Many leaseholders feel that they would like more control over the management of their property, leaving them with 2 options. Either they purchase the freehold – otherwise known as ‘collective’ or leasehold’ enfranchisement – or they can apply for the ‘right to manage’ the block in conjunction with other leaseholders.
This article will look at the various considerations involved when pursuing the collective enfranchisement avenue.
Freehold purchase – the advantages
Increase the value of your home: prospective buyers are likely to be more attracted to flats where they will own the freehold.
Extend your lease for free: if you choose to buy the freehold you will not need to pay a fee to extend your lease and can extend it up to 999 years.
You don’t pay ground rent: if you own the freehold, you will not need to pay ground rent.
You choose service providers: this means you can control the amount you pay in service charges whereas before you paid the service charges determined by the freeholder.
Avoid conditions: As a leaseholder you are bound by various conditions over repairs and pet ownership for example which can be frustrating having forked out on a home. This is not the case as a freeholder.
Freehold purchase – the disadvantages
So far so good, however some elements of freehold purchase are less attractive, for example:
It’s expensive: freehold purchase is not cheap however this is often made up for by the value that it can add to your home.
You need your neighbours help: It can be difficult – especially for those living in large blocks – to draw together a team of people who are willing to engage in collective enfranchisement and who will be organised and co-operative throughout the process. You may also struggle to find the freeholder.
It can be a slow process: leasehold enfranchisement usually takes about 12 months but if your freeholder is uncooperative it can take considerably longer, especially if you don’t instruct specialist solicitors.
The lease conditions remain: the conditions of your lease will not change simply because you have bought the freehold. It is therefore important to instruct an expert solicitor to update unfair or badly drawn-up leases.
You have responsibilities: as a freeholder you become responsible for starting the freehold company, keeping the accounts, maintaining the property and securing insurance. This is not for the faint-hearted and failure to do these tasks could damage the value of your home.
Disagreements may still occur: some neighbours are still likely to complain about service charges once the freehold company has been set up. These disputes may arise between you and other freeholders as well as those who were not party to the collective enfranchisement.
Thinking about freehold purchase – contact us for specialist advice
Buying your freehold involves a particularly complicated area of law – the rules are tricky and in particular, there are a number of strict deadlines you will need to keep to. That’s why it is so important to instruct expert lease enfranchisement solicitors to help you with your freehold purchase. Our leasehold reform experts have the knowledge and experience needed to help, so:
- For FREE initial phone advice, call us now on FREEPHONE 0800 1404544, or
- Send us an email using the enquiry form below.