What To Do When your Landlord decides to Sell the Freehold
You just received a letter in the post saying that your Landlord is serving a Section 5 Notice and intends to sell the Freehold of your building, making you an offer. You know deep down that you should examine your options but where do you start?
The first thing to do is to Keep Calm but do not Carry On as usual. The clock is ticking so you need to act quickly.
The next thing is to realise that this is a great opportunity which may never come round again.
The Freeholder is disposing of their estate either to an unknown purchaser such as a developer or via an auction.
Under UK law, you as a leaseholder have the right of first refusal and can purchase your freehold should you wish.
Exercising your right is not that easy. You need to:-
- Identify volunteers to lead the process
- Recruit at least 50% of the apartment owners in your building to collaborate
- Decide on the financial merit of purchasing the freehold at the given offer price
- Agree on the funding structure
- Nominate or create a purchaser (often a limited company)
All before officially accepting the offer in the correct legal form.
And you have 2 months or less to do all that.
Then of course, you need to collect the funds and complete the transaction.
Sounds daunting? Don’t lose heart!
Unlike a Collective Enfranchisement claim, this take-it-or-leave-it offer means that you do not need to haggle over the price.
Being well organised and cohesive is key.
Experts can help with specific parts of the process.
- Engage a qualified surveyor to determine the market value of the Freehold. If the offer price is less than market value, then you can concentrate on organising leaseholders to accept it.
- There are many very good solicitors who can perform the legal and conveyancing steps required. Seek one out that has relevant experience.
Alternatively, you can engage an expert to mentor you and manage the entire process from end to end, often with a cost saving.
Take advantage of the opportunities that come with owning your Freehold. Modernise your leases, improve the management of your building and prioritise those works, repairs and improvements. All this will add real value to your apartments and allow you to spend your precious time on what’s important – your life.
If you can do all that, you will never look back!