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Collective Enfranchisement – Getting Started

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For a brief summary see the Collective Enfranchisement (buying the freehold of your building) fact sheet. There is an additional advice guide on the Right of First Refusal. For information about buying the freehold of leasehold houses see the advice guide Houses – Qualification and valuation for enfranchisement.


This leaflet is not meant to describe or give a full interpretation of the law; only the courts can do that. Nor does it cover every case. If you are in any doubt about your rights and duties then seek specific advice.

What is Collective Enfranchisement?

It is a right, subject to qualification, for the owners of flats in a building, and sometimes part of a building, to join together and buy the freehold of that building. The relevant Act is the Leasehold Reform Housing & Urban Development Act 1993 (as amended).

Provided at least 50% of the flats in the building, who are qualifying tenants, participate and the building qualifies the landlord cannot refuse. The procedure is quite complex and the correct notice needs to be served on the landlord, so it is advisable to use a specialist solicitor and surveyor when undertaking this process.

There is a formula in the 1993 Act which is used to calculate the amount the leaseholders will have to pay to buy the freehold, known as the premium. Again the formula is complex and a specialist surveyor would be needed to provide an estimate of the premium to participating leaseholders.

The leaseholders have to decide how they will acquire and hold the freehold and this is often via a company of which they will all be members. This will also be the nominee purchaser, who will be named in the initial notice to the landlord.

Basic Outline of the process:

The above need not necessarily be in this order and in most cases several issues will proceed together. It is important, however, that all the steps are taken and no critical area neglected. Once the Initial Notice has been served, the procedure is running and the nominee purchaser is likely to be subject to demands for information and to deadlines; a default at any stage could endanger the action.
The participating tenants are liable for the freeholder’s and any other relevant landlord’s reasonable professional fees from the moment they serve Initial Notice, whether they complete or not.

Checking Eligibility

The first action must be to check that the building qualifies and that there are enough qualifying tenants to be able to proceed.

You should first check that the building qualifies:

To qualify the building must:-

But, even if the tenant satisfies the above criteria, they will not be a qualifying tenant if any of the following cases apply:

Does the building it pass the 25% non-residential rule?:

If more than 25% of the internal floor area of the building, excluding any common parts, is neither used or intended to be used for residential purposes then the building will not qualify. This could be shops, offices etc. Please note garages and parking spaces specifically used by flats in the building will be classed as residential.

Resident landlord exemption:-

There is no right of collective enfranchisement where:-

Some properties are completely excluded from the rights of lease extension and collective enfranchisement:

If the building qualifies, you will then need to establish that there are enough qualifying tenants for a successful action. The minimum number of participating tenants must equal half the total number of flats in the building; for example, if there are 10 flats in the building, at least five of the flats of qualifying tenants must participate in the action. It should be noted that where there are only two flats in the building, both flats of qualifying tenants must participate.

Organising for Enfranchisement

Having worked through the qualification criteria, you will know the minimum numbers of tenants required to take part in the service of the Initial Notice. It may be that more than the minimum will wish to take part, or you may have to actively canvass support from your neighbours. Either way, the first suggested task is the organisation of a working group and, perhaps, the construction of some form of association or agreement to facilitate proceedings from this stage.

Participation Agreement

Where sufficient numbers are prepared to proceed, on the basis of whatever outline costs can be estimated, it is strongly recommended that all participating tenants enter into a formal participation agreement) amongst themselves to govern joint actions prior to and during the collective enfranchisement procedures – rights of voting, the negotiation and agreement of terms and, most important, the individual tenant’s financial contributions. This is particularly important for large blocks where difficulties or delays in reaching decisions could endanger the application. It can also be useful to record in an agreement what will happen after the freehold is acquired, for example, that the new freeholder will grant new leases to all those tenants participating in the purchase; this is a common outcome of enfranchisement and seen as one of its main benefits.

In small blocks, or where amounts involved are small, it may be possible to dispense with the agreement by everyone paying their share up-front. With a structure in place, tenants will be able to agree the means and finance to move to the next stage.

Choosing the Nominee Purchaser

The Nominee Purchaser is the person named in the Initial Notice, who will acquire the freehold and become the new landlord. The Nominee Purchaser must be decided upon at an early stage, in that he or she conducts the later stages of the process and, on completion, will be responsible for the management of the building.

The Nominee Purchaser can be a person, one of the tenants, or a corporate person, a trust or, more probably, a company formed by the tenants for the purpose. There are currently no controls or qualifications in the legislation governing selection of Nominee Purchasers and the tenants are free to choose whoever or whatever agency they wish.

The most common format is a company wholly owned by the tenants and, if this is the vehicle chosen by the participating tenants, the company must be established prior to being put forward in the Initial Notice. A solicitor, managing agent or accountant will be able to advise how to establish a company and can produce the Articles of Association to reflect the purpose of the company and to govern voting rights and control of shares.

