Buying a freehold FAQs
For leaseholders - helpful guidance if you're looking into purchasing a freehold.
In order for the building to qualify:
- There must be a minimum of two apartments in the building.
- At least two-thirds of the apartments must be leasehold. In blocks of two properties both properties must be owned leasehold.
- No more than 25% of the internal floor area to be in non-residential use.
In order for the residents to qualify
The minimum number of participating leaseholders must equal half the total number of apartments in the building. Where there are only two apartments in the building, both residents must agree to participate in the purchase.
Leaseholders must own a 'long lease', which is:
- A lease of in excess of 21 years when first granted.
- A shorter lease, which contains a clause providing a right of perpetual renewal.
- A shared ownership lease where the leaseholder's share is 100%.
A block or leaseholder cannot qualify for collective enfranchisement where:
- The landlord is a charitable housing trust and the apartment is provided as part of the charity's functions.
- The leaseholder owns more than two apartments in the building.
- The leaseholder has a business or commercial lease.
In cases where the qualification criteria are not met we'll provide a full written explanation. Visit The Leasehold Advisory Service for independent information.
Where there are sufficient numbers of leaseholders wanting to proceed it's advisable that they enter into a formal participation agreement to govern joint actions. This includes rights of voting, negotiations and agreement of terms and financial contributions.
This is the nominee who will acquire the freehold and become the new landlord.
The nominee must be decided upon an early stage. This person can be one of the leaseholders, a corporate person, a trust or a company formed by the leaseholders for the purpose.
The most common format is a company wholly owned by the leaseholders, in which case the company must be established at the outset. A solicitor, managing agent or accountant will be able to advise how to establish a company and can produce the Memorandum and Articles to reflect the purpose of the company and to govern voting rights and control of shares.
Visit the Leasehold Advisory Service for independent information.
Leaseholders will need to agree at the outset how they intend to finance the acquisition of the freehold, including valuation and legal fees in addition to any premium payable. In the event of leaseholders having to withdraw, they will still have to pay their own and their landlord's costs.
Visit the Leasehold Advisory Service for independent information.
Leaseholders are advised to appoint a valuer and a solicitor. Ensure that chosen advisors have full knowledge and experience of the legislation, practices and procedures.
Visit the Leasehold Advisory Service for lists of solicitors and surveyors claiming expertise in lease enfranchisement legislation.
We strongly recommend that leaseholders first obtain a lease enfranchisement valuation from an independent RICS-registered surveyor in order to provide an idea of the likely purchase figure prior to commencing the action.
Although unable to provide an accurate estimate of the eventual purchase figure, the surveyor should provide a 'best and worst' figure. This is based on valuing from both leaseholders' and the landlord's perspective and anticipating areas of claim and counter-claim. The eventual cost to each leaseholder will be the share not only of the purchase premium, but also of both the landlord's and the leaseholders' legal, surveyor and admin fees.
Visit the Leasehold Advisory Service for independent information.
