Acquiring the freehold – flats

Tenants of a whole or part of a building have statutory rights enabling them to compel their landlord to sell its freehold interest to them. This is termed collective enfranchisement. Becoming the freeholder means that you will not have to pay ground rent, you will be responsible for management of your own property and you will not need to worry about your lease running out.

Here is a brief overview of the process;

1. You must qualify

The rules governing qualification are complex however, in brief;

You must be a long leaseholder ie. you must have been granted a lease for a term of 21 years or more;

The building must contain at least two flats and two out of three must be let to qualifying tenants;

There are certain exceptions such as you cannot acquire the freehold if your landlord is a charitable housing trust or if there is a non-residential part comprising more than 25 percent of the total floor area.

2. Canvass opinion

You need to have a sufficient number of tenants on board. The minimum number of participating tenants must equal half the total number of flats in the building. Tenants often enter into participation agreements in order to set out what is expected from each other throughout the process.

3. Approach a surveyor

As well as obtaining legal advice you are likely to require the advice of a surveyor who will be able to value the freehold. You will then be able to determine whether or not you can afford to go down this route.

In addition to the purchase price you need to bear in mind that you will also be responsible for payment of your own valuation, conveyancing and legal costs as well as the landlord’s costs.

4. Decide upon a nominee purchaser

This is usually a company set up with the specific purpose of acquiring the freehold. The participating tenants are commonly the owners. This is also the point at which you may decide to set up a fund in order finance the preliminary steps.

5. Serve the initial notice

This is when you let the landlord know, on a formal basis, that you intend to acquire the freehold. You become responsible for the landlord’s costs following service of the Notice.

6. The landlord may serve a counter notice

If the landlord serves a counter notice it must indicate whether it accepts your claim and if not why. If it disputes your entitlement you must apply to Court within two months for a declaration. If the landlord does not respond you have six months to apply to the County Court for a vesting order.

Need advice? Let us help:

If you would like more information regarding the possibility of extending your lease please do not hesitate to contact Eleanor Cornthwaite on 0161 761 4611 or alternatively email;