Collective enfranchisement can be a long and drawn-out process, particularly if problems are encountered along the way. In life, different circumstances can crop up and mean that sometimes things have to take an about-turn. There may well be a situation in which you are wholeheartedly going along with an enfranchisement effort and a life event gets in the way which means that you have to sell your flat before the process is complete. These can cause some problems, but not ones which are unsurmountable.
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First stop – the participation agreement
A well-run freehold purchase project will begin with a Participation Agreement, which obliges each participant to pay for their share of the freehold once the process is complete – and furthermore, that if they wish to sell their flat before the process is complete, that must be to a buyer who agrees to take his or her place in the process of collective enfranchisement. Leasehold enfranchisement in itself doesn’t stop somebody from selling their flat, so long as there is a contingency plan in place, such as the one described above, in case the situation should arise.
This need not cause a problem, though. Indeed, the vast majority of prospective buyers will consider the flat to be far more attractive than another leasehold flat purely because they will get a share of the freehold and a 999-year lease at the end of the project, which they otherwise might not have had they bought another leasehold flat. So long as the Participation Agreement binds the residents to only sell to a buyer who contractually agrees to take their place in the collective enfranchisement process, it should cause no major headaches for those involved.
Click here to read more about Participation Agreements
The importance of the project manager
The project manager or organiser should ensure that they are put in direct contact with the buyer in order to ensure that they are privy to the same information and communication that the original resident was, and this should be done long before the sale of the flat is complete. Once the sale of the flat has gone through, there’s very little the project manager or organiser can do if the new resident claims to know nothing about or not be interested in collective enfranchisement. Having them sign the Participation Agreement or a contract engaging themselves in the process should they be the new owners of the flat will protect the whole process and ensure there are no hiccups along the way.
The need for specialist solicitor
To ensure the project isn’t derailed by the sale of a flat during the process, legal advice should be obtained and the services of a specialist solicitor with plenty of experience of enfranchisement should be sought. This will provide peace of mind to the other residents who are participating in the collective enfranchisement as well as ensuring that the terms of the Participation Agreement are kept to, with the new buyer actively engaging in the purchase of the freehold as the previous resident did. Having this added legal protection is something which can prove hugely valuable, particularly if the new resident opts not to play ball after all.
Once again, communication is the key and conveying accurate information to all residents — as well as potential new residents — is of the utmost importance. An experienced enfranchisement solicitor will be able to deal with the paperwork as well as ensuring that the correct legal advice is given to all the parties involved, making the chances of something going wrong much lower and protecting everybody involved with the collective enfranchisement effort. As always, careful planning and organisation can forestall many problems before they even crop up and ensure that the project is completed smoothly and without any unexpected and unforeseen issues which might arise.
Problems with selling your flat while enfranchisement takes place? We can help
Our team of enfranchisement and lease extension specialists work closely with our property dispute litigators – so if you’re having a problem with buying your freehold or extending your lease, and think that it might require a Tribunal application, don’t hesitate to get in touch. And don’t forget we offer FREE initial phone advice.
Collective enfranchisement involves a really difficult of law – so it’s so important that you get the right specialist advice. Wherever your block is situated in England and Wales, our expert team of lawyers can help. Enfranchisement and lease extensions is all they do.
For a FREE initial phone consultation from a genuine specialist in Enfranchisement
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