The benefits of buying your freehold:-
- Once the flat owners own the freehold they are in full control regarding services and management of the building
- No Ground Rent is payable
- Flat owners can extend their Lease term without payment of a premium to the Landlord
- May improve marketability of the individual flats
What is enfranchisement:-
The Leasehold Reform Housing and Urban Development Act 1993 as amended by the Commonhold Leasehold Reform Act 2002 gives flat owners the right to join together to purchase the freehold.
How do the flat owners qualify:-
The flat owners must hold a long Lease in the building but unlike Lease extensions they do not have to have owned the property for two years.
How many flat owners are required to be involved:-
At least two thirds of the flats in the building must be let on long Leases and at least half of the total number must take part in the purchase
What is the cost:-
The premium payable to the Landlord should be calculated by a specialist surveyor.
What is the procedure:-
- You should obtain a valuation from a specialist valuer as to the premium to be paid
- A Claim Notice is then served on the freeholder
- The freeholder has to be given a period of at least two months within which to respond and accept the offer or serve a Counter Notice
- Negotiations then take place. If agreement is not reached an Application can be made to the Leasehold Valuation Tribunal for determination of the premium payable