The leaseholders as a group may be able to force the freeholder to sell their interest in the building to the leaseholders under the leasehold Reform Housing and Urban Development Act 1993.
Buying the freehold offers the leaseholders a number of advantages:
The price payable for the freehold depends on a number of factors, including the market value of the individual flats and the length of the leases.
The price payable for the freehold will be higher if the leases have less than 80 years to run, substantially higher if the leases have significantly less than 80 years to run.
Leaseholders should approach a valuer with expertise in this field to provide advice on a price before the Initial Notice is served. This is because, by law, the price in the Initial Notice must be “realistic”, so valuation advice is needed at the outset.
A valuer is also likely to be required by both freeholder and leaseholders for negotiations, and to give expert evidence to the LVT if agreement cannot be reached. TWM has regular contact with specialist valuers, and will be pleased to place clients in touch with them.
In addition to the price, there are certain fees that have to be reimbursed to the freeholder. These include costs incurred in checking whether the participating leaseholders have the right to acquire the freehold, costs relating to the conveyance of the freehold, and the costs paid by the freeholder to a valuer for advice on the value of the freehold.
The freeholder cannot recover any costs from leaseholders in connection with the LVT application.
If you wish to engage TWM Solicitors to handle the application, whether you are a freeholder or leaseholder, details of charging rates and anticipated costs will be provided on request.
The freehold of the building in which the flats are situated and, normally, any communal grounds, and buildings within the grounds that form part of the freehold title, provided they are grounds and buildings that the leaseholders have a right to use under the leases. If there are any head leasehold interests in between the freehold and the leases of the individual flats, they are acquired also.
If the landlord is missing, there is a separate procedure, involving a combination of the Courts and the LVT, which enables you to acquire the freehold even in these circumstances. Further details can be supplied on request.
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