Freehold purchase timetable for Leaseholders

The following information gives a practical step by step snapshot of events in purchasing the freehold. This applies largely to adverse purchase, but also provides some advice for purchase should your freehold come up for sale. You are reading this - its aimed at you!

You decide to take a lead in purchasing the freehold - its come up for sale or you are unhappy with your landlord/freeholder or the lease years are getting a bit too close to 80!

You need to speak to your fellow leaseholders, write them a letter explaining why now is a good time to purchase, use one of our samples. To get lists of who you are writing to, speak to the tenants or leaseholders committee, make sure you speak to them 1st, you may be on the committee?

Next step is calling a meeting, if you are not happy speaking to a group, try to get a fellow leaseholder involved who is. You might have to do the donkeywork, but you need someone who can manage a meeting. the local pub is a good place to find a meeting room.

You will need to find out who are residents and who sublets. People with buy to let investments are a good bet. Also, and most important, you need to get 50% or more in agreement.

It might be that purchase of the freehold has been discussed before, it was almost certainly dropped due to the problems of funding the purchase - our funding option should get them interested again!

You will most likely need another meeting, have a look at our practical example - it really worked like this. Your target is to get as many leaseholders as possible on board and showing their real support by contributing to the fighting fund, we recommend £200 as an initial contribution. Keep speaking to people, write up the meetings and circulate those notes.

As soon as you have 50% serious investors you need to engage a lawyer and a surveyor who are expert in leasehold law, they might effectively come together or recommend each other - don't use a friend of a friend. Try to get a choice of reasonably local specialist lawyers (solicitors) and propose them to the leaseholders involved in the purchase, do your best to remain independent.

At this stage you should have a significant pot of money ready to pay the first set of fees and which acts as a commitment for all involved - hopefully 100% (what about those who do not get involved).

Now we bring in the professionals

The lawyer should be willing to come and talk to the leaseholders and explain how the purchase of the freehold works.

The surveyor will need to have access to the flats or a sample of flats should the block be relatively new and purpose built. he will produce a survey which of course will include a valuation, he should include some comments about prices in the context of negotiation and LVT.

At about this stage you should be able to present to your fellow leaseholders a view as to the likely costs. If you are using the Freehold Purchase Finance Package you will be able to say not just what the lump sum is likely to be but the cost in relation to the current ground rent - i.e. what they will pay. This lump sum will potentially include the fees and charges that appear at the end of the process, most of which can be included within the FPFP

The Lawyer will need participating leaseholders to provide various items of information including copies of their lease, title deeds etc.

What else needs to be done - The company that will purchase the freehold will need forming, that could be left to the Leasehold lawyer to manage. The participating leaseholders will also need to sign a .....

Now the process is largely in the hands of the professionals - you've done your bit, at least the major part though you will still need to make sure the leaseholders are kept informed throughout the process. There might be additional funds to contribute and at some point the participating leaseholders will need to sign up as company owners and possibly directors.

The process of purchase will most likely start with a 'Without prejudice' letter to the freeholder offering them an amount based on the surveyors report. your lawyer will be able to advise based on the surveyors report. This process is quck and might well result in a successful purchase.

Failing that, the freeholder will have to be summonsed - we are undertaking a legal process

Work in progress - more to follow

Funding the purchase of the freehold

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