The document outlines the process and legislation surrounding collective freehold purchases and lease extensions for leaseholders in England and Wales. It details eligibility criteria, the main stages of enfranchisement, and the necessary steps for leasehold reform under various acts, including the Leasehold Reform Act of 1967 and the Commonhold and Leasehold Reform Act of 2002. Additionally, it provides contact information for Yashmin Mistry, a specialist in leasehold law.

1. Collective Freehold Purchases
and
Lease Extensions

2. Partner at JPC Law
Specialist in Leasehold Law
NOTB Awards – “Solicitor of the Year”

3. BUYING THE FREEHOLD
Collectively

4. Collective
Enfranchisement
• Legislation is in place
– right to compel landlord to sell freehold at a fair price
– Leasehold Reform Act 1967 – leaseholders of houses in England and Wales
– Leasehold Reform Housing and Urban Development Act 1993 – leaseholders of flats in England
and Wales
– Commonhold and Leasehold Reform Act 2002 – expanded the right
• Legislation is complex

5. Qualifying to
Enfranchise
Not every building qualifies
Even if building qualifies – not every tenant may qualify
Important: ensure from the start the building and all potential
tenants are eligible to claim

6. Building Qualification
• Self contained separate structure
• Two or more flats
• At least 2 thirds of all flats in building are held by qualifying tenants – leases over 21 years when first granted
• Not more than 25% of building floor space is commercial
• 50% of the flats in the building are participating
• Landlord is not a charitable housing trust, local authority or Crown
• Has not been converted into 4 or fewer flats with the same person having owned the freehold since before conversion with a resident landlord

7. 7 Main Stages:
1. Preparatory Stage
2. Notice of Claim
3. Landlord’s Counternotice
4. Application to the First Tier Tribunal
5. Hearing and Decision
6. Completion
7. Post Completion Leases

8. 1. Preparatory
• Ensure the building qualifies
• Ensure tenants qualify
• Sufficient numbers on board
• Understand what purchasing the freehold will mean
• Participation Agreement
• Nominee Purchaser
• Valuation

9. 2. Notice of Claim
• Formal process begins
• Clock starts to tick - strict deadline / timetable to follow
• Landlord has the right to:
– Request title documentation
– Access for valuation purposes

10. 3. Counter Notice
• Admit or deny the right
• Counter offer to items not accepted in claim notice
• Negotiation
• Agree terms of acquisition

11. 4. First Tier Tribunal
• Any party may apply
• Between 2 - 6 months after counternotice is served
• Usually do not proceed to full hearing

12. 5. Hearing & Decision
• Unusual to go all the way to a full hearing
• Each party responsible for their own costs of Tribunal proceedings

13. 6. Completion
• Pay the money!
• Landlord’s “reasonable” costs

14. 7. Post-Completion Leases
• 999 years
• Ground rent – usually reduced to “peppercorn”
• Modernise existing leases
• Opportunity to rectify any defects in existing leases

15. Non-Participating Flats
• Whole of the freehold that will need to be purchased
• Internal investors
• External investors
• Overriding Lease

16. Extending Your Lease

17. 2 Ways To Extend
1. Voluntary
2. Statutory – formal route

18. Legislation
• Leasehold Reform Housing and Urban Development Act 1993
• Right to extend flat lease
• 90 years at a fair price

19. Qualification
• Not a business or commercial property
• Landlord is not a charitable housing trust, National Trust or Crown
• Long lease – originally granted for more than 21 years
• Registered at Land Registry as owner for more than 2 years

20. Valuation
• Specialist valuation
• Not an estate agents valuation
• Ballpark figure – lease extension calculator on website:
http://www.jpclaw.co.uk/areas-of-law/leasehold- enfranchisement/lease-extension-calculator/

21. Notice of Claim
• “Section 42 Notice”
• Formal process begins
• Served on the landlord and all third parties to the lease
• Propose a price
• Propose apportionment between landlords
• Landlord entitled to request:
– Deposit – 10% or £250
– Title documents
– Access for valuation purposes

22. Counternotice
1. Admit or deny the claim
2. State counter-proposals

23. First Tier Tribunal
• Any party may apply
• Between month 2 and 6 after counternotice is served
• Unusual to go all the way to full hearing
• Each party responsible for own costs of Tribunal proceedings

24. Lease Extension &
Collective
Lease Extension will be “frozen” or “stayed”

25. Any Questions?
Thank You For Listening

26. Contact Information
YASHMIN MISTRY
• Tel: +44 (0)207 644 7294
• Email: ymistry@jpclaw.co.uk
• Twitter: @yashminmistry
• LinkedIn: http://www.linkedin.com/pub/yashmin-
mistry/15/85a/b09