Buying a freehold
I want to collectively buy my freehold
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Buying my Freehold, collectively
The Leasehold Reform Housing and Urban Development Act 1993 entitles qualifying leaseholders to collectively buy their freehold.
Do I qualify?
You qualify if:
- 50% or more of leaseholders are participating (if there are only two properties in a block, then both must participate)
- The original lease must be in excess of 21 years
- Charitable housing trusts, properties in a cathedral precinct, etc are exempt
- If Freeholder converted / has lived there before and after conversion / been there for past 12 months
- There cannot be more than 25% commercial use
- It cannot contain more than two plots
- More than two-thirds must be qualifying tenants
- Vertical division
What is the process of collectively buying my Freehold?
- Instruct a solicitor to draw up a participation agreement.
- Instruct a surveyor to carry out a valuation.
- Instruct a solicitor to serve a [Section 13 notice]
- The freeholder has a maximum of 2 months to respond with a Section 21 notice.
- Instruct a surveyor to negotiate a fair and reasonable premium.
- If a premium is not agreed before 6 months has passed from the Section 21 Notice, this is the latest an application to the First Tier Tribunal can be made.
- Solicitors agree terms of the new lease.
- Upon agreement of the terms, there is 4 months to complete the process.
To discuss the process in greater detail and receive a quote, contact one of our experts.
What is a Freehold?
A Freehold is the complete ownership of a piece of land and all immovable structures built on it.
If you buy a freehold, you are responsible for maintaining your property and land, so you will need to budget for both these costs. Most houses are freehold but some might be leasehold, usually through share-ownership schemes.
What is a Participation Agreement?
A participation agreement is a contract between all the leaseholders of a property participating together in the joint purchase of their freehold and it provides a legal basis for the action.
What is a Section 42 Notice?
A Section 42 Notice (also known as a Tenant’s Notice) is served on the landlord/ freeholder of a property and starts the purchase of the freehold or lease extension process. Once a valuation of the property has been carried out by your surveyor they will send the valuation on to your solicitor.
Next, your solicitor will serve a Section 42 Notice on your landlord/freeholder advising the amount you are willing to pay for the freehold.
What is the First Tier Tribunal?
The First Tier Tribunal is part of the court system in the United Kingdom. The First Tier Tribunal (Property Chamber) has 5 regional offices throughout England that deal with settling disputes in relation to leasehold property and the private rented sector.
Tribunal hearings are quite informal, you can state your own case or have a friend or professional speak for you. The tribunal normally sits as a panel of 3 consisting of one legally trained member, one surveyor and one lay (ordinary) person to provide a balanced view. The panel have control over the court hearing and decide in which order things are dealt with.