Pros and Cons of Buying the Freehold
By Nicholas Kissen, Senior Legal Adviser This article originally appeared in Flat Living magazine, Winter 2011 It was not until...
Leaseholders who own flats can get together to buy the freehold of their building either under the law if they meet certain criteria (formal route), or by asking the freeholder to see whether they are willing to sell the freehold informally (informal route).
Under this route the freeholder and leaseholders need to follow a procedure and strict timescales set out in the law. This route offers more protection to leaseholders if they cannot agree the terms and/or the price with the freeholder. Leaseholders can in this case apply to the Tribunal to decide on the issue.
Under this route, leaseholders can approach the freeholder in the first instance and ask whether they are interested in selling them the freehold. There is no obligation on the freeholder to respond or to agree to sell following this request. If the freeholder agrees then both parties will have to negotiate.
It is worth starting the process informally as it could save time and money. But if negotiations fail, then leaseholders who comply with the criteria, can use the formal route to try and buy the freehold and go to the Tribunal if no agreement on the price or the terms can be reached.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
Download a template informal letter enquiring about lease extension of a flat, or to purchase the freehold of a house or flat
More information you might find useful:
- Collective Enfranchisement – Getting Started
- More Frequently Asked Questions on Buying the Freehold of Flats
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