How Can I Buy the Freehold on My Property?
Legislation in England and Wales makes it possible for leaseholders to buy the freehold on their property from the freeholder.
As a leaseholder, you might live in a building divided into flats, whereby you only own the flat you occupy. You don’t own the land or the building outright. Or, you might own a lease on a house, with the building and the land belonging to someone else - the freeholder, an individual or organisation.
Our Conveyancers and Conveyancing Solicitors can help you to buy the freehold on your house or flat. This can give you greater control over the management and maintenance of the property and can eliminate doubling ground rents.
Our Conveyancing specialists can negotiate with the freeholder on your behalf, keeping you fully informed on how we are working for you, either for groups of tenants, or individuals.
For free initial advice contact our Conveyancers and Conveyancing Solicitors.
Buying the Freehold on a House or a Flat
As a leaseholder, you’ll fall into one of two categories, and the laws around buying the freehold are different, depending on whether you are:
- Living in a house - where you may have the right to buy the freehold
- Living in a flat/an apartment - where you’ll need to buy a share of the freehold
Advantages of Buying the Freehold
Buying the freehold on a house or flat comes with many advantages, including:
- Adding value to the property
- Avoiding the lease expiring
- Making the property easier to sell
- Greater control over the management and maintenance
- More control over service charges and fewer conditions. For example, pets.
How to Buy the Freehold on a House
If you’re a leasehold tenant in a house, you have the right, under the Leasehold Reform Act 1967, to buy the freehold, if you meet certain criteria. This is what is known as Qualifying for Enfranchisement.
The house, which you must be the leaseholder on, must be reasonably considered a house and divided vertically from any adjoining house. Your lease on the property must be for a term of more than 21 years or with a right to renew. You must also have held the lease for the past two years.
This gives you the right to buy the freehold and the premises, including any garages, outhouses, gardens and any items let to the leaseholder with the lease.
The Process for Houses
Once you know you’re qualified to purchase the freehold, you start by serving a Tenants Notice to the freeholder or freeholders.
The freeholder then has two months to serve a Notice in Reply. If they don’t do this, it might be because they don’t agree on the proposed valuation and want to negotiate. If they do reply, they must state whether they admit your Claim to Buy, and if not, they must state their reasons.
If a price is agreed to buy the freehold, the sale should take place at least four weeks after a price is agreed. If not, then you can apply to the First-Tier Tribunal for a decision on the price.
Certain complications may arise during this process, so we would advise you to instruct one of our Conveyancing Solicitors to deal with the entire process for you.
How Can I Buy the Freehold on My Flat / Apartment?
If you own a flat inside a building, you and your neighbours can group together to buy the freehold. You enter a process known as Collective Enfranchisement, making it easier to buy the freehold outright.
You have the right to do this under the Leasehold Reform, Housing and Urban Development Act 1993. To do so you’ll need to secure the co-operation of your neighbours, and know that continued cooperation is vital, finding a consensus on certain matters on a long term basis.
The freeholder may be in a position to sell, and this means, as a tenant you have the Right of First Refusal. The freeholder is legally obliged to offer you the opportunity to buy the freehold before it goes on the market. However, you can approach the freeholder at any time and make an offer to buy.
How to Buy the Freehold on a Flat
The first thing to do is to check that you are eligible to buy the freehold. Generally, the criteria are:
- There are at least 21 years left on the lease
- 50% of leaseholders in the building are taking part in the purchase
- At least two-thirds of the flats are held by qualifying owners
- There are at least two properties in the building.
You’ll then need to set up a limited company and enter into a participation agreement. Once instructed, our Conveyancing Solicitors will guide you through these agreements, so you are agreed on terms, rights and responsibilities.
An Initial Notice is then served to the freeholder, stating how you intend to pay for the freehold and at what price. Our Conveyancers can get a professional valuation done if you want to be completely accurate.
The freeholder then has a two-month timeframe to serve a Counter Notice, stating whether or not they accept the proposed terms of sale. Negotiation is then entered into and a further two months is allowed for this to agree on the price and acquisition terms.
How Simpson Millar Can Help You
Due to the complexities of Property Law, we would advise you to instruct one of our specialist Conveyancing Solicitors early on. We can provide expert advice in areas such as:
- Eligibility for individual purchase or collective enfranchisement
- Participation Agreements
- Initial Notices
- Right of First Refusal
- Resident’s Associations
- Right to Manage
It’s our job to give you full support through your freehold purchase and to make sure you're clear on all aspects it. We'll do all we can to make sure that your freehold purchase is as stress free as possible.
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