What is Enfranchisement?

• The government introduced enfranchisement legislation in 1993, allowing leaseholders to group together and buy the freehold of their property. This process is available if the building meets specific criteria, such as having at least two flats, the original lease lasting more than 21 years, and at least two-thirds of the flats being leased to qualifying tenants.

Steps to Buy the Freehold

• To buy the freehold, at least 50% of the flat owners in the building must participate. Before involving professionals, the leaseholders need to negotiate a formal participation agreement to define how decisions will be made and manage contributions towards the costs of the process.

Appointing Key Roles

• Leaseholders need to appoint a nominee purchaser (either one of the leaseholders or an external agency) to manage the building once the freehold is purchased. A fighting fund is also necessary to cover the costs of purchasing the freehold, which vary depending on factors such as the lease length, flat values, and ground rents.

Valuation Process

• To determine the freehold’s value, a chartered surveyor is appointed. They will advise on the amount to offer in the initial notice and guide negotiations with the landlord. The initial notice starts the process, and the landlord’s counter-notice will trigger further negotiations, potentially leading to an out-of-court settlement.

Legal and Financial Costs

• Ringley Chartered Surveyors, a company that offers a one-stop service for freehold purchases, charges around £2,810 for a block with 5-10 flats worth up to £500,000 each. Additional costs may include the freehold price and the landlord’s costs. The process may also include extra expenses if lease extensions are needed.

Tribunal and Dispute Resolution

• If a settlement can't be reached informally, the case can go to the Leasehold Valuation Tribunal (LVT). The tribunal can set a price for the freehold, and it has been known to set a price higher than the landlord’s offer. LVT proceedings typically take 2-6 months, and additional costs of around £2,000 may apply. The entire process can be completed within a year, even if the freeholder is unreachable or in receivership.