Advantages of Collective Enfranchisement - By: Tim Bishop

If you are thinking about collective enfranchisement and what benefits it could bring to you, you might think that the process appears a little complicated. You would be correct in thinking however that these benefits do outweigh any complications of the process itself and collective enfranchisement is a positive move for most tenants with long leases. This article considers the collective enfranchisement process and the benefits of freehold purchase in more detail.

Firstly, it means you can make the most of your building. By joining together with your fellow tenants to buy the freehold, you will gain control of the building. This allows you to decide upon what your aims are and then use these in real life. Having an idea of why you want to go ahead with freehold purchase is an excellent thing to back up your application.

Secondly, there are financial benefits to be had from collective enfranchisement. If you successfully purchase the freehold on your block of flats, then your property will increase in value straight away. It will generally keep on increasing the value too, more often than not above the price of the freehold purchase, meaning it's a good investment.

Thirdly, linked to this, owning the building means you will be likely to reduce the costs associated with living there. This is particularly true of insurance and maintenance. This is also due to the fact that tenant-owned buldings are run with the main aim of getting better deals for tenants. Also, as a participant in the collective enfranchisement, once the purchase goes through you will no longer have to pay any ground rent as you will be an owner, not a leaseholder.

Fourthly, buying the freehold means that the management for the building will pass to those tenants who joined together to purchase it. It will give you a larger amount of control over the maintenance of the building and what is done to it.

Lastly, as tenants will get together and created a limited by shares company, this company will then buy the freehold on all of their behalfs, it can then grant them all with a 999 year lease. So collective enfranchisement not only adds further value to the property, but also gives security to all tenants who may otherwise have been subject to short leases.

About the Author

Bonallack & Bishop are specialist collective enfranchisement solicitors. For advice on freehold purchase, contact them today. Senior Partner Tim Bishop is responsible for all major strategic decisions at the firm, which he has grown by 1000% in 13 years. He sees himself as a businessman who owns a law firm.

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