Purchasing the freehold on your property

Purchasing the freehold on your property

According to RE/MAX, depending on whether your home is a flat or house will determine the process required to purchase the freehold of the property.

London Regional Director, Peggy Su, is keen to point out that provided they meet the necessary criteria; they have the legal right under the Leasehold Reform, Housing and Development Act 1993 to act together to purchase the freehold of the building they reside in.

Peggy Su, had this to say: “A group of leaseholders purchasing the freehold together is known as a collective enfranchisement, and is considered to be the more formal way of obtaining the freehold."

She notes that the Act lays out a procedure and timescales to be adhered to should the leaseholders decide to acquire the freehold in this manner. If leaseholders decide to follow the formal route, the Property Chamber, also known as the First-tier Tribunal, can determine the prices and terms of the transaction if the parties fail to agree.

“A less formal way would be for the leaseholders to negotiate with the freeholder and acquire the building by agreement. In this situation, there is no right to purchase the freehold, and as a result, the leaseholders will not be able to approach the Property Chamber to determine the terms. Even so, depending on a few aspects the agreement remains enforceable through a County Court.”

In the case where the property is a house, rather than a flat, the leaseholder's legal rights will be governed by the Leasehold Reform Act 1967, however, they will still have the two routes to acquire the freehold – namely formal and informal.  With the introduction of the Commonhold and Leasehold Reform Act 2002, some of the clauses in both the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Development Act 1993 have been amended, which will impact the specific procedures that each route requires for a successful acquistion of the freehold.

If for any reason it is the freeholder who wishes to sell the freehold, they are required to offer it to the leaseholders before opening the offer up to any other potential buyers. This is known as the leaseholder right of first refusal.

Peggy Su concludes: "While leaseholder has the right to ask the freeholder if they can purchase the freehold at any time, the process can be somewhat complicated to negotiate. Ideally, before any leaseholder decides to attempt acquiring the freehold of the property they should seek out the professional advice of a solicitor and surveyor with knowledge and experience in this area.”

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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