Conversion to freehold: Enfranchisement

• Direct decision-making: By owning the freehold, you and your fellow leaseholders become decision-makers. This means having the final say on essential matters such as repairs, improvements, and service contracts. No more waiting on an unresponsive freeholder to take action on maintenance issues.
• Customised service charges: You can manage and set service charges that reflect real costs, ensuring transparency and avoiding excessive fees.

• Longer leases at minimal Cost: Once you own the freehold, you can extend your lease to up to 999 years without incurring large expenses. This is a significant value-add, as properties with long leases are more desirable to potential buyers and lenders.
• ‘Share of freehold’ appeal: Marketing a property as having a ‘share of freehold’ can boost its attractiveness and market value. Buyers often prefer properties where they have more control and fewer restrictions, which translates to a more competitive selling position.

• Free from freeholder restrictions: Owning the freehold frees you from many of the limitations imposed by traditional lease agreements. You can make decisions about your building that align with your collective priorities, leading to a better quality of life for all residents.
• Tailored maintenance & improvements: Plan upgrades, renovations, or eco-friendly enhancements on your terms. This flexibility can improve your property’s comfort and sustainability.

• Avoiding escalating costs: Without the freeholder’s involvement, there is less risk of unexpected hikes in service charges or additional fees that may not align with residents’ interests.
• Long-term stability: Investing in the freehold protects your property from potential changes in ownership that could disrupt current arrangements or lead to disputes.

• Collective decision-making: The process of purchasing and managing the freehold fosters a stronger sense of community among residents. Working together to maintain and enhance your shared building promotes a unified approach and shared goals.

A qualifying tenant is any individual who holds a long lease. Typically, this means a lease originally granted for more than 21 years.

Property ownership limits: A tenant cannot qualify if they own three or more flats in the building. This rule prevents large-scale investors from taking advantage of the collective enfranchisement rights intended for resident leaseholders.

• Minimum leaseholder participation: More than 50% of the flats within the building must be represented by leaseholders who wish to participate in purchasing the freehold. This means if there are 10 flats, at least 6 leaseholders must be involved.
• Mixed-use buildings: If the building contains commercial space, such as shops or offices, it is still eligible, provided the non-residential part does not exceed 25% of the total floor area. This ensures that the focus remains on residential ownership.

• Small developments: Buildings where the freeholder resides, and there are no more than three flats, are exempt. This protects small-scale landlords who share the property as their primary residence.
• Recent conversions: Properties that have been converted to flats within the last 12 months may face additional restrictions.

• Multiple ownership structures: If the building is managed by an intermediate leaseholder (such as a company holding a head lease), eligibility and procedural steps might vary. Expert legal advice is essential to navigate these complexities.
• Collective agreement: Leaseholders interested in collective enfranchisement must collaborate and agree on participation and funding arrangements. Clear communication and a shared vision can make this process more efficient and less stressful.

• Gathering leaseholders: The first step involves assembling the group of leaseholders who wish to participate. It’s crucial that more than 50% of the flats are represented.
• Forming a legal Entity: Often, a company is set up to represent the collective group in the purchase. This simplifies decision-making and allows the group to act as one entity in negotiations.

• Engaging a qualified wurveyor: It’s essential to appoint an experienced surveyor to conduct a valuation of the freehold. This will determine a fair purchase price and help prevent disputes later in the process.
• Budgeting for costs: Consider the valuation fee, legal costs, and potential tribunal expenses to set realistic expectations for each leaseholder’s financial commitment.

• Preparing the notice: A formal Initial Notice must be served to the freeholder, outlining the collective group’s intention to purchase the freehold and proposing a purchase price.
• Statutory deposit: The leaseholders are required to pay a deposit, typically 10% of the proposed price, to the freeholder when the Initial Notice is served.
• Response timeline: The freeholder has a set period, usually two months, to respond to the Initial Notice with a Counter-Notice that either agrees to sell or contests the terms.

• Reviewing the counter-notice: If the freeholder agrees to sell but at a different price, negotiations begin. This stage may involve both parties’ surveyors and solicitors working to agree on a fair value.
• Tribunal involvement: If an agreement cannot be reached, the case may be referred to the First-tier Tribunal (Property Chamber), which will make a binding decision on the purchase price.

• Finalising the transaction: Once an agreement is reached or a tribunal decision is made, the purchase can proceed to completion. The legal team will handle the transfer of the freehold and ensure compliance with all procedural requirements.
• Updating leases: After the freehold transfer, leaseholders can extend their leases as planned, typically to 999 years, and set new terms that benefit the group.

• Managing the freehold: The group must then decide on how to manage the freehold, which could involve setting up a resident-led management committee or hiring a professional managing agent.
• Ongoing maintenance & budgeting: A new service charge structure may be introduced, ensuring that the building is maintained to the leaseholders’ satisfaction.

• Some freeholders may delay responding to the Initial Notice or refuse to negotiate in good faith, which can stall the process and create frustration for leaseholders. We use our experience to apply strategic pressure and, if necessary, escalate the matter to the tribunal to protect your interests and keep the process moving.

Disputes over the value of the freehold are common, with freeholders often seeking higher prices than leaseholders expect or can afford.

Our team works with trusted, qualified surveyors to provide thorough valuations and counter any inflated claims. We handle negotiations effectively to reach a fair agreement or represent you in tribunal proceedings if needed.

In cases where the freeholder is missing or unresponsive due to being deceased or otherwise untraceable, the process can become complex.

We guide leaseholders through the legal procedures involved in these cases, such as applying for a vesting order to transfer ownership through the court, ensuring that the process is completed lawfully and efficiently.

Buildings with complex ownership, such as those involving intermediate leases or multiple freeholders, can present additional legal hurdles.

We navigate these intricacies by thoroughly reviewing ownership documents, liaising with all involved parties, and ensuring that the legal requirements are met to safeguard your claim.

Missing deadlines or failing to comply with procedural rules can invalidate a claim or lead to costly delays.

Our team keeps track of all deadlines and ensures that each document and notice is properly prepared and served. We handle the legal paperwork meticulously, so you don’t have to worry about procedural errors derailing your case.

Unclear cost structures or unexpected legal fees can be a significant concern for participating leaseholders.

At Anthony Gold Solicitors, we provide transparent pricing and agree on costs upfront, so you know what to expect. This clarity helps you budget effectively and avoids surprises down the road.

Our solicitors have a strong track record of successfully guiding leaseholders through collective enfranchisement, tackling challenges with skill and efficiency.

We offer tailored advice and clear communication, so you’re always informed and confident in your next steps. Every client’s situation is unique, and we treat it as such.

We provide clear, upfront pricing to avoid surprises. You’ll know what to expect, helping you budget and plan without stress.

From initial consultation through to post-purchase management, we handle every detail to ensure a smooth process, safeguarding your investment and interests.