Timing is essential when buying the freehold of your apartment block in an effort to forestall substantial extra expenses. One of the most widespread explanations for failing to obtain the freehold of a block (when being permitted to do so) is late submission and reaction to notices and not adhering to the firm timetable. The timetable for a collective enfranchisement procedure under Section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 is carefully laid out and it is worth expertise the timeline regardless of whether you are using a leasehold enfranchisement solicitor or not.

There is no obligation to avail yourself of a solicitor for serving the assorted notices. Nonetheless, the costs of slipping up can be extremely high. If you neglect deadlines you may be liable for the other party’s abortive expenses. Plus in scores of instances lessees would have to delay another year before they can serve a further notice. All the while, the price of purchasing the freehold might expand for the reason that the lease term will shrink by a year and one factor of the price reckoning is based on this amount.

Virtually certainly they will be dealing with a well-paid solicitor acting on behalf of the freeholder. One is more likely to get rational and fair-minded responses to your notices and correspondence if you have a solicitor acting on your behalf as compared with acting in person. It is furthermore prudent to use an expert, along the lines of a vetted member of the Association of Leasehold Enfranchisement Practitioners, since this is a dynamic area of legislation filled with complexities that a neighborhood family attorney can easily miss.

Additionally, you should have the block of flats professionally valued. This does not mean the retail value of the apartment, but a estimate of the compensation the freeholder is entitled to receive if you pay money for the freehold or extend your lease. Avoid the urge to guess what each value is after meeting an estate agent and then adding up all the properties! If lessees submit a number that is not considered reasonable - and that means carefully based on agreed fundamentals as laid down in law and previous practice - then your notice may be deemed invalid. Specialist enfranchisement valuers ought to be employed for this purpose.

If you are undertaking a Section 13 process you should, firstly, be certain you have spoken to as many of your neighbours as possible. At the very least flat owners would need half of all the owners in the estate to consent to sign the initial notice. Still, there is no legal obligation to talk to each neighbour if these parties are preparing to buy the freehold.

It is liable to take flat owners a protracted period to rally the support and you would be advised to set aside some months for this process. A participation agreement and gaining involvement by much more than half those eligable will help cut down the chance that the procedure is derailed some way into the process by neighbours quitting when moving, dying or lack of fundsor for some other reason.

Information notice
It could be advisable to serve a non- compulsory Information Notice to ensure lessees get the correct data in relation to the freeholder, uncover any intermediate leases and get sight of all relevant documents. Section 11 of the 1993 Leasehold Reform and Urban Development Act provides a right for lessees to serve notices on a variety of entities with interests in their block. At this point, the clock has not started ticking and it offers a chance for leaseholders to get all their paperwork in order in good time.

It is critical that your notice and offer price for the purchase of the freehold is based on established essentials of valuation. If not, flat owners might throw away a considerable amount of time and money, in particular in the event that the freeholder decides to dispute your notice. It will only take a few weeks for a specialist enfranchisement surveyor, or valuer (the two terms are interchangeable), to make available the required figures, ready for the solicitor to draw up the Section 13 notice.

Nominee purchaser
This can be an individual however is typically a limited company, especially for developments with more than three lessees. There is provision in the 2002 Commonhold and Leasehold Reform Act that a particular vehicle - a Right To Enfranchise (RTE) company - be used. However this clause has not yet commenced and is now not expected to. There ought to be a clearly defined organization or group of neighbours who propose to purchase their freehold.

Serve the initial notice
The valuation date might at this point be fixed and delays will not result in increased expenses in particular resulting from your lease shortening every day. The freeholder (referred to as the landlord) has 21 days to request more data from the flat owners (referred to as lessees, leaseholders or tenants). The nominee purchaser has 21 days to reply to any such request.

Counter Notice
The freeholder has to serve a Counter Notice by a date specified by you. This date must be no less than two months from the date that the Initial Notice was served. If the freeholder does not do this then the burden is on the nominee purchaser (the vehicle applying to get the freehold) to after that apply to their County Court for a Vesting Order. Otherwise the flat owners’ notice is deemed to have been withdrawn.

The freeholder may possibly respond in the Counter Notice alleging that the flat proprietors do not meet the requirements to submit a Section 13 notice. If the notice has not been correctly drawn up then qualified solicitors might expose such faults at this point.

Response to Counter Notice
The flat owners will typically submit an initial notice with a suggested purchase figure lower than that which an independent valuer may suggest. It is not a suprise that the freeholder’s counter notice will regularly propose a higher amount. At that moment the negotiation begins. There is no rigid or restricted period for this negotiation and leaseholders should to be wary of freeholders that drag things out. However, frequently the parties come to an agreement on a value and a sale contract may be drawn up.

Invalid Counter Notices
In the event of the Counter Notice claiming invalidity, the nominee purchaser has to apply to the courts declaring they consider the notice is in actual fact valid. This must be done within 2 months of the date of the Counter Notice.

Leasehold Valuation Tribunal
Now the parties are in dispute. They might make an effort to negotiate and resolve matters. However, in the event that a impasse persists, the flat owners have a 4-month opportunity to apply to a group known as the Leasehold Valuation Tribunal to make a ruling. This request can not be made before 2 months have gone following the Counter Notice date, but can not be for a longer time than six months subsequent to this date.

Now the clock stops for the time being. There can be an extensive scope in the durations of time it takes for the LVT to fix a tribunal date. The variation is regional seeing as the LVTs are divided into geographic areas and history suggests that the period may stretch from between 3 months and twelve months.

The LVT will send its verdict and this will become final and indisputable twenty one days after it is sent by them. All through these twenty one days leaseholders are able to still dispute the LVT ruling but this goes to a superior court, the Lands Tribunal, if the LVT agrees. At this point overheads rocket enormously. While flat owners can conceivably keep away from legal representation even at the LVT, it is nigh on unavoidable in higher courts.

Draft Contract
If there is no escalation to the Lands Tribunal through those 21 days, after that the freeholder has to present a draft contract within this time. And within 2 months of the date of the LVT adjudication, both the freeholder and the leaseholders are expected to have signed the contract.

When the deal is signed, there will be conveyancing and tax implications that must be dealt with by the pertinent experts. Flat owners may wish to seek advice from an accountant very early in the procedure - even ahead of bringing together your fellow lessees - because the ‘vehicle’ through which you obtain the freehold may well have major tax implications.

The law insists on this clear timetable, though it is possible to come to a deal ‘outside the act’ and to negotiate informally. This is rarely a preferred course of action when looking to purchase the freehold since there is no compulsion for the freeholder to co-operate. In most cases, freeholders do not wish to market the freehold unless they must and this is why a Section 13 process may frequently be a better choice in compelling the freeholder to play ball. On the other hand, a co-operative landlord my accellerate the procedure and this is where professional knowledge and high-quality assistance become invaluable.

Author's Bio: 

Andrew Szebeni is part of the management team of the Association of Leasehold Enfranchisement Practitioners. ALEP has more than 100 members, each vetted before joining. They include solicitors, surveyors, intermediaries, managing agents and other professionals in England and Wales specialising in the field of leasehold enfranchisement. Find out more about collective enfranchisment at http://www.alep.org.uk/buying-the-freehold-of-your-block-of-flats