Freehold Enfranchisement

Julian Wilkins & Co. Chartered Surveyors are specialists in freehold enfranchisement of blocks of flats and houses throughout the South East and London region.

Under the 1993 Leasehold Reform, Housing & Urban Development Act, groups of leaseholders in blocks of flats have a collective right to force the freeholder to sell the freehold to them.

Leaseholders of houses also enjoy the right to purchase their freehold under the 1967 Leasehold Reform Act.

Our Chartered Surveyors have extensive experience acting for leaseholders throughout their freehold enfranchisement process. Each year we successfully settle a large number of cases on behalf of our clients who wish to collectively (flats) or individually (houses) purchase their freehold.

The enfranchisement process can be daunting and stressful. Our team work hard to ensure that all leaseholders are provided with the very best personal service all through your relationship with us.

We can advise on eligibility and our Chartered Surveyors can undertake the necessary enfranchisement valuations and the subsequent negotiations with the freeholder’s valuer.

In the occasional case (where agreement cannot be reached) we can assist in the necessary preparation and representation at a First Tier Property Tribunal. Our Director, Julian Wilkins MRICS is an RICS registered Expert Witness and has successfully represented clients in a number of cases taken through to tribunal for determination.

We work closely with all leaseholders involved and their chosen legal professionals, ensuring every participant is kept up to date and informed with the very best advice at each stage of the process.

Our valuation fees are fixed and competitively priced so that you can be fully aware of your costs. Our negotiation fees are normally charged on a time cost basis and are capped at an upper limit ensuring a saving is always made and so that you are not subjected to any unexpected costs. We can also introduce you to specialist solicitors who also offer competitive fee options.

We are also able to act for freeholders in enfranchisement cases, if you are a freeholder requiring an enfranchisement valuation please get in touch with us to discuss your requirements.

Freehold Enfranchisement FAQs

Why should a group of leaseholders consider purchasing the freehold of their block?

The main reasons for leaseholders to purchase their freeholds include being unhappy about the level of maintenance, management or insurance charges payable to the freeholder, poor standard of maintenance works to the block and short unexpired lease terms.

Why is the purchase of the freehold beneficial?

Some freeholders charge excessively high insurance and maintenance charges often for low standard work. The purchase of the freehold means that the purchasing leaseholders take over responsibility for the insurance and maintenance. Costs are then often reduced and the standard of works improved.

Unless the block is very small, leaseholders will probably still require the services of a managing agent to undertake the management function. However, as the new freeholders you will be able to choose a reputable managing agent and the agent will be answerable to you.

Those leaseholders participating in the purchase of the freehold will be able to extend their leases for nothing more than the cost of the legal work, no further premiums. In addition, if there are any non-participating leaseholders (those who have not joined in with the purchase of the freehold), then these leaseholders will have to pay their ground rent to the leaseholders who own the freehold. They will also have to pay an appropriate premium if they then want to extend their leases. This income then becomes profit for the participating leaseholders and is apportioned between them and is not part of the management or maintenance funds.

After the purchase of the freehold, the participating leaseholders will have direct control and responsibility for the management, maintenance and insurance of the block. As well as costs often being reduced, they can also be spread out over a number of years.

Are you eligible to enfranchise (purchase) your freehold?

There are specific requirements which both leaseholders and the property they wish to purchase must satisfy to comply with the terms of the 1993 Act and 1967 Act.

A brief summary of the 1993 Act requirements;

Firstly, the block must be self-contained (terraced and semi-detached blocks are acceptable as long as they are self-contained). The block must contain at least 2 flats and at least two thirds of the flats in the block must be held by qualifying tenants. Not more than 25% of the internal floor area of the block can be in non-residential use.

Secondly, for a leaseholder to be a qualifying tenant and therefore entitled to participate, a leaseholder must hold their flat on a lease originally granted for a term of more than 21 years. Enfranchisement under the 1993 Act then requires a minimum of 50% of the flat leaseholders (qualifying tenants) in the block to participate in the action. If there are only two flats in a block then both leaseholders need to be qualifying tenants and both need to participate.

The requirements under the 1967 Act set out that the property must reasonably be considered a house and that it must be held on a lease that was originally longer than 21 years. The tenant must have owned the house for at least two years. Where an eligible tenant has died their representatives can serve notice within two years of probate being granted.

These qualification rules are often confusing. We are always happy to provide help and guidance on this to leaseholders prior to any formal instructions.

How do you enfranchise your block?

Check eligibility
Decide how many leaseholders wish to participate in the enfranchisement.
Obtain a valuation in order to determine both the amount to offer the freeholder, and also to ensure that the individual leaseholders are aware of their likely financial commitment.
The leaseholders chosen solicitor should then draw up a participation agreement which all the participating leaseholders agree to and sign. This commits the leaseholders to proceed.
Your solicitor then serves a formal notice on the freeholder to claim your right to purchase the freehold. The freeholder will undoubtedly respond to this by serving a counter notice. This has to be done within two months, and will typically request a higher premium payment. Once this counter notice is received there is a maximum six months negotiation period however after an initial two months either party can refer the matter to the First Tier Tribunal (FTT) for determination. As well as the amount of the premium payable, the FTT can also determine the amount of the freeholder’s costs. Freeholders cannot recover their costs at an FTT hearing as unlike ordinary court proceedings each party has to bear their own costs. You should note that very few cases actually proceed to an FTT hearing with the vast majority being settled within the negotiation period.
As part of the final agreed terms, participating leaseholders will have to pay the freeholders valuation fee and legal fees relating to receiving the notice, serving the counter notice and preparing and completing the legal transfer. Other costs such as the costs of negotiation, any costs relating to preparing for and appearing at an FTT or administration costs cannot be recovered.

Freehold Enfranchisement