Freehold Purchase Services
Typically we are asked to advise on 2 scenarios
| Collