There are many reasons why you should purchase the freehold to your house or flat – security, more control over the running of the building, not having to deal with landlords, increasing the value of your flat, having no ground rent to pay and so on – but what do you need to know about the procedure before deciding on that option?
In particular the process of freehold purchase is far from simple – and it gets harder the larger the blog and the more of your fellow leaseholders who will be involved in the collective purchase.
Before starting to go through the legal process [collective enfranchisement is your legal right under the Leasehold Reform Act 1967, it is advisable to get help from a solicitor who specialises in freehold purchase (also known as collective or leasehold enfranchisement), but first, here are some questions you may want to ask yourself when considering buying the freehold to your property:
Why Do I Want To Buy The Freehold?
It’s always a good idea to establish why you want to attempt to purchase the freehold to your property. Some people do it to get away from landlords and the stresses that can come with having one, such as having to pay annual ground rent or waiting around for a landlord to come and fix something when you could have organised the repairs yourself for less money and within less time. You should, however, also think about the future; if you want to stay in your property for a long time, buying the freehold will give you more security as well as adding more value to your home.
If you just want more control over the management of your block – it might be worth considering exercising your right to manage – a process which whilst it doesn’t give you some any rights, is usually easier to achieve.
Alternatively, if you’re looking at freehold purchase just to increase the value of your flat, and to increase your own sense of security, you might consider the option of lease extension – which you can carry out on your own and is therefore much easier as you do not need to depend on fellow leaseholders to complete the process
Do I Have The Right To Purchase The Property Freehold?
The whole process of collective enfranchisement can only work, however, if you’re eligible to purchase the freehold in the first place. This can depend on several things, such as the length of the lease, how long you have owned the lease, and what the lease covers. This can get slightly more complicated when you live in a block of flats (in this case a Flat Management Company would need to be set up by the residents in order to purchase the freehold collectively), but if you’re just looking at a freehold for a house [which though unusual is far from unknown], it is generally quite straight forward. You may be ineligible, however, if the freeholder is a charitable housing trust, if the freehold includes adjoining property, if your lease is for business purposes, or if the public has the right to access your property. A solicitor specialises in collective enfranchisement and lease extension will be able to advise you on your eligibility to purchase your freehold.
Can I Afford To Purchase The Freehold To My Property?
The other main thing you will need to think about is that of finance. How are you going to pay for the freehold? This can be a worry to many would-be freeholders, especially as there’s no clear cut way to estimate how much everything will cost beforehand. You can improve the situation by getting a valuation to work out how much the freehold is likely to cost (this is generally done by giving you a ‘high’ and ‘low’ price to account for negotiations), but you will still have to add on surveyors’ fees and legal costs for both parties on top of that. That sum, of course, can then be shared out between those of your fellow leaseholders who want to participate in the real purchase. .If you believe the price quoted to you by the freeholder is too high, you have the opportunity to take it to a leasehold valuation tribunal. In terms of collective enfranchisement, the freehold purchase can be funded by a not for profit co-operative.
Want More Information On Freehold Purchase?
You probably have far more questions regarding freehold purchase than are answered in this brief guide, and the best way to get answers is to seek the advice of a solicitor who specialises in property law. They will be able to guide you through the entire process of freehold purchase, as well as any other issues you may have regarding your lease and your property. It’s worth pointing out, however, that very few solicitors deal with freehold purchase regularly, and even experienced residential conveyancing solicitors may never have completed the process – so to maximise your chances of a successful and relatively easy collective enfranchisement, do make sure you get specialist legal advice.
Tim Bishop is senior partner of Bonallack and Bishop – solicitors who specialise in collective enfranchisement for freeholders and leaseholders throughout England and Wales. For more information about freehold purchase, call them on 01722 422300 or visit their specialist website at http://ww2.freehold-purchase.co.uk.
Tim Bishop
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