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Freehold Purchase (Collective Enfranchisement)

The 1993 Leasehold Reform Housing and Urban Development Act gives owners of flats the legal right collectively to buy the freehold.

This is known as Freehold Purchase or Collective Enfranchisement.

The main qualifying criteria are:

  • The building must have at least 2 flats in it.
  • The original lease must be for more than 21 years.
  • At least two-thirds of the flats are let to qualifying leaseholders. Nor more than 25% of floor space is used for non-residential purposes.
  • To qualify for freehold purchase at least half the leaseholders in the building must participate
  • Once the freehold transaction has been completed lessees effectively have full ownership and control of the building with the right to grant themselves 999 years leases.
Freehold Purchase or Collective Enfranchisement is a complex process that requires professional and expert assistance. Each Side Leasehold can provide valuations for freehold purchase of both flats and houses which are let on similar long leases.
The cost of the freehold comprises:

  • The valuation of the freehold interest

    This is the compensation payable to the freeholder for the loss of ground rent and the value of the flat when the lease term ends ie Reversionary Value.

  • Marriage Value

    This is payable to the freeholder as a result of the increase in value as a result of the freehold purchase and the ‘marrying’ or merging of the freehold and leasehold interests. Marriage Value is only payable if the lease has less than 80 years unexpired.

    Marriage Value is not payable for non-participants in the freehold acquisition, only the cost of the freehold interest. If a leaseholder does not join in then the participants must divide the cost amongst themselves.

  • Compensation

    This is for any other loss arising from the freehold purchase.This will include probable hope value for additional flats or extensions.

We will guide you through this complex process and help obtain the correct premium or price.

For free initial telephone advice on lease extension please call us free on 0800 902 0466 or email info@eslease.com.
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