Landlord & Tenant Matters

Collectively Purchasing Your Freehold

Collectively Purchasing Your Freehold

The right provided by the 1993 Leasehold Reform Act (as amended) is for the enforced sale of the freehold of a building and lands, to a special company set up by the leaseholders – the Right to Enfranchise Company (the RTE Company).

The formal procedure for Collective Enfranchisement is started by the service of the initial Notice on the landlord; it then follows a prescribed route. Although this is the beginning of the statutory procedure the service of the notice should follow a period of preparation to ensure that the participating leaseholders are fully equipped to complete their application.

Checking eligibility

The right to purchase the freehold may only be exercised by a Right to Enfranchise (RTE) Company. At least 50% of qualifying leaseholders must participate. Where there are only two flats in the building both leaseholders must participate.

Qualifying as a leaseholder

A qualifying leaseholder must hold the property under:-

  • a lease in excess of 21 years
  • a shorter lease which contains a clause providing a right of perpetual renewal
  • a lease terminable on death or marriage or an unknown date
  • a statutory tenancy arising from the leaseholder having held over at the expiry of a long lease
  • a shared ownership lease where the leaseholders’ share is 100%

* The present unexpired term is not relevant, qualification is governed by the original term of the lease when first granted.

But, even if the leaseholder satisfies these criteria he or she will not be a qualifying leaseholder if any of the following cases apply.

  • the landlord is a charitable housing trust and the flats are provided as part of the charity’s function
  • leaseholders who own more than two flats in the building
  • business and commercial leaseholders

The building

there must be a minimum of two flats in the buildingno more than 25% of the internal floor area to be in non-residential use

There is no right of collective enfranchisement (but there is a right to renew the lease) where:

* the building is a conversion into four or fewer flats and not a purpose built blockAND the same person has owned the freehold since before the conversion of the building into flatsAND he or an adult member of his family has lived there for the past twelve months.

How much will the freehold cost

An initial valuation of the property by a qualified valuer or surveyor is strongly recommended in order to provide enfranchising leaseholders with an idea of the final purchase figure prior to commencing the action.

In considering the likely purchase price, the leaseholders’ liability for the landlord’s costs should also be borne in mind. The eventual cost to each leaseholder will be the share not only of the cost of the freehold but also of both the landlord’s and leaseholder’s legal and valuation costs.

We are able to offer specialist advice

Richard Palmer

Solicitor
CONTACT
Contact Us
Question
Call Back
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form

Eastbourne Office

11 Hyde Gardens
Eastbourne
East Sussex 
BN21 4PP
Tel: 01323 720142
DX: 6902 Eastbourne

Lewes Office

Suite 4, Sackville House
Brooks Close
Lewes
BN7 2FZ
Tel: 01273 480234
DX: 3103 Lewes 1

Peacehaven Office

10a Horsham Avenue
Peacehaven
East Sussex
BN10 8LL

 Tel: 01273 582680