Collective Enfranchisement / Buying the Freehold

If you own a leasehold flat, you may be able to buy the Freehold of the building in conjunction with other leaseholders, subject to meeting certain criteria in accordance with the Leasehold Reform, Housing and Urban Development Act 1993 (as amended) (LRHUDA 1993).

• Each participating Leaseholder must own a lease which had an original term of at least 21 years;

• No less than 50% of the Leaseholders of all the flats in the building must participate; and,

• Any non-residential / commercial parts of the building must not exceed 25%. 

There are additional requirements but the above are the main prerequisites. 

The benefits of purchasing the freehold include increasing the value of your own flat, paying no further ground rent, controlling the management of your property and arranging the maintenance and insurance for the building. The participating leaseholders form a company, which will act as a Nominee purchaser, to buy the Freehold. 

The process is initiated by the service of a Section 13 Notice under the LRHUDA 1993 by your instructed solicitor. The Initial Notice will include the deadline by which the Landlord must serve the Counter Notice. This is a minimum of two months from the date of service of the Initial Notice. There is then a statutory period for negotiation to settle the premium with the other side’s surveyor on your behalf. If the two parties still cannot agree the premium, then an application is made to the First Tier Tribunal (Property Chamber) for determination on unresolved issues concerning the valuation.