Making an offer

Once the nominee purchaser has the valuation, they can prepare to make an offer to the freeholder through an initial notice.

Preparing to make an offer involves:

• deciding on how much to offer
• gathering information for the initial notice
• drafting and serving the initial notice

The initial notice is the formal first step in collective enfranchisement. It informs the freeholder that the nominee purchaser will buy the freehold to the building in accordance with legislation (the Leasehold Reform, Housing and Urban Development Act 1993).

The nominee purchaser will be liable for the freeholder’s reasonable costs from the date they are served with the initial notice.

You should instruct your solicitor to prepare and serve the initial notice. It’s important that the notice is done correctly, as mistakes can cause problems.

The valuer will advise on what price to offer to pay for the freehold in the initial notice.

When considering the offered price, remember that each participating leaseholder will have to pay their share of:

• the total price of the freehold
• the participating leaseholders’ legal and valuation costs
• the freeholder’s reasonable legal and valuation costs

The initial notice needs to be complete and accurate, or it could be declared invalid. You’ll need to find and check certain information before creating the notice.

You’ll need:

• the name and address of the freeholder(s) – this could be a person or persons, or a company
• the names and addresses of all leaseholders in the building and details of their leases

Where these exist, you’ll also need:

• details of any headlease over the building
• the name and address of any head lessees
• details of any flats in the building that the landlord lets out on periodic tenancies

While you can usually find your landlord’s details on your ground rent and service charge bills, those will not include possible additional freeholders or a head lessee.

You should either:

• search for land and property information on GOV.UK for a small fee
• serve the landlord with an information notice (under Section 11 of the Leasehold Reform, Housing and Urban Development Act 1993), requiring them to provide within 28 days the names and addresses of anyone with an interest in the property

If you still cannot find the freeholder, see our guide on finding an absent landlord.

Your solicitor should create the initial notice with your input.

It must include:

• details of the property to be acquired, including a plan
• details of any additional land the leaseholders want and have a right to (for example garages) and any proposed rights of way over land not acquired
• a statement that the property and any additional lands qualify for the right of collective enfranchisement on the date the initial notice is served
• details of any leasehold interests (for example an intervening head lease, or any flats subject to mandatory leaseback to the freeholder)
• the proposed price (including the cost for any intermediate interests)
• the full name and addresses of all qualifying leaseholders
• details of each of their leases, including the date the lease was entered into, the date of commencement and the term
• the name and address of the nominee purchaser
• the deadline for the freeholder’s counter-notice (at least 2 months after the initial notice is served)

The notice must be signed by or on behalf of all participating leaseholders. In England and Wales, digital signatures can be used.

Your solicitor will normally serve the initial notice to the freeholder on your behalf.

Serving the notice:

• starts the statutory process under the 1993 Act
• fixes the valuation date, which is used to assess the price
• gives the freeholder and any intermediate landlords official notice of your claim

If the initial notice is later withdrawn, it cannot be resubmitted for 12 months from the date of withdrawal or deemed withdrawal.

Who to serve

If there is more than one freeholder or intermediate landlord:

• identify the relevant landlord – the person or company that holds the immediate reversion to the participating leases (this will usually be the freeholder with the largest share of the freehold)
• serve the initial notice on that landlord (the reversioner)
• copy in all other freeholders, intermediate landlords and head lessees

This avoids later challenges about whether the notice was served properly.

Registration of the notice

Your solicitor should register the initial notice with the Land Registry against the freehold title. This protects the participating leaseholders’ interests by letting potential buyers or lenders know that a collective enfranchisement claim is in progress.