If you own a leasehold flat, you and the other flat owners in your building may be able to buy the freehold of your homes under a process called collective enfranchisement.
At Bird & Co, we have a specialist residential property team with experience advising clients across the UK in relation to all aspects of buying, selling and owning leasehold property and enfranchisement.
Although the process of purchasing your flat building can be complex, we will provide all the information you need to proceed. We will address all legal documentation with precise attention to detail to ensure the transaction is completed cost-effectively and to the highest possible standards.
Our collective enfranchisement solicitors’ expertise
Our service is fully inclusive, covering every aspect of the collective enfranchisement process. When you instruct us, we can offer you:
- Specialist advice on the rights and obligations associated with owning a leasehold property, including:
- Lease extension
- Right to manage
- Residents’ associations/tenants’ associations
- Right of first refusal to buy the freehold of your building
- Residential management issues
- Specialist advice on the legal process of collective enfranchisement, including your eligibility, serving notice on the freeholders, and advice on resolving disputes
- Assisting with the organisation of enfranchisement, including drafting and reviewing Participation Agreements (the contract between the enfranchising leaseholders)
- Serving notice on the freeholder and responding to any challenges to your entitlement to enfranchise
- Liaising with relevant third parties, such as your surveyor or valuer and the freeholder’s solicitors
- Assisting with First-Tier Tribunal (Property Chamber) applications
- Handling the conveyancing and ensuring the transaction is completed with meticulous attention to detail
What is collective enfranchisement?
Also referred to as leasehold enfranchisement, collective enfranchisement is the process by which flat owners within a building (or part of a building) can collectively purchase the freehold from the landlord.
Enfranchising will allow you to grant, renew and extend leases, set service charges and other fees, and take over the management of the building.
You and the other leaseholders will need to choose a Nominee Purchaser to become the new landlord. Typically, this will be a company set up for the specific purpose of owning the freehold.
The enfranchisement process is complex, so it is important to instruct a specialist solicitor to handle the legal parts of the purchase on your behalf.
Am I eligible to enfranchise?
To be eligible for collective enfranchisement:
- At least 50% of the leaseholders in the building must agree to enfranchise
- These leaseholders must all be qualifying tenants
- The building must qualify for enfranchisement
To be a qualifying tenant, you should:
- Have owned the lease for at least two years
- Have a lease that was at least 21 years when initially granted
- Not own a business or commercial lease
- Not own more than two flats in the building
- Not have a charitable housing trust for a landlord where the flat is provided as part of the charity’s functions
To be a qualifying building, it must:
- Be occupied by at least two thirds qualifying tenants
- Have at least 75% of the internal floor space be used for residential purposes (other than common areas)
Can the landlord refuse to sell?
If you use the legal process under the Leasehold Reform, Housing and Urban Development Act 1993, the landlord cannot refuse to sell you the freehold other than in certain circumstances, including if they intend to demolish and redevelop all or most of the building.
If you are eligible to enfranchise but you cannot come to an agreement with your landlord on the purchase premium, you have the right to apply to the First-Tier Tribunal (Property Chamber) for an independent decision about what is a fair price.
However, if you do not use the formal legal process, the landlord cannot be compelled to sell and you cannot apply to the Tribunal for a decision on the purchase premium.
What is a Participation Agreement?
You should always enter into a Participation Agreement with the other flat owners taking part in the enfranchisement to regulate your relationship.
A Participation Agreement is legal document that sets out the terms of the arrangement, including the financial contribution each leaseholder is prepared to make. It should also set out what should happen after the enfranchisement is complete, such as how management of the building will work going forward.
What happens after collective enfranchisement?
Upon successfully enfranchising, you and the other flat owners will need to take care of issues such as:
- Granting new leases to yourselves
- Setting service charges and other fees
- Choosing an agent to take over management of the building
- Making an agreement about how to resolve any disputes between flat owners
- Creating a sinking fund to cover the cost of the building’s maintenance, improvements, and essential work
Our other leasehold services
Collective enfranchisement isn’t right for every flat owner. However, it is not your only option for boosting the value of your ownership. Our highly skilled residential property solicitors can also provide advice about:
- Leasehold extension – making the term of your lease longer is likely to boost the value of your home as well as making your ownership more secure
- Freehold purchase of house – if you own a leasehold house, you also have the legal right to purchase the freehold if you are a qualifying tenant
Why instruct our collective enfranchisement solicitors?
Bird & Co is a firm of legal specialists with particular expertise in the area of residential property law. We offer a wide range of practical advice and a friendly, bespoke service all for a proportionate cost.
We are members of the Law Society Conveyancing Quality Scheme for the high level of our expertise in residential property matters. We are also Lexcel Accredited for our legal practice management and excellent client care.
We attract clients from across the UK for the quality and convenience of our services. We have developed a niche in online conveyancing which allows our clients to manage their property transaction around their busy lives. Our systems are completely secure and we are Cyber Essentials certified, allowing us to exchange confidential legal documents without any risk to yourself.
Our collective enfranchisement solicitors’ fees
When it comes to collectively enfranchising, we understand that your greatest concern will relate to costs. At the beginning of your case, we will provide upfront, transparent information about our fees and the other costs you could expect to encounter throughout the matter. We will also discuss your funding options; we will provide fixed fee quotes wherever possible as well as a range of other flexible options.
For more general information, please visit Our Fees page.