Collective Enfranchisement

Pippaki

Hello,
I live in a block of 72 flats and we are planning in buying the freehold. Substantial increases in services charges, plans by the freeholder to remove our reception area and replace with two more flats, inadequate maintenance are just a few things that got us view this option.

I have been to the leasehold advisory service to read up on collective enfranchisement. I have contacted all resident leaseholders to see if they are interested and so far have approx. 50% of flatowners. However, I have problems contacting the non-resident leaseholders as the management company says they can't give this information because of the data protection act. They said they would contact them on my behalf if I just tell them what about.

Here my questions:
1) All flats, except the caretakers flats are owned by leaseholders, does it mean the freeholder owns this flat? Is this a reason not to be qualified for collective enfranchisement?
2) One leaseholder owns 3 flats. Is it legal for him to be part of this collective enfranchisement?
3) Is the next step getting a surveyor? Who will be paying for it? I am willing to put the money upfront but I want everyone to pay their share?
4) Can someone recommend a good solicitor that has experience with collective enfranchisement?
5) If only 50% agree to purchasing the freehold, what happens to the other 50%.
6) How long does it take?
7) What has been the most difficult part?

Thanks
Pippaki

Pippaki

Hello,
I was wondering if anyone will be able to help on this? Thanks Pippaki

Leasehold_Solutions

If you contract the right solicitors they will be able to fill you in with many of your questions, and tell you all about "participation agreements" which it is very prudent to have put in place. But in brief, the matter of the caretakers flats would not normally put off the purchase. If a leaseholder owns 3 flats all in the same name they would not count towards the 50% but still be able to take part, The cost of the survey would normally be split between a group of owners: the more owners, the less each pays.

If you are willing to spend the money yourself then this would speed up the process because trying to get people to fund a valuation without knowing the outcome is sometimes a bit tricky. But you are at risk of not getting your money back if the process never gets off the ground. You might want to consider ways of getting contributions from the potential participants.

If you do get only 50% participation, you will still have to fund the other 50% as you will be buying the whole freehold. If you do this, you will be the freeholder over the other 50% and they will have to come to you for a lease extension or to buy their share in the freehold company which they will not be legally entitled to.

Buying your freehold is a complicated process which can often take years. That is why some people choose to get professional project managers like us in. But there is nothing you can’t do yourself. Also, you will find that some of the participants will lose the desire to take part, others will be upset that you “did not ask them” and others will simply sell the flat.

You do need to make sure that you communicate well and assertively with the participants because they will be coming to you all hours of the day and night with questions! If you are planning to organise the process, that is really the most difficult part.

With the right surveyor and solicitors you will get a lot of support from them but be careful to keep a lid on costs. You may end up getting charged every time you contact them if you are not careful!

Andy
Leasehold Solutions Ltd