The freehold of the building can be acquired by qualifying lessees of qualifying flats as a matter of right. Though leasehold enfranchisement seems to be an attractive option yet it brings along its own burden of responsibility. Lessees should be clear about what they actually want to achieve. It might work better for them to extend their leases and/or acquire the right to manage. A lot needs to be considered for having a third party as a landlord rather than yourself and your neighbours.
While deciding if the freehold should be bought it needs to be considered whether the freehold has recently been sold and whether the right of first refusal was given to the lessees. At times, purchasing from a willing landlord might be less expensive than exercising the right to acquire the freehold; and in case the tenants were not given the right to first refusal they will have the right to acquire the freehold from the purchaser on the same terms as he acquired it. Further, if the person decides to acquire the freehold he should consider whether to apply to extend some or all of the leases simultaneously, particularly if the unexpired terms of the leases are about to fall below 80 years, which is the point when more money will have to be shelled out.
It is recommended that all the lessees willing to buy the freehold should enter into a participation agreement which sets out the basis on which they are collectively making the purchase. Amongst other things it will sort out the contributions to the price, what happens in case a contribution is not paid, and the terms as per which the new freeholder will extend leases.
Our team can advise lessees and freeholders about their rights, represent them in an acquisition and also make any applications to the Court or the Leasehold Valuation Tribunal if required.