Why not just buy the Freehold ?
“Why buy a cow - if all you need is a glass of milk?”
Freehold purchase by enfranchisement is an extremely costly and cumbersome means of taking control of the management of your building. It can take up to a year – and sometimes a lot longer if contested at the Leasehold Valuation Tribunal or Lands Tribunal. You have to pay two sets of valuation fees; your own and your landlord’s. And the legislation provides that you must pay your landlord’s solicitors’ fees as well as your own.
With such large fees in prospect, it’s hardly surprising that specialist firms are keen to solicit blocks for Freehold Enfranchisement even though it’s not what they need or can afford.
“Ah!” - you may say: “But I need a lease extension.”
Well, the fact is that you can always get a 90-year top-up to your individual lease without ever involving the rest of the block. It’s a simple and easy process and the fair price is usually fixed by the Leasehold Valuation Tribunal.
Freehold purchase by enfranchisement is not just about extending all the leases in a block. You’ll wind up paying for a lot more than that. On top of the valuation and legal costs, you may have to pay for everything that has a residual value to the landlord, from loss of ground rent income, to development potential and the value of the porter’s flat, car parking and storage spaces.
Unfortunately, Freehold Enfranchisement schemes have a high rate of failure. Not necessarily because of legal technicalities, but by sheer length of time during which people move on and sell their flats, leaving the original group short on numbers and short on cash.
That’s a very high price to pay for management control; that refreshing glass of milk we can get you for a fraction of the cost and fuss… and usually in less than 6 months.