Are you tired of being a leaseholder? Would you like to own the freehold of your building, so you can make your own decisions without being subject to your landlord’s whims?
You may not be aware that subject to various qualifying criteria, tenants who hold long leases of flats have a collective right to buy the freehold of the building containing those flats together with any common areas (e.g. gardens and car parks).
This is known as collective enfranchisement.
Can tenants insist a landlord sells them the freehold?
Yes, subject to conditions. If half the tenants in the building qualify and the building itself meets the criteria, the landlord cannot refuse.
What is a ‘qualifying tenant’?
A qualifying tenant is any tenant who holds a long lease on a property, including a flat within the building. However, a person cannot be a qualifying tenant if they own more than two flats in the building.
How is a ‘qualifying building’ defined?
To be classed as a ‘qualifying building’ the building must be the whole, or a structurally separate part (by virtue of a vertical division), of a self-contained building. It does not matter that the part selected would be capable of further subdivision into parts which would each still comply with the definition of a building.
the building must contain two or more flats held by qualifying tenants
at least two-thirds of all the flats in the building must be held by qualifying tenants
no more than 25% of the internal floor area can be occupied or intended to be occupied for non-residential use. Common parts (i.e. the structure and exterior of the building and any common facilities within it) are ignored when calculating the non-residential use parts of the building
Which buildings do not qualify for collective enfranchisement?
The right to collective enfranchisement cannot be exercised if the building:
was not a purpose-built block of flats and was converted by its freehold owner into four or less flats, one of which has been occupied by that person as their only or main residence, for the previous twelve months
is owned by the Crown Estate. The position opposite the Crown Estate will depend on whether the property is in a non-excepted area or an excepted area
is owned freehold by the National Trust as part of its inalienable estate
is within a cathedral precinct
forms part of a property where the freehold includes an operational railway track (i.e. where a block of flats is built over, as opposed to adjacent to, a railway line)
What is the process for applying for collective enfranchisement?
The general process for applying for collective enfranchisement is as follows:
check the eligibility of the building and tenants
choose the Nominee Purchaser (they will be named on the initial notice to the landlord, often this is a company formed by the tenants)
instruct a solicitor and surveyor (to obtain a correct valuation of the building)
service notice on the landlord
the landlord serves their counter-notice
Collective enfranchisements is a specialist area of law. It is imperative to instruct a solicitor who has experience in this area to advise you.
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