Buying the Freehold of Flats

If you own a flat you can buy the freehold of your building with the other leaseholders. You can either do this by informal negotiation with the freeholder, potentially saving you time and money; or if you meet certain criteria, you could take a formal legal route in a process called collective enfranchisement, which would offer you more protection.  

It is worth starting the process informally and switching to the formal one if negotiations fail. 

Informal route 

Under this route, you and other leaseholders ask the freeholder whether they are interested in selling the freehold. There is no obligation on the freeholder to respond or to agree to sell.  

If the freeholder agrees then you can negotiate.  

But if you cannot agree on price and terms, and you meet the criteria, you can still use the formal route to try to buy the freehold. 

Formal route 

If you and your building meet certain criteria, you have a legal right to join up with your fellow leaseholders and buy the freehold of the building.  

The laws and exceptions that are relevant to you will depend on your circumstances, but generally to qualify: 

• you must not own more than two flats in the building 
• you must have a ‘long lease’ – that is, one that was originally at least 21 years when first granted 
• your building must have at least two flats, and at least two-thirds of the flats must be owned by qualifying leaseholders 
• at least half of the flats must be owned by participating qualifying leaseholders 

Under this route, you, the other leaseholders and the freeholder need to follow a procedure and timescales set out by law. It can be complicated, and we recommend you appoint a valuer and a solicitor to help you. 

In brief, you serve your freeholder with a formal notice, including your terms and price, and they have 2 months to reply in a ‘counter-notice’. They may:  

• agree to your right to buy the freehold and your terms 
• agree to your right to buy but with different terms – which will give you 2 more months to come to an agreement, and then 4 further months in which either of you may also apply to the tribunal to rule on the terms 
• not agree that you have a right to buy – which will mean you will have to apply to the county court for a decision 
• not reply to your notice – which means you have to apply to the county court for a decision 

Get help 

Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

Template letter for the informal route 

• Letter asking to buy the freehold from the landlord 

More information you might find useful:

• Collective Enfranchisement – Getting Started
• More Frequently Asked Questions on Buying the Freehold of Flats 

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

There are several ways to find out who your freeholder is: 

• if you bought a new–build property, you can find the name of your freeholder on your lease. 
• if you receive ground rent demands, the name and address of the freeholder should be on the demand. 
• if the freeholder manages the property, their name and address should be on each service charge demand. 
• you can use the HM Land Registry website to search for your freeholder via the freehold title register and get a copy of it too.

More information you might find useful:

• How can we buy the freehold of our building?
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

To be a qualifying leaseholder under the law requires a long lease, which is generally:

• a lease for a fixed term in excess of 21 years when first issued (granted);
• the continuation of a long lease under the Local Government Housing Act 1989 following the expiry of the original term;
• a shared ownership lease where the leaseholder’s share is 100%.

Where there are other types of leases specialist advice should be taken.

But, even if the leaseholder satisfies the above criteria, he or she will not be a qualifying leaseholder if any of the following cases apply:

• the landlord is a charitable housing trust and the flat is provided as part of the charity’s functions;
• the leaseholder owns more than two flats in the building;
• the leaseholder has a business or commercial lease.

The building

• there must be a minimum of two flats in the building;
• at least two-thirds of the flats must be leasehold;
• no more than 25% of the internal floor area to be in non-residential use.

There is no right to buy the freehold (but there is  a right to renew the lease) where:

• the building is a conversion into four or fewer flats and not a purpose-built block and the same person has owned the freehold since before the conversion of the building into flats and he or an adult member of his family has lived there for the past 12 months.
• the freehold includes any track of an operational railway, including a bridge or tunnel or a retaining wall to a railway track.

Some properties may be completely excluded from the rights of collective enfranchisement:

• buildings within a cathedral precinct;
• National Trust properties;
• Crown properties

Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

More information you might find useful:

• Collective Enfranchisement – Getting Started
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

If you are proceeding under the Leasehold Reform, Housing and Urban Development Act 1993 you will be responsible for your landlord’s reasonable costs. This is limited to legal and valuation costs e.g. the landlord’s valuation, legal costs of transferring the freehold and checking your right to buy the freehold.

You do not have to pay the landlord’s costs in connection with First-tier Tribunal (Property Chamber) proceedings.

If you are privately negotiating to buy the freehold outside the 1993 Act there are no rules regarding costs. It is a matter of agreement between the parties.

Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

More information you might find useful:

• Collective Enfranchisement – Getting Started
• Application to the First-tier Tribunal (Property Chamber)
• Application Form – Application for Determination of Reasonable Costs – Flats and Premises
• I am in dispute with my landlord but I do not want to go to Court or Tribunal. Is there an alternative?
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

As a leaseholder, if  you do not wish to do so, you do not have to participate in buying the freehold.

If you do not take part you will remain a leaseholder and the terms of your lease will stay the same.

The only major change will be that your neighbours that participate in the process, will take over the management and make decisions in relation to maintenance.

If you want to join in the purchase or buy a share of the freehold at a later date this will be at the discretion of the leaseholders who now own the freehold. You will no longer have the right to insist that the existing owners sell you a share. All you can do is negotiate to purchase a share. Therefore is important to consider at the outset whether you wish to participate in the purchase.

More information you might find useful:

• Collective Enfranchisement – Getting Started
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

This division of the premium and the costs when leaseholders purchase the freehold is not stated in the law. The leaseholders who want to buy the freehold have to agree this between themselves.

It is important to agree on this point before starting the process. You may wish to enter into a Participation Agreement to make sure all the participating leaseholders provide funds in the agreed proportions. To see an example of a Participation Agreement you can click here.

Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

More information you might find useful:

• Participation Agreements
• Collective Enfranchisement – Getting Started
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

Yes, there is potential investment value for third parties who are willing to fund the cost of enfranchising non-participating flats. These are often called “White Knights”. The non-participant element of the premium can often be considerable, but these individuals and companies would offer “white knight” funding in exchange for shares in the freehold company. Any additional funding should be investigated before serving the claim notice and any written contracts for third party funding should be analysed carefully. We would advise that you seek legal advice before entering into any agreement.

For leaseholders who are constrained by a budget, this option can prove invaluable and enable a collective claim to proceed where it might otherwise fail for lack of funds.

Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.

More information you might find useful:

• Collective Enfranchisement – Getting Started
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers

You will need to agree with each other how you want to hold the freehold. The options available are;

• to form a company. The Articles of Association of the company would govern how the company is run.
• to hold the freehold in individual names on trust for each other. Only 4 trustees can be registered at any one time at the Land Registry and so the registered trustees would hold the freehold on trust for the other co-freeholders. It is advisable to draw up a trust document to govern your ownership of the freehold.

You should take specialist advice on the best option for your particular circumstances.

More information you might find useful:

• Participation Agreements
• Companies House (external link)
• More Frequently Asked Questions on Buying the Freehold of Flats

Still not found the answer?

Contact LEASE to have your enquiry dealt with by one of our experienced advisers