The Leasehold Reform, Housing and Urban Development Act provides lessees of flats to get together to buy the freehold interest in the premises which contain the flats.
The provisions require the block of flats to consist of a self contained building, or self contained part of the building and the freehold of that building (or self contained part) must be owned by the same person. A building can be self contained even though it is apparently attached to another building.
Two or more flats in the block must be held by “qualifying tenants”. Qualifying tenants are those with long leases (more than 21 years) at a low rent. The premises must contain not less than two thirds of flats being held by qualifying tenants in order for collective enfranchisement. If the block has four or fewer flats and there is a resident landlord then the provisions do not apply. Not less than half of the qualifying tenants have to participate in purchasing the freehold for the claim to be valid.
Upon establishing the correct criteria for the property and the number of participating tenants it is usual for the tenants to form a company to purchase the freehold interest and sign a participation agreement between them. Once this is done the initial notice (Section 13 notice) is served on the freeholder and any intermediate landlords. The statutory time provisions that apply for a freehold claim are similar to those for a lease extension claim as detailed above.
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