The Right to Enfranchise

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By Alan Draper | Apr 2020

It is a right, subject to qualification, for the owners of flats in a building, and sometimes part of a building, to join together and buy the freehold of that building. The relevant Act is the Leasehold Reform Housing & Urban Development Act 1993 (as amended).

Provided at least 50% of the flats in the building, who are qualifying tenants, participate and the building qualifies the landlord cannot refuse. The procedure is quite complex and the correct notice needs to be served on the landlord, so it is advisable to use a specialist solicitor and surveyor when undertaking this process.

There is a formula in the 1993 Act which is used to calculate the amount the leaseholders will have to pay to buy the freehold, known as the premium. Again the formula is complex and a specialist surveyor would be needed to provide an estimate of the premium to participating leaseholders.

The leaseholders have to decide how they will acquire and hold the freehold and this is often via a company of which they will all be members. This will also be the nominee purchaser, who will be named in the initial notice to the landlord.

Basic Outline of the process:

Checking Eligibility (of the building, the tenants etc)

Organising for Enfranchisement

Choosing the Nominee Purchaser

Selecting and Instructing professional advisers (solicitors and surveyors)

Assessing the Purchase Price

Serving the Initial Notice

Preparing for the subsequent procedures

The above need not necessarily be in this order and in most cases several issues will proceed together. It is important, however, that all the steps are taken and no critical area neglected. Once the initial notice has been served, the procedure is running and the nominee purchaser is likely to be subject to demands for information and to deadlines; a default at any stage could endanger the action.

The participating tenants are liable for the freeholder’s and any other relevant landlord’s reasonable professional fees from the moment they serve initial notice, whether they complete or not.

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