The 1993 Leasehold Reform Act (as amended) provides the right for the leaseholders to acquire the Freehold of their properties.
The Lessees can then run & have control of the building themselves.
You should arrange your finances before you commence.
Recent court cases have decided that offers made in notices that cannot be justified in Valuation Terms render the notice invalid. A Professional Valuation is important not only to ensure that you know what you should pay but also to ensure you do not waste time and money.
The purchase is carried out through a Nominee Purchaser who is the person specified in the Initial Notice to the freeholder who will acquire the freehold. This can be either a lessee, a group of lessees a management company owned by the (or a number of) lessees.
Eligibility – DOES THE BUILDING ‘QUALIFY'?
The building must comply and there must be enough qualifying leaseholders to serve notice.
For the building to qualify it must have:
No more than 25% of the internal floor area of the property can be non-residential, and
At least two-thirds of the flats must be let to `qualifying leaseholders'
The minimum number of leaseholders is:
Not less than half of the number of flats in the building.
Where there are only two flats both leaseholders must participate.
There is no right to enfranchisement (but there is a right to extend the lease) where: The building is a flat conversion of four or fewer flats; AND the freeholder has owned since before the conversion; AND he or an adult member of his family is in residence during the past twelve months
- Buildings within a cathedral precinct
- National Trust properties
- Crown properties
(Although the Crown is not bound by the legislation the Minister has made a statement to the House of Commons that the Crown will be prepared to comply with the principles of it.)
Eligibility – ‘Qualifying’ Leaseholders
To 'qualify' as a leaseholder you must own a ‘long lease’ and have been the owner during the past two years; not as a business or commercial tenant. You do not need to have occupied for this period, simply owned the lease for at least two years.
A ‘long lease’ is defined as:
* A lease granted for in excess of 21 years.
* Leases which contain a covenant providing a right of perpetual renewal.
* A lease that ends on death or marriage or a date unknown.
* A leaseholder having held over at the expiry of a long lease, and the landlord has not served a notice terminating the tenancy.
* A shared ownership lease where the leaseholders' share is 100%.