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Leasehold Reform

Buying a share of the Freehold

The technical term for buying a share of the freehold is referred to as Collective Enfranchisement. Below we answer some of the common questions we get asked about Collective Enfranchisement.

What is Collective Enfranchisement?

A Collective Enfranchisement is a process that, when the qualifying criteria is met, will result in leaseholders purchasing the freehold of the building.

There are many advantages to collectively enfranchising your building, from gaining management control, to increasing the saleability of the individual flats through gaining a share of the freehold.

Do I qualify for Collective Enfranchisement?

Unlike extending a lease, there are no ownership requirements to participating in a Collective Enfranchisement, so if you are a new flat owner, you can participate.

For leaseholders to qualify:

  • 50% of the flats in the building must participate. If there are only 2 flats in the building, both must participate.
  • At least two thirds of the flats in the building must be held on qualifying leases. A qualifying lease is a lease that was originally granted for a minimum of 21 years.
  • A leaseholder must not own more than two flats in the building. This is either jointly with others or solely in their own name. Where this applies, these flats will be discounted from the two-thirds;

For the building to qualify:

  • No more than 25% of the total internal floor area of the building, excluding any common parts is of non-residential use. This could include shops, offices or garages used by a commercial unit.
  • There must be a vertical division. For example, no part of the building should extend over or under another building. Should this be the case, both buildings may be able to join together to collectively enfranchise as a single building.

What is the process for Collectively Enfranchising?

  • Instruct a valuer to carry out a full inspection and valuation report which will provide you with an opinion as to the price payable for the freehold of the building and a lower figure for serving the S.13 Notice on the freeholder.
  • The valuation is carried out in accordance with Schedule 6 of the Leasehold Reform, Housing and Urban Development 1993 (as amended by the Commonhold and Leasehold Reform Act 2002).
  • Once in receipt of the report, instruct a solicitor (we can recommend one), to serve the S.13 Notice. Once served, the freeholder has 2 months to reply with a Counter Notice.
  • Once you are in receipt of the Counter Notice, there is a period of up to 6 months for both valuers to negotiate and agree a price. If during the 6 months, no agreement is made, and no application to the Tribunal is made then the claim is deemed withdrawn and you will have to wait a further 12 months to carry out the process again. An application to the Tribunal should be made, via your Solicitor, within the 6 month negotiation period to keep the claim ‘live’.

For further information please call our specialist Leasehold Reform Team on 020 7861 5046

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