COLLECTIVE ENFRANCHISEMENT FOR LEASEHOLD PROPERTY: PURCHASING THE FREEHOLD OR EXTENDING YOUR LEASE
You may have seen the rising number of “horror stories” in the news lately concerning those individuals, couples and families who purchase their own home only to subsequently discover that the real cost of owning their house outright greatly exceeds their expectations and has become unaffordable. Such stories, one of which can be accessed here, involve those houses bought and sold as leaseholds – meaning the buyer owns the property for a term agreed with the freehold owner – as opposed to owning the freehold where the buyer owns the property absolutely.
Despite the recent publicity associated with leasehold houses and the extra costs involved in attempting to purchase the freehold, there are statutory provisions in place which enable qualifying home owners to purchase the freehold of their house after two years, a process known as enfranchisement. Under this statutory procedure leaseholders must pay their landlord’s legal costs, however such costs along with the cost of purchasing the freehold itself, must be reasonable, meaning home owners will not be left blindsided by the fees involved should they want to purchase the freehold and own the property outright. Even if the parties fail to agree on a price, then the leaseholder may apply to the First Tier Tribunal (Property Chamber) who can determine the price based on set calculations.
Bury & Walkers urges all buyers of leasehold houses to take care and ensure that appropriate legal advice is sought not only prior to purchase but also at any point when you are considering whether you can purchase the freehold or reviewing the term of your lease. As such, Bury & Walkers employs a specialist team who understand the sometimes complicated nature of leasehold property and the processes involved in purchasing or dealing with leasehold property and can suggest alternative options for those who are unable to purchase the freehold, such as negotiating a lease extension with the freehold owner on your behalf.
If you do own a lease of a flat and not a house and are looking to purchase the freehold then similarly Bury & Walkers can represent you in the process or help you to obtain an extension to your lease.
To find out if you qualify for enfranchisement or for further information on the statutory process involved as well as for an informal discussion about your particular circumstances in more detail then please contact Bury & Walkers by telephone on 0113 244 4227 or email at email@example.com.