Freeholder wants to sell

Freeholder wants to sell the freehold

The Landlord and Tenant Act 1987, as amended by the Housing Act 1996 provides “The Right of First Refusal”. This states, by law, that the freeholders must offer the freehold to the leaseholder before offering it on the open market.

The freeholder must serve the leaseholders with a Section 5 notice and provide time for them to consider the offer. The freeholder can not sell to another party in that time, not offer the freehold for less than proposed in the notice.

What is the enfranchisement process?

• Instruct a solicitor to draw up a participation agreement.
• Instruct a surveyor to carry out a valuation. 
• Instruct a solicitor to serve a Section 42 notice.
• The freeholder has a maximum of 2 months to respond with a Section 42 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 42 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.

Note: Full Act

Under the Leasehold Reform, Housing and Urban Development Act 1993 qualifying leaseholders are entitled to purchase the freehold as long as there are 50% or more qualifying tenants participating in the enfranchisement claim. The original lease must be in excess of 21 years.