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Leasehold Property Services from Comptons Solicitors

Collective Enfranchisement

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Collective Enfranchisement

The Lease Clinic has assisted hundreds of leaseholders in acquiring their freeholds. As with all of our services we are upfront and honest about our costs, ensuring you know exactly what you're signing up for.
All the information below and on how to instruct us should you wish to proceed are contained in our Freehold Purchase Information Pack. Please contact us for a copy.

If your building qualifies and there are sufficient numbers of you (generally speaking 50% or more) then acquiring the freehold is the best way to achieve a clean break from your landlord. Once you have the freehold title you can grant, renew and amend your leases to your hearts content and manage the building how you want. It is the ultimate tonic for your lease.

For more information on fees and procedure:

The fees below are “per lessee” fixed fees and include the setting up of a company, drafting a participation agreement, drafting and serving an Initial Notice, making an application to the Leasehold Valuation Tribunal (but not the hearing itself), completing the transaction and registering it at the Land Registry

  • £1500 plus VAT for 2 to 9 flats
  • £1000 plus VAT for 10 to 19 flats
  • £850 plus VAT for 20 to 29 flats


In addition the following disbursements (items we pay out on your behalf payable no matter which firm you instruct which are shared between the participators) are payable:

  • £40 Land Registry fees*
  • £20 Companies House fees
  • £40 to register a unilateral notice to protect your Notice against the freehold title
  • £8 per flat for Official Copy Entries
  • £10 plus VAT Bank Fee for instant telegraphic transfer to ensure the funds are received by your landlord
  • Stamp Duty Land Tax if Premium contribution is above £125,000 (see below)


*if the premium you pay the Landlord is above £80,000 then the Land Registry fees will increase by the following:

£80,001 – £100,000£80
£100,001 – £200,000£190
£200,001 – £500,000£270
£500,001 – £1,000,000£540
£1,000,001 and over£910

Stamp Duty Land Tax (SDLT)

If a flat’s contribution is above £125,000 then you will have to pay SDLT to HMRC. This is payable at the following rates:

Up to £125,000Zero
The next £125,000 (£125,001 – £250,000)2%
The next £675,000 (£250,001 – £925,000)5%
The next £575,000 (£925,001 to £1.5 million)10%
The remaining amount (portion above £1.5 million)12%


An SDLT return is required for a contribution over £40,000 although no tax is payable up to £125,000.


If you own more than one property your flat’s contribution may be subject to the higher rate of SDLT. This is payable at the following rates:

Up to £125,0003%
The next £125,000 (£125,001 – £250,000)5%
The next £675,000 (£250,001 – £925,000)8%
The next £575,000 (£925,001 to £1.5 million)13%
The remaining amount (portion above £1.5 million)15%

 

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 First Tier Property 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.

Interested in acquiring your Freehold? Contact us to find out how we can help.

Who to speak to at Comptons

James Compton
Partner, Head of Enfranchisement
+44 (0)20 7482 9513
jc@comptons.co.uk

Sarah Jennings
Associate Partner
+44 (0)20 3869 4464
sarahj@comptons.co.uk

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