Buying Your Freehold

Buying Your Freehold

The first stage is to establish whether you qualify and collate information on the property (specifically lease and copy titles). Once this is established you should enter into a participation agreement with the other leaseholders which will contain primarily your obligations towards payment of the premium and costs.

Also you should consider how you wish to hold the freehold on completion i.e in your joint names or set up a company. The main disadvantage with a company is that there are annual running costs for filing accounts and an annual return. However owning the freehold through a company makes matters easier in the event one of the leaseholders sells their flat in the future. It also means the obligations and liabilities of running the freehold will be vested in the company and not the leaseholders names individually i.e they will benefit from the concept of limited liability. Our best advice would be for you to set up a company although the choice is yours.

In order to be in a position to serve an Initial Notice (the formal notice starting the claim) you need to instruct a surveyor to calculate the premium payable to the freeholder.

Once the valuation has been received the Initial Notice can be finalised (inserting the lowest justifiable premium advised by your surveyor) and served on the freeholder. The freeholder will then have two months in which to respond with his/her Counter Notice. Once the Counter Notice is served by the freeholder (which will no doubt include the highest possible justifiable premium as a counter offer to the premium you have offered) there will be a period of up to 6 months thereafter for the parties surveyors to agree the premium and all other terms (such as the form of Transfer).

If terms cannot be agreed an application to the Leasehold Valuation Tribunal will have to be made requesting the Tribunal to determine the issues in dispute in any event by no later than 6 months from the date of the Counter Notice. If an application has not been made by this time and terms have not been agreed your application would be deemed withdrawn in which case you would not be apply for the freehold for a further 12 months and you would be liable to pay the landlord’s costs.

Once terms are agreed the freeholder title needs to be transferred to you or the company you have incorporated (depending on what you have decided). Following completion of the transfer your acquisition is registered at the Land Registry which finalises the procedure.

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