Residential Leasehold solicitors dealing with Buying the Freehold Bournemouth, Poole, Dorset and the surrounding areas.
(Also known as Collective Enfranchisement)
Buying the freehold means that you can - jointly with other leaseholders - own the land on which your property was built. You may not have to renew your lease again, which can cost thousands of pounds.
A share in the Company that owns the freehold. This will enable the Company to:
- Grant extended leases of 999 years at a peppercorn ground rent and
- Amend any of the terms of the flat leases. For more information in connection with extending your leases following your freehold purchase please see our page Preparation of your New Leases.
Eligibility criteria for buying freehold
Fifty per cent of the flats within your block will need to participate. For example, in a block of 12 flats, six of those would be required to proceed. The matter can proceed whether the other six want it to go ahead or not.
- You do not need to live in your flat. For example you may rent it out or it is your holiday home. In these circumstances you are still able to be part of the process.
- You do not need to have owned your property for any specific period of time. Therefore you can buy a flat one day and become part of the purchase of the freehold process the following day.
- A Limited Company is formed to undertake the purchase on behalf of the participating flat owners. Each participating flat owner will become a shareholder in this Company. Two volunteers are appointed as Company Officers.
- The individual flat owners enter into a Participation Agreement with the Company. The purpose of the Participation Agreement is to set out the rights and obligations of both the participants as individuals and the Company. In particular it provides for all the participating flats to provide their funds in the agreed proportions and it also provides a decision-making process if a vote is needed on a particular issue. This provides certainty throughout the entire process.
- The Initial Notice is prepared and served on the freeholder and any other relevant party. This Notice will contain certain required information but most importantly the offer figure your valuer will have recommended by this stage.
- You then may receive a Notice asking the leaseholders to prove that they own their property in the names that are specified in the Initial Notice.
- At this stage, we would expect the freeholder to instruct their valuer for the purposes of inspecting and valuing the premises.
- The freeholder will serve a Counter Notice in response to your Initial Notice. The most important point in the Counter Notice is the counter proposal to the offer figure. Your valuer will advise you concerning the likely sum to expect within the Counter Notice. The Counter Notice has to be served by the date specified in the flat owners' Initial Notice. The date in the Initial Notice must have allowed the freeholder a period of at least two months to respond.
- Once a Counter Notice has been served, the parties' valuers will open negotiations on price and attempt to agree a figure.
- (a.) the matter can be settled by agreement then the transfer of the freehold will proceed as a standard sale/purchase transaction.
- (b.) any aspects of your freehold purchase can not be agreed then one of the parties will need to make an application to an independent Tribunal for a determination. This Tribunal is an expert body specialising in these transactions and other similar matters. The application to this Tribunal has to be made before the expiry of six months after the date of the Counter Notice, otherwise the flat owners' Initial Notice will be deemed withdrawn and they will not be able to serve another one for a period of 12 months.
About 98% of cases settle by agreement and without having to go to a Tribunal hearing.
For a free initial chat with one of our expert residential leasehold property solicitors to discuss how we can help you, please contact us now.