Buy My Freehold by Heather Hilder on March 31, 2020 “Can I Buy My Freehold?” ‘When selling a client’s leasehold property, we obtain a copy of the lease to ascertain how many years remain. Occasionally, we advise a leaseholder to extend the lease. This will sometimes lead to the question ‘Can I buy my Freehold?’ Statutory Right Most lessees (NB not tenants) have the statutory right to purchase the Freehold of their building. This is called Collective Enfranchisement, under the Commonhold and Leasehold Reform Act 2002. Such a purchase certainly has its appeal if your lease is beginning to look a little light – say 80 years or less. In this instance it may be worth considering buying the Freehold now. Costs The cost of doing so in the future will escalate exponentially as the years go by under a process called reversion. As a result, there is likely to be an associated depreciation in the market value of your remaining lease. One important condition of such a purchase is that at least half of the lessees in a building participate in the purchase. A lessee who does not wish to take part is deemed to have forfeited the right to do so in the future. Lessees’ Meeting Start by calling a lessees’ meeting. Appoint a solicitor to draw up a participation agreement and a specialist surveyor to prepare a valuation. A formal notice requiring the Freeholder to sell will then be served. The notice must be accepted by the Freeholder within two months or the tenants can force the sale through the County Court under a Vesting Order. Specialist Advice The issue of valuation can be extremely complex and requires specialist advice. The valuation depends on numerous variables and precedents with over twenty valuation models in use! The Freeholder may of course disagree with the valuation. In this case the matter can be referred to the Leasehold Valuation Tribunal for a decision, although this can be costly for both sides. Trust or Limited Company Your Solicitor is likely to advise purchasing the Freehold through a trust or limited company. As a result, in future sales, the seller transfers the shares in the company owning the freehold to the buyer. Contact us on 01273-735237 or enquiries@callaways.co.uk . We will give our considered opinion as to whether your lease might be worth extending and the values involved.
