy your freehold – Summary

Overall, in the initial stages of planning to buy the freehold of your block, make sure you stay focused on the positive outcomes of collective enfranchisement – with each of the stages and the likely costs being laid out as clearly as possible, showing a fellow lease owners how transparent the whole process is. When the very real benefits of enfranchisement can be clearly seen and the efforts and requirements understood by all, you will find your chances of a successful collective enfranchisement will be much higher.

Starting to buy your freehold? Get the right legal advice from the outset. Call us now

Joining together with your fellow lease owners to buy the freehold of your block can prove to be very complex – especially with a big block when you’re going to need the support of  a number of leaseholders.

You are going to need specialist legal advice from lawyers who really know what they doing when it comes to freehold purchase.. Our expert team can help you wherever you live. Contact us today for a FREE first phone consultation;

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