Collective Enfranchisement: The Process - By: Tim Bishop

Taking the first steps towards buying the freehold interest to your building (which is referred to as leasehold or collective enfranchisement) can be quite daunting as the process appears quite complex. This article looks at the process in more detail and what benefits it may bring to you. We have devised a checklist which can help you ensure that you have followed the right processes.

1) You need to make sure you are eligible to purchase the freehold. If your building only contains two flats then both tenants must be in agreement. If you live in a multi-occupancy building, then 50% of tenants need to be on board. You also all need to have leases that were originally for 21 years or longer.

2) You need to decide how you are going to approach the current landlord or freeholder to assert your right to collective enfranchisement. This will generally involve appointing a nominee purchaser to act on your behalf, most commonly done through the formation of a private limited company (Plc) created by the tenants involved in the purchase.

3) Do you have all the information needed for your Initial Notice? This is the first thing you have to serve your current freeholder with and you need to make sure it's robust to minimise the chance of rejection.

4) Do you have enough funds to cover the costs of the freehold and all the associated costs involved in leasehold enfranchisement? It is difficult to provide estimations on what freehold's cost as it varies a lot in different cases. A specialist enfranchisement solicitor, however will give you a good idea of the legal costs or you will need a specialist surveyor to value the freehold itself. You should also be aware that you're liable for the landlord's costs of the purchase.

5) Do you know what to do if the landlord rejects your claim with their counter-notice? They generally have to respond to you within two months to either accept or reject your right to purchase the freehold. If they reject it, you then have two months to appeal the decision in a county court. If your claim cannot be resolved in a county court then the judge may think it best to refer your case to a Leasehold Valuation Tribunal who can then make a decision re the collective enfranchisement.

6) Have you got enough spare time in order to manage the freehold building once it belongs to you? Once you purchase the freehold, the management of the building passes normally to the Plc formed by the tenants, so you need to be sure that this is something you could handle.

This is by no means an exhaustive exploration of leasehold enfranchise and, but hopefully it will give you an idea of the key issues surrounding it and act as a useful guide when you're looking to make an application. One thing you should be aware of is that collective enfranchisement is a difficult area of the law and many everyday solicitors will not know much about it and surveyors do not always understand it. Due to this it is crucial that you have a specialist solicitor and valuer on side to offer you advise.

About the Author

Bonallack & Bishop are specialist collective enfranchisement solicitors. For advice on leasehold enfranchisement 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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