Buy your freehold
Key reasons for buying your freehold
The following are the main reasons for buying your freehold:
Property value – you may wish to maintain and enhance the value of your flat. Buying a freehold and subsequently changing the lease to a much longer term (typically 999 years) will make your flat worth more.
Service charges – when you have a share of freehold for your flat, you are in a much better position to achieve savings when repairs or maintenance are needed, mainly because the previous freeholder may have had little incentive to keep costs low.
Ground rent – the price you pay as a flat owner to purchase your freehold includes an element for ground rent. Once you have acquired the freehold, you can reduce ground rent to zero.
Insurance costs – by shopping around, the new freehold company can usually obtain large reductions in their buildings insurance premiums and will no longer pay the former freeholder any insurance commission. In the event of a claim, the risks associated with it being handled by an absent freeholder can be avoided.
Control and management – ultimately, acquiring the freehold gives you much more control over your home. You can decide how your property should be managed and can best decide how to utilise the service charges. The new freehold company can also deal more effectively with applications for any consents that are needed. In extreme cases, particularly with notorious or absent freeholders, the ability to obtain service charge information, ground rent arrears and so on when a flat sale is proposed, will be enhanced by taking control of the freehold.
Reduces risk of building work taking place on your property – buying your freehold removes the risk of your existing freeholder seeking planning permission on parts of the site, for example roof extensions, which flat owners may be powerless to influence under their current leases.
The right of first refusal – Section 5 – ACT FAST!
Another significant piece of legislation in this area is The Landlord and Tenant Act 1987, which makes it a criminal offence for freeholders to sell the freehold to a third party without having first offered it to the flat owners.
If you have received a ‘Section 5’ Notice from your freeholder, you are being offered the right to buy your freehold. In other words, the freeholder wants to sell the freehold, although you may not be their first choice. However, in law, the flat owners have the right to first refusal.
We urge you not to waste this opportunity, since it is much easier to acquire it this way than to puruse an unwilling freeholder. However, it is imperative that you act quickly, since if you do not respond by the deadline, the opportunity may be lost.
In our experience, it is difficult for flat owners to get organised in time without our help, so please call us WITHOUT DELAY and without commitment.