Collective Enfranchisement is when a group of leaseholders within a building group together to exercise their right to buy the freehold of the building from the council. In order to apply to buy the freehold, the following conditions must be met:
- At least two thirds of the flats in a building must be sold on long leases. This means at least 21 years long.
- The number of leaseholders applying to purchase the freehold must equal at least half of the number of properties in the building. For example, if there are 6 flats in the building at least 4 must be leasehold.
- At least 3 of those must join together to apply to buy the freehold.
- If there are only two properties in the building, then both must be leasehold.
Any leaseholder who does not wish to participate in the purchase would become a leaseholder of the new freeholder. The new freeholder would be required to grant a 999 year lease back to the Council for any tenanted properties in the building. This means the Council will become the leaseholder of the tenanted flats and the existing tenant would remain in the property. The tenants would retain their Right to Buy their home. If you are interested in purchasing the freehold of your building you should seek your own professional advice. You will also need to employ a valuer and a solicitor. You can also obtain more information from the Leasehold Advisory Service.
If you buy the freehold of the building you will have to pay the Council’s fees which are variable. You will also have to pay all outstanding service charges before completion of the sale.