Freehold Enfranchisement

• Step 1 - Do you qualify? Check the following 4 points:

  Are you flat owners? Make use of the Leasehold Reform, Housing and Urban Development Act 1993 and buy freehold of the building.

  1. Is your flat in:
     • a self-contained building (ie, structurally detached),or
     • a self-contained part of a building (ie, capable of being redeveloped independently of the remainder of the building)?Does the building have
  2. Does the building have at least two flats?
  3. Is non-residential part of the building 25% or less of the total floor space (internal floor area excluding common parts) of the building?
  4. Do at least two thirds of the flat owners of the building own long leases (ie, typically with terms of more than 21 years when they were first granted)?

  If your answer is yes to all 4 questions, you qualify. Even if you don’t reside in the flat, you are still entitled to buy under the Act.
• Step 2 – Participation

  Once qualifying leaseholder of at least 50% of the flats in the building have agreed to the buyout, you can proceed to buy the freehold. If there are only two flats in the building, both flat owners must agree to buy the freehold.
• Step 3 – Choose a ‘nominee purchaser’

  You will need to decide how you as a group are going to purchase the freehold. You can either nominate yourself, a fellow flat owner or the freehold company which you have set up for this purpose. The nominated person or company will be the ‘nominee purchaser’.
• Step 4 – Obtain a valuation

  You initiate the purchase process by serving a ‘section 13 notice’ (see below) on the freeholder of the property. You have to state the purchase price on the notice. Therefore you should obtain a freehold valuation before serving the notice.
• Step 5 – Serve section 13 notice

  Once you have obtained the valuation, you will then serve a ‘section 13 notice’ on the freeholder, advising that you and other flat owners are buying the freehold. You may choose to negotiate your freehold purchase with the freeholder before serving the notice.Once you have served the notice:

  • You should register this with the Land Registry.
  • You will have to pay the freeholder’s ‘reasonable’ professional costs.

  The freeholder has two months to respond to the notice by serving a counter-notice. The freeholder may:

  1. Take no action and do not respond;
  2. Issue a Counter Notice accepting your purchase at your stated purchase price; or
  3. Issue a Counter Notice disputing your purchase or your stated purchase price.

  What if the freeholder is missing? If the freeholder is missing, you can apply to the First-Tier Tribunal(property chamber) to make an order of sale or a vesting order. You will need to take steps to trace the freeholder before making such application.
• Step 6 – What if the freeholder does not agree to your purchase?

  The freeholder may dispute your proposed purchase. Such challenges could include:

  • An error in the section 13 notice;
  • The property is not a self contained building;
  • Any commercial element in the Property exceeds 25% of the floor area;(internal floor area excluding common parts)
  • There are not enough flats on long leases

  If the freeholder does not agree to your purchase on an amicable basis, you can apply to the First-Tier Tribunal(property chamber).
• Step 7 – Once the freehold is acquired

  You will need to decide whether you wish to manage the property yourselves or hire managing agents. The Ringley Group offers property management services. Visit Ringley Chartered Surveyors website

Clubbing together to buy the freehold puts you in charge.....
You need 50% of the block on board, and thereafter can grant yourselves long leases and choose the management arrangements that suit you.

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