Share of Freehold – sounds good but what does it mean?
Whilst historically the collection of ground rent by freeholders has been a steady income stream, since the implementation of the Leaseholders Reform (Ground Rent) Act 2022 there is now little…
Buying your Freehold
Buying your Freehold – Collective Enfranchisement under the Leasehold Reform Housing & Urban Development
‘Enfranchisement‘ is a collective right for leaseholders of flats to buy the freehold of the building in which they live. Subject to a number of qualifying criteria, leaseholders of flats have the right to ‘enfranchise’ – a right to buy the freehold of their building.
The benefit of buying your freehold is that will gain ownership of and control over the management of the building. You will also be able to grant long leases (999 years) of the flats in the building.
Buying your Freehold
- Do you qualify to buy your freehold under the Collective Enfranchisement procedure?You will be a qualifying tenant if you are the leaseholder of a flat in the building.
- How do I start the procedure?The first step in extending your lease is to obtain a valuation of the likely premium payable to extend your lease.Once you have obtained your valuation, it will be necessary to serve a statutory notice on your landlord.See further steps at the given link.
- Joint Ownership in the names of IndividualsIf you are purchasing a property together, it is necessary to decide whether you are going to hold the property as joint tenants or tenants in common.
- Joint Ownership in the name of a CompanyLeaseholders who wish to buy their freehold will set up a company who will act as the nominated purchaser in the collective enfranchisement proceedings and will on completion be the registered owner of the freehold interest.
- Being a freeholderThe freeholders can grant a long lease of the flats at no premium. The only costs you will have to pay will be the legal costs of drafting the variation to the lease and a land registry fee for registration of the new lease at the Land Registry.
- The Right of First RefusalThe right of first refusal applies to the disposal of any property containing two or more flats held by qualifying tenants providing that more than 50% of the flats in the property are held by qualifying tenants. There are other exceptions as well.