Collective Enfranchisement – the Pros:
Generally, buying the freehold [also known or leasehold or collective enfranchisement] of a residential building collectively delivers the best result for tenants – because it results in full ownership and control of the building. Tenants who acquire the freehold can grant 999 year leases and also take over the management of the building. Although tenants now have a statutory right to take over the management of the building they tend to prefer a collective claim because, as stated above, it also gives them the right to grant long leases to themselves at no extra premium, significantly enhancing the value of their flat.
Collective Enfranchisement – the Cons:
Tenants should be aware that taking over the management of a large block can be onerous. Even though day-to-day management matters can be contracted out to managing agents, as freeholders, the tenants are responsible for insurance, repairs, redecoration and such issues. Pursuing neighbours for arrears of service charges or ground rent, or dealing with complaints about unauthorised alterations or noise nuisance is not an easy task. The cost of buying the freehold involved in lease enfranchisement could also be high if there are a number of short leases and few participating tenants.
The collective claim
The freehold purchase of a building as a group of tenants is a complex project that requires much organisation and should not be entered into lightly. It is important to form a coherent group headed Up by a few enthusiastic residents who can build consensus amongst the participants, and sustain momentum over a long period of time. Once this group has been formed, it is strongly advisable to instruct a solicitor to implement the technical procedure required and an enfranchisement surveyor to advise on the likely freehold value. These professionals will wish to deal only with the residents appointed representatives, who can maintain a line of communication with their fellow residents.
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