Establishing the finance and a cost fund

Leaseholders may find it useful to establish a cost fund or ‘fighting fund’ to cover the initial steps – the valuation, the information gathering and arranging for the Nominee Purchaser, including setting up a company (all the early steps preceding service of the Initial Notice) and then, prior to service, to formalise future funding arrangements, including loans and mortgages.

Instructing professional advisers

To aid the preparation and serving of the Initial Notice and to assist in subsequent steps, at some point in the action tenants are advised to appoint a valuer and a solicitor.

In addition to their general advisory capacity, the roles of the two professional advisers in an action of collective enfranchisement include:

The valuer:

The solicitor:

Leaseholders should take all possible steps to ensure their chosen adviser(s) have full knowledge and experience of the legislation, practices and procedures.

Assessing the purchase price

An initial valuation of the property by a qualified valuer or surveyor is strongly recommended in order to provide enfranchising leaseholders with an idea of the final purchase figure prior to commencing the action.

As mentioned previously, there is a formula in the 1993 Act which a surveyor will use to give an estimate of the premium the participating leaseholders will have to, jointly, pay to buy the freehold.

Valuation is not an exact science and it will be virtually impossible for the valuer to provide an exact estimation of the eventual settlement figure. The valuer should however be able to provide a ‘best and worst’ figure, valuing from both leaseholders and freeholder`s  perspective and, from local experience, anticipating areas of claim and counter-claim.

There is no such thing as a finite, fixed price for a freehold and leaseholders should make themselves aware, from the beginning, of the likely range within which the price will be settled to avoid surprise at a later stage.

In considering the likely purchase price, the leaseholders `liability for the freeholder`s costs should also be borne in mind. The eventual cost to each leaseholder will be the share, not only, of the cost of the freehold but also of both the freeholder`s reasonable legal and valuation costs and also the participating leaseholders legal and valuation costs.

Further details are available in our guide Valuation for Collective Enfranchisement.

Gathering information

Prior to the serving of the Initial Notice tenants will need to amass all necessary information

The Initial Notice must be correctly served on the freeholder(s) and must include correct information on the interests of the participating tenants and any intervening interests.

In some cases the freehold interest may be in one or more different ownerships (a ‘severed’ or ‘flying’ freehold). This does not, in itself, form any obstacle to enfranchisement, but tenants will need to have details of all freeholders of the property.

You will need to obtain the following information:

Some of this information you will already know; the remainder can be obtained by a number of means set out below.

Landlord and Tenant legislation: you are entitled to obtain details of the name and address of your landlord under rights provided by the Landlord and Tenant Act 1985. The information, if requested must be provided within 21 days and failure to do so is an offence. Your ground rent demands should also carry the same details.

A problem here is that the landlord may not necessarily be the sole freeholder, but one of the freeholders or a head-lessee. It is therefore best to carry out a Land Registry search, see below.

Land Registry: as long as the property is registered (most are), you are entitled to inspect the register and to obtain copies of the entry relating to the freehold. The entry will provide the name and address of the registered owner(s) and details of any other interests in the freehold, including other freeholders, head-lessees and mortgagees. There is a small fee for copies of the register.

There are a number of District Land Registries serving the country and you should contact the nearest office to find the Registry serving the area in which your property is located (Land Registry website).

Information Notices: Section 11 of the 1993 Act provides a right for tenants to serve notices on the freeholder, the landlord (if different) or any other persons with an interest in the property, requiring details of that interest.

You can therefore require from the landlord details of any other freeholders, any intermediate leases, including the name and address of the lessee and the terms of the lease. The Information Notices can also require sight of relevant documents, for example, giving details of service charges or surveys.

The recipients of the Notices are required to respond within 28 days. The service of the Information Notice does not formally start the enfranchisement process or commit the tenants in any way and there is no liability for costs.

The right to participate

There is no right to participate or be invited to join in the freehold purchase. However, participating tenants may find it useful to ensure that all tenants are aware of their proposals, although there is at present no legal obligation to do so.

The Initial Notice

The Initial Notice triggers the statutory procedures for acquiring the freehold and the nominee purchaser is liable for the freeholder`s reasonable costs as from the date he receives the Notice. It is therefore important that the Notice is complete and contains no inaccuracies or misdescriptions, because, although these may in some cases be corrected by application to the county court, it is an area of expense to be avoided. An incomplete Notice can be rejected as invalid.

A protection for the enfranchising tenants is provided by the right to register the Initial Notice with the Land Registry. This provides protection for the company against the landlord’s sale of the freehold since any purchaser of the freehold, subsequent to the registration of the Initial Notice, will take the freehold subject to the application for enfranchisement. The procedure will therefore be able to continue as though the new owner had originally received the Initial Notice.

The service of the Initial Notice also fixes the ‘valuation date’ as the same date that the Initial Notice is served. The valuation date is the date on which the variables affecting the price of the freehold are set, for example, the remaining number of years left on the leases, the present values of the flats and their assumed future value. Therefore, however long the negotiation or determination of the price takes, it will be based on the factors applying on the date of the service of the Initial Notice.

The information required in the Notice is set out in . It is advisable to instruct a solicitor for the preparation and service of the Initial Notice.

Absent landlords

If, after all reasonable efforts, the freeholder cannot be found, this should not prove an obstacle to enfranchisement; the issue can be resolved in other ways:

If the court is satisfied with the efforts made and qualification, then it will, in effect, sell the freehold to the tenants in the freeholder’s absence. This is subject to application to the First-tier Tribunal (Property Chamber) (“the Tribunal”) for determination of the price. The price is paid to the County Court.

Deployment Pilot

The Tribunal is running a pilot scheme under which it will deal with cases that would usually have been dealt with in the County Court as well as in the Tribunal. The intention is to deal with cases in the Tribunal which would otherwise have been considered in separate hearings before the Court and the Tribunal.

Missing landlord cases under the Leasehold Reform Housing and Urban Development Act 1993 is one example of the type of cases that will be dealt with under the Deployment Pilot.

The Tribunal will only be deciding further county court issues if all the parties consent.

When the case is concluded the Tribunal will make a County Court order and issue a Tribunal decision.

Preparing for subsequent procedures

After the service of the Initial Notice the landlord is entitled to require evidence of the participating leaseholders` title to their flats. If title is registered, which most is, this would be by producing an official copy of the relevant entry at the Land Registry. The landlord has a period of 21 days from the giving of the Initial Notice in which to request the information. Where this information is required it must be provided within 21 days.  In the event that title is not deduced in respect of any leaseholder(s) and if the initial notice could not have been given without that person(s) participating, the Initial Notice would be deemed withdrawn, with costs payable to the freeholder.

Where an Initial Notice is withdrawn, or deemed to be withdrawn, a new Notice cannot be served again for another 12 months, beginning with the date of the withdrawal.

The landlord has the right to inspect the property, including the participating tenants’ flats, subject to 10 days notice given to the occupier.

The landlord’s Counter-Notice

The landlord must serve his Counter-Notice by the date specified in the Initial Notice; this must:


The freeholder will not be obliged to sell the freehold if he can prove to the court that he intends to demolish and redevelop the whole or a substantial part of the building. This can only apply where at least two-thirds of all the leases in the building are due to terminate within a period of five years from the date of service of the Initial Notice.


Where the freeholder owns a flat, or flats, in the building which are not let to a qualifying tenant, he has the option of taking a leaseback on the flat(s) on a 999 year lease. A local authority freeholder or Housing Association must take a leaseback where they have a “secure tenant “in one or more flats in their building.

Where there is a leaseback the value of the flat(s) is deducted from the calculations. Where, after service of the freeholder’s Counter-Notice, the Nominee Purchaser and the freeholder cannot agree on the price or some other aspects of the conveyance, then after the initial two months, following service of the Counter-Notice, either party can apply to the Tribunal for an independent determination on the issue. Clearly, the leaseholders`’ professional advisers must have all relevant documents at hand to deal with such an application.

In cases where the freeholder fails to serve a Counter-Notice by the date specified in the Initial Notice, the participating leaseholders may apply to the county court for a Vesting Order. This is an order allowing them to acquire the freehold on the terms of the Initial Notice (including the premium proposed). The court, if satisfied of the right to enfranchise, will grant the Order. The application must be made to the court within six months of the date on which the Counter-Notice should have been received.

Further advice and guidance on the law is available from the Leasehold Advisory Service at any time during the preparation stage or following commencement of the action.

Procedures and statutory time limits

The Initial Notice

The requirements of the Initial Notice are set out in S13 of the 1993 Act

It must include the following:

Where the freehold is severed (in different ownerships) the participating leaseholders must decide which of the freeholders is to be considered as the reversioner for the purpose of receiving the Notice and for future dealings in the process. Some care should be taken in this selection since the freeholders have the right to go to court for an order to change the reversioner to another of their number, with possible cost implications to the leaseholders. Generally the major freeholder – the freeholder with the greater share of the freehold – should be chosen as reversioner. Copies of the Notice must be served on all other freeholders.

The Notice must be signed by or on behalf of all the participating tenants. Leaseholders in England are no longer be required to sign notices personally when exercising rights under the 1993 Act.

The Initial Notice must be served on the freeholder and any other person known or believed to be a ‘relevant landlord’, i.e.  an intermediate landlord, or head- lessor or other freeholder in the situation of a severed freehold mentioned above.

LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.