Solicitors Specialising in Freehold Purchase For Clients Nationwide
Statutory Freehold enfranchisement – the legal process where 50% or more of the leaseholders in a block of flats get together to buy their block’s freehold from the landlord – often seems like an interminable process with a never-ending list of forms to complete and regulations to adhere to.
It’s certainly true that the rules and paperwork can be daunting, but there is a strict regulatory framework with deadlines governing the whole process. These deadlines are designed to allow leaseholders to get the process completed within a reasonable period of time, while still allowing the freeholder time to manage their side of the process.
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Freehold Enfranchisement – the difference between the informal and statutory process.
Just like extending your lease, when you come to buy the freehold of your block with some of your fellow leaseholders, you have two options.
1. An informal or voluntary enfranchisement
2. The formal or statutory enfranchisement process
There are a number of differences between the two. In short,
• provided you get the process right and your block is eligible for enfranchisement, then buying the freehold is your legal right. In general terms the freeholder simply cannot stop you.
• in contrast there is no formality to the voluntary route. no timetable, and no set procedure. You simply negotiate and agree terms with your freeholder. And the main disadvantage is that in using this process, you have absolutely no way of forcing your freeholder to complete the sale. Your freeholder is completely free to drop out at any stage, which is why we would strongly advise against any informal enfranchisement.
• one disadvantage of the formal route is that it does mean you need to strictly comply with the rigid the timetable and complicated procedure. Making a simple mistake can mean your application fails and have to start from the beginning again which can cause considerable delay and significantly increase costs. remember with the formal route you will have to pay not only your own legal and valuation costs but also the reasonable and legal valuation costs of your freeholder.
That’s why it’s so important getting a specialist solicitor with plenty of relevant experience to handle your statutory enfranchisement claim.
NB there are also strict guidelines when you use the formal statutory process to buy the freehold of a leasehold house
Enfranchisement – the Need for Specialist Solicitors
As you will see below, implications of missing a deadline when it comes to formal enfranchisement can prove very expensive indeed. That’s right really important that you get a solicitor who really understands freehold purchase. Few property solicitors regularly deal with lease extensions – and far fewer ever come across enfranchisement.
However if you instructed leasehold team here at Bonallack and Bishop you can rest assured that you have experts with plenty of relevant experience covering your back. We will make sure that you meet all of the deadlines and that the correct paperwork is served in the right way, at the right time.
And to prove it, we are the only solicitors nationwide recommended by the HomeOwners Alliance (the leading organisation representing Britain’s 17 million homeowners) for legal advice on any aspect of lease extension, right to manage or freehold purchase.
What starts the statutory enfranchisement process?
The 1st stage is the issue of what is known as the enfranchisement notice. Getting this right is essential. Getting wrong is likely to mean you will need to abandon the application and start again from scratch – wasting time and legal costs.
Click here to read more about the enfranchisement notice
Statutory Freehold Enfranchisement – Deadlines Affect Everyone
The legal deadlines apply to both sides in the collective enfranchisement. If the leaseholders miss a deadline when going through the freehold purchase process then the whole process will be declared abandoned by default, or the freeholder can ask the County Court to declare the process invalid.
If the freeholder is the one who misses the deadline then it is possible that the collective enfranchisement can be forced through at the original offer price, which gives the landlord no opportunity to negotiate or make a counter offer. given that most original offer prices tend to be on the lower side – to encourage negotiation, if the freeholder misses the deadline it can prove very expensive indeed.
What Happens When the Parties Can’t Agree on a Price
If the freeholder does respond to the initial Enfranchisement Notice and starts to negotiate on price, but then the negotiations over the freehold price reaches stalemate, then the case can then be referred to an official body called the First-Tier Tribunal Property Chamber ( which was previously called the LVT or Leasehold Valuation Tribunal). This option is only open during a strict four month period which starts two months from the date the Counter Notice is issued, and ends six months after it is issued. Outside of this period the case cannot be referred to the Tribunal and the whole freehold purchase may fail.
Statutory Freehold Enfranchisement – failure to serve a counter notice
After the Enfranchisement Notice is served, the freeholder has a period of two months to come back with a Counter Notice. If this doesn’t happen, then they are deemed to have accepted the initial offer. If this happens, the leaseholders who are asking for collective enfranchisement can go ahead and legally purchase their freehold at whatever price they first offered. It is for this reason that freeholders have to stick to the deadlines and get their responses submitted in time – they face financial losses if they don’t.
The deadlines are there to ensure that the freehold purchase goes through as smoothly as possible, and to provide protection for both side. They also give people time to complete the tasks which need to be completed. All of these deadlines should be made clear by the start and you should make sure to stick to them if you don’t want to run the risk of ending up in the County Court to hear your freehold enfranchisement has been declared abandoned.
Looking at Statutory Freehold Enfranchisement ? Call Our Specialists
Exercising your Right to Enfranchise involves a really difficult of law – so it’s critical that you get the right expert advice. Wherever your block is situated in England Wales, our specialist team can help.
For a FREE initial phone consultation from a specialist Freehold Enfranchisement Solicitor
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