Collective Enfranchisement

Leases getting short? Do you want more control of your building? It’s worth collectively enfranchising.

‘Collective enfranchisement’ is the legal term used when the leaseholders of a block of flats or apartments group together to buy the freehold of their building. At John D Wood & Co. we have been advising on collective enfranchisement and acting in claims since the inception of the legislation.

Leasehold properties are a diminishing asset, but buying the freehold of your building (collectively enfranchising) provides long term security of tenure for the leaseholders and allows the owners to benefit from the full increase from any future rise in the values. However, the shorter your lease gets, the less valuable it becomes, and the more it will cost to buy the freehold. The difficulty of organizing and financing a collective claim means that few qualifying blocks actually taking this course of action, so flats whose lease do have a share of the freehold interest attract a premium price when selling.

80 years is a crucial point in your lease. Once a lease runs below 80 years, even by a single day, the leaseholder’s share of the freehold price can rise significantly.

The first Leasehold Reform legislation was passed in 1967, but the legislation concerning the collective enfranchisement of flats was introduced more recently. This says at least two-thirds of the leases within a building must have been granted for over 21 years at their start date, and only these leaseholders will be able to participate. If you wish to buy the freehold of your building, we can advise you how much the price may be and negotiate the price to be paid, should your building qualify. In order to proceed with a collective enfranchisement, at least 50% of the leaseholders in your building must form a company, which will be the ‘vehicle’ that purchases the freehold. Each participating leaseholder can then be granted a new 999 year lease with a peppercorn ground rent, held along with their share in the new freehold-owning company. Hence the term ‘share of freehold’.

Should your landlord be uncooperative, or agreement of the collective enfranchisement price cannot be reached, the matter may be referred to the First Tier Tribunal, where we will be able to represent you as an expert witness.


Interior Consultancy

Lease / Freeholds