Buying the Freehold of a Flat
If you are fed up with paying ground rent on your flat, you could consider buying the freehold. This would mean you own both the property and the land on which it is built, giving you total control.
Leasehold and freehold explained
If you are not too sure what we mean by this, then let us explain. Most flats in the UK are leasehold. This means that although you own the property, someone else owns the land on which it is built. This person is called the freeholder.
You lease the property from the freeholder for a certain period of time. When the lease expires, you have to extend it, which can be costly. The freeholder may charge you ground rent, and may also control other costs such as buildings insurance and maintenance fees.
Why buy the freehold?
Some leaseholders are unhappy about this situation. It can be galling to paying hundreds of thousands of pounds for a flat, only to have to lease it from someone else. The freeholder can also abuse their position, charging over-the-odds for ground rent and other costs.
Additionally, you may experience problems if your lease has less than 80 years remaining on it. At this stage it can be very expensive to extend, and is likely to be an unattractive proposition to potential buyers, making it difficult to sell.
Request for a Legal Consultation
Garner & Hancock realise that the prospect of pursuing a legal matter can be challenging, so we offer an initial phone consultation to discuss your options, and to give you information that will help you make the right choices affecting your case.
Buying the freehold
If you are looking for a solution to these issues, you could always buy the freehold of the building. However, there is a catch. You cannot buy the freehold on your own – you must buy it collectively with the other leaseholders. This means getting your neighbours on board.
In fact, there are a few qualifying criteria. If you meet the requirements, the freeholder is legally obliged to sell the freehold to the leaseholders. You have two options – buy the freehold through an informal agreement, or pursue the formal collective enfranchisement process.
Buying the freehold by an informal agreement
Proceeding by way of an informal agreement is the easier route to take. You should approach the freeholder and express your desire to purchase the freehold. If the freeholder is willing to co-operate, you can enter into negotiations.
The leaseholders should instruct their own legal representative. A solicitor from our team can negotiate on the price and terms. We can then draw up the paperwork and transfer the freehold over.
Buying the freehold by collective enfranchisement
Collective enfranchisement is a much more formal process. It begins when you serve a notice on the freeholder. You must also choose a nominee purchaser, establish a cost fund, agree a purchase price and the complete the necessary paperwork.
Again, it is highly recommended that you have your own solicitor. It is vital to work through each step with total accuracy. Any mistakes could be costly and may compromise the process.
Once you have purchased the freehold
Once you have purchased the freehold, you will still be bound by your lease. However, this time you will be leasing from yourself and the other flat owners. This leaves you free to extend the lease (usually for free, subject to legal fees) and democratically decide on other costs, such as maintenance fees.
If you are keen to buy the freehold of your flat, you should bear in mind that there are costs involved. These include the freeholder’s fees, stamp duty land tax and valuation fees.
Expert legal advice
If you want to buy the freehold of a flat, please contact us for expert legal advice. We can assess your eligibility. If you meet the requirements, we can explain the options open to you, guiding you through the process.
We are highly experienced in helping leaseholders buy the freehold of a building. We protect your best interests, making sure you get the best possible deal.
We believe our business begins and ends with you and your needs, as our client. Therefore, we are committed to providing the best client care and advice which will give you confidence that your matter is handled with the utmost care.
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We’re here to assist you. Simply send us your query, and we’ll provide an initial consultation to anyone seeking legal assistance. Don’t hesitate to contact us anytime for help with your legal matters.