How do I buy the freehold of my leasehold flat?

If you own a leasehold flat, you and the other flat owners in your building may be able to buy the freehold of your homes under a process called Collective Enfranchisement.

What is Collective Enfranchisement?

Collective enfranchisement is the legal right of a group of flat owners to collectively purchase the freehold of their building, gaining control over their property and manage it themselves.

This right primarily governed by the Leasehold Reform Housing and Urban Development Act 1993, allows leaseholders to become the Buildings owners, eliminating ground rent and potentially lowering service charges and providing a say in repairs and management. It allows leaseholders to set fair service charge and manage the building’ finances.

Following completion of the acquisition the participating leaseholders can also extend their leases for nil premium to 999 years at a peppercorn (zero) ground rent

Am I eligible to participate?

To be eligible for collective enfranchisement the following applies-:

1. You must be a qualifying tenant which means a leaseholder of a flat within  qualifying building and hold a long lease (originally granted for at least 21 years
2. You must not own more than two flats in the building
3. The building must be self- contained, contain at least two flats and at least two thirds of the flats must be held by qualifying tenants
4. As of March 2025, up to 50% of the building can be used for commercial purposes
5. At least half of the qualifying leaseholders in the building must participate.

There are some exceptions to the qualification criteria and you would be unable to exercise your right to buy the freehold in the following circumstances-:

1. If there is a resident landlord and all of the following apply:

• The building is a conversion into four or fewer flats
• The building is not a purpose built block
• The same person has owned the freehold since before the conversion took place
• That person, or an adult member of their family has lived there for the past 12 months

2. If the building:

• Is within a cathedral precinct
• Is a National Trust property
• Is a Crown property
• Is a property including any operation railway

Can The Landlord Refuse To Sell?

If you use the legal process under the Leasehold Reform, Housing and Urban Development Act 1993, the landlord cannot refuse to sell you the freehold other than in certain circumstances, including if they intend to demolish and redevelop all or most of the building.

If you are eligible to collectively enfranchise but you cannot come to an agreement with your landlord on the purchase premium, you have the right to apply to the First-Tier Tribunal (Property Chamber) for an independent decision about what is a fair price.

However, if you do not use the formal legal process, the landlord is not compelled to sell and you cannot apply to the Tribunal for a decision on the purchase premium.

What is the process?

The below is a basic outline of the process-:

1. Checking Eligibility (of the building, the tenants etc)
2. Preparation of information
3. Choosing the Nominee Purchaser and setting up a Company
4. Instructing a specialist surveyor to carry out a valuation to determine the Purchase Price
5. You have an option for each participant to enter into a Participation Agreement (“the PA”) with the Nominee Purchaser company. The PA will confirm that the tenant will sign the initial notice and pay monies regarding their contribution towards the fees, costs and premium.
6. Serving the Initial Notice
7. Dealing with the Landlords Counter Notice
8. Making an application to the First Tier Tribunal if an agreement cannot be reached on the premium within 6 months
9. Agreeing the conveyance of ownership of the building from the freeholder to the nominee purchaser
10. Completion of the conveyance

To aid in this complex it is recommended leaseholders appoint professional advisors who specialise in this complex area of law.

How long will the process take?

It is important to be aware of the statutory deadlines once the initial notice is served-:

1. The Landlord has two months to serve their Counter Notice
2. Parties then have up to six months to either agree the premium or apply to the First Tier Tribunal to determine the premium payable.
3. Once the premium has been agreed the parties have a period of up to four months to agree and complete the conveyance

It is not unusual for the total collective enfranchisement process to take more than a year, particularly where the price to be paid must be determined by the tribunal – or there is a large number of participating flats. 

Using specialist valuers and solicitors experienced in the collective enfranchisement process will help make the process easier for you.

What Happens After Collective Enfranchisement?

Upon completion of the acquisition, you and the other flat owners will need to take care of issues such as:

• Granting new leases to the flat owners
• Setting service charges and other fees
• Choosing an agent to take over management of the building
• Making an agreement about how to resolve any disputes between flat owners
• Creating a sinking fund to cover the cost of the building’s maintenance, improvements, and essential work

The freehold will include-:

• The building containing the qualifying leaseholders flats
• Any premises and/or areas belonging to or usually enjoyed by flat owners such as garages, gardens or outhouses
• Property you are entitled to use under the terms of your lease such as communal gardens and driveways

For expert help and advice on your collective enfranchisement claim and the process involved please get in touch with one of our experts in our dedicated Leasehold Enfranchisement Team today.

(Please note the information above does not constitute legal advice and should you need advice please contact us on enquires@martintolhurst.co.uk or 01634 728 111).