Buying the Freehold of your Flat

Estate Agents very often market the sale of a leasehold flat by including within the description "share of freehold".  This is something of a misnomer because the current flat owner will not actually have a share of the freehold but rather be a joint owner of it or participate in the management of the freehold through a tenant owned company.

Leaving semantics aside, the fact that flats are sold on this basis illustrates that for many people, holding the freehold interest is considered to be as important as having a long lease of the flat itself.  For that reason the acquisition of the freehold continues to be a very desirable objective for many flat owners.  This very often goes beyond the entitlement to exercise a right to manage and which in many cases is simply viewed as a stepping stone towards the ultimate goal of taking the freehold into the ownership of the flat owners.

Sometimes it is possible to negotiate with the Landlord to transfer the freehold (usually at a price) but failing that there is a statutory entitlement which can be exercised under which reluctant Landlords can be required to sell their freehold interest, usually at a price determined by a Tribunal appointed for the purpose.

Either route can be fraught with difficulties and in particular recent cases have shown that claims by the flat owners have continued to result in proceedings being brought to the Courts and Tribunals.  The legislation is precise in its requirements but unfortunately, less so in how those requirements are interpreted.  Even now, arguments rage as to whether particular buildings containing flats with long leases qualify under the legislation.  It might be thought that deciding whether a property was a house, a flat, or a block of flats might be simple enough task of applying common sense but recent cases have shown that deciding what each of these terms means continues to generate dispute, particulary where Landlords are anxious to avoid the statutory rights of tenants being exercised.

If this were not enough, there have also been arguments as to whether the common parts of a building should be included (usually the entrances, hallways and stairs etc) since Landlords have sought to defeat claims by insisting these should remain in their ownership.

It will be seen from all of this that acquiring the freehold interest is not a straightforward matter.  If there is added into the mix the sometimes diverse views and requirements of the other flat owners in the building who may want to approach matters differently then there is scope for all sorts of problems to arise so that ultimately the temptation is to simply give up the exercise.

It is here that incisive knowledge of the legislation, the procedures that apply and the proper organisation of all of the participants at the outset can pay dividends many times over throughout the process, not only in saving wasted costs and expenses but also ensuring a successful outcome.

Pengillys have considerable experience and expertise in dealing with these arrangements and offer a preliminary discussion on a no obligation basis.  If you are thinking of embarking on acquiring a share of your freehold contact Rachel Turner or Matt Rimmer who will be delighted to speak to you about the process and potential pitfalls in greater detail and how to ensure you have a successful outcome.