Two laws affect this:
Leasehold Reform Housing and Urban Development Act 1993
The Commonhold and Leasehold Reform Act 2002

Why buy the freehold?

1. You may feel your freeholder is over-charging. Take control of insurance costs and service charge for repairs, cleaning, etc. Decisions made can be less formal, quicker and cheaper.

2. Change provisions in your lease that stop you making alterations or letting to a tenant.

2. Owning the freehold will add value to your flat.

3. Usually, you can extend your lease for free to 999 years.

4. No ground rent.

5. Potential buyers like to see “shared freehold”.

6. You may also have the right to buy property and areas included in your lease, such as garages and gardens.

Do you qualify to buy the freehold?

1. You must be a long leaseholder. At least two – thirds of the flats in the building must have been sold on long leases (minimum 21 years when granted).

2. At least half of the leaseholders in the building must participate.

3. There must be at least two properties in the building. If there are only two properties in the building, both must be willing to buy the freehold.

4. No more than 25% of the internal floor area must be used for or intended for non – residential use (excluding any common parts).

5. There is no right to collective enfranchisement if all the following conditions exist: the building is a conversion into four or fewer flats and the freeholder has owned the freehold since before the conversion and has lived there (or an adult member of the freeholder’s family has lived there) for the past 12 months.

6. You will not qualify if the freehold includes operational rail track, bridge or tunnel within its boundary.

7. There is no right to enfranchisement on buildings within a cathedral precinct and National Trust property. Crown properties are also excluded, but in practice the Crown are likely to waive their right of refusal.

NB: There is no requirement for you to have owned the property for a minimum period.
Also, there is no obligation to join in. The non-participating leaseholders just become tenants of the new freeholder (the former leaseholders). They can always buy the freehold later at any point.

Procedure

1. Choose a Nominee Purchaser. This is normally a company formed by the tenants and is the name that will go on the document to be served on the freeholder. Your solicitor can organise this.

2.  Appoint a specialist valuation surveyor, experienced in leasehold valuation, to give an estimate of the purchase price. The leaseholders have to compensate the freeholder for loss of ground, loss of reversion (the flats would have reverted to him when their leases expire) and half the marriage value (the increase in value of the flats once they are enfranchised).

3. Submit the Initial Notice.

4. The landlord has 21 days to request information as to the entitlement of the leaseholders to enfranchise.

5. The leaseholders have 21 days to respond.

6. The landlord must serve his counter-notice by the date mentioned in the Initial Notice. This date must be a minimum of 2 months from the date that the Initial Notice was served.

7. If the landlord does not serve a Counter-Notice, the Nominee Purchaser has to apply to the court within 6 months for a Vesting Order.

8. In the Counter- Notice, if the landlord claims the Initial Notice is invalid, the Nominee Purchaser has to apply to the court for validation of the Initial Notice within 2 months.

9. If negotiations fail, either side can apply to the Leasehold Valuation Tribunal for a decision, no earlier than two months after, but no more than 6 months after the service of the Counter-Notice.

10. The tribunal’s decision is final 21 days after they send it to the two parties. Both sides can appeal in this period, subject to permission from the tribunal.

11. After the tribunal’s decision has become final, the landlord has 21 days to provide a draft contract.

12. Both parties are to enter into contract within two months after the decision became final. If this deadline is not met, a Vesting Order can be sought within a further two months.

We have provided the above information as a general guide.  We are not solicitors, any quotations of statutory law are not intended to be legal representations, you must always seek clarification from a firm of solicitors who are specialists in this area of enfranchisement law.

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