Do you want to buy freehold of your block? Here are answers to the most common questions
The purchase of freehold interest in a block of flats from an owner is generally known as a freehold purchase or collective grant. The process will involve a group of tenants collectively acquiring freehold ownership of the building.
The article will address questions that often arise around the freehold buying process.
When we have freehold, can we arrange to extend the lease and stop paying rent on the land?
Yes. Longer leases can be granted, but there are good reasons beyond the scope of this guide why land rent should not be initially waived, especially on blocks of more than a few apartments.
What if we haven’t heard from our landlord in many years?
There are a number of reasons this can happen, whether your landlord/landlord is missing or dead, or the wholly owned company has been removed or dissolved. Provisions have been made in the Tenancy Reform (Housing and Urban Development) Act 1993 to deal with the problem of landlord absenteeism through a Vesting Order through the County Court, which also has the power to grant a waiver of the notice requirement.
Whether it is an individual tenant seeking an individual lease extension or a group of tenants seeking to purchase freehold or claim the right to manage, you must present evidence demonstrating reasonable efforts to trace the absentee freeholder in order for a warrant to be granted. acquisition. Admissible evidence includes copies of the freehold office (proof of freehold ownership) showing your last known address to show that you no longer own that property and have moved to an unknown address, or statements confirming that a visit to the last known address of the beneficial owner has not provided the lessee with a forwarding address.
Will all the flats be freehold once we buy the freehold of the building?
No. Technically the flats will still be leased, however you will be the one in charge of granting a lease extension and any issues with the lease that you can resolve.
Tenants can also take over the management of their block without having to prove fault and without having to pay compensation to the existing landlord or managers. However, to qualify for the right to administer [or RTM] there must be "qualified supporters" of at least two thirds of the dwellings in the block (the two dwellings if there are only two) and at least half of the qualifiers must join the special company RTM that must be established for the exercise of the right.
Should we buy freehold in the name of a company or in our own name?
It is a sensible idea to buy freehold through a purpose built company. Once registered, freehold deeds never need to be changed again. Also, if you take freehold in your personal name, each time a flat is sold, freehold must be transferred to include the names of the new owners of the flat, which would involve getting the signatures of all the tenants (some of the who may not live on your floors and may be difficult to contact). It is also much easier to grant a longer lease if the freehold is held by a company rather than an individual.
Regardless of which way the group wishes to move forward, if the negotiations are open and honest, any group of Tenants should be able to achieve the end result of owning freehold and therefore easily grant a large portion of the Lease Extensions. . Make sure you get the right standard of advice from lawyers who specialize in this area of the law and who will be able to guide you through the entire process.