A lease is granted for a fixed period of time. The length of the term of the lease might be 99 years, or 125 years, or even 999 years. But with each day that passes, the term of the lease decreases. This is why leases are often referred to as wasting (or diminishing) assets.
To address this, leaseholders have certain statutory rights, including:
- the right to an extended lease term of an additional 90 years (for leasehold flats)
- in conjunction with other leaseholders of other flats, the right to purchase the freehold of their block (referred to as collective enfranchisement)
- the right to an extended lease term of an additional 50 years (for leasehold houses)
- the ability to purchase the freehold reversion of their leasehold house.
What is collective enfranchisement?
Subject to meeting the qualifying criteria, leaseholders in a block of flats have a right to purchase the freehold of their block. The leaseholders join together and buy the freehold.
Qualification is key
Although leaseholders have a statutory right to purchase the freehold, this is subject to the qualifying criteria being met.
The criteria includes a minimum threshold of the number of leaseholders who participate in the collective enfranchisement. The building itself also has to qualify.
If those thresholds are not met, or if the building doesn’t qualify, then leaseholders cannot purchase the freehold.
Not only is qualification key to a successful collective enfranchisement, process is, too.
The procedure is complex, and full of bear-traps for the unwary.
The consequences of getting the process wrong can be fatal to a collective enfranchisement claim.
Calculating the premium
One of the thorniest issues in a collective enfranchisement claim can be the premium. This is the amount the leaseholders will have to pay to purchase the freehold of their block.
We’ve forged string links with expert valuation surveyors, who are on hand to assist our clients in the valuation process, and also in negotiations on premium.
Whether you’re a collective of leaseholders looking to take the first steps towards a collective enfranchisement claim, or a freeholder facing a claim, our expert team are on hand to assist.
We will guide you through the process, including:
- advising on qualification
- arranging a valuation of the premium
- drafting the claim notice (or counter notice)
- dealing with any negotiations
- representation in the First Tier Tribunal (Property Chamber) (or Leasehold Valuation Tribunal if the property is in Wales)
- drafting the transfer
- dealing with the registration at HM Land Registry
Certainty of fees
We understand our clients want certainty of fees.
Where possible, we offer fixed fees in collective enfranchisement cases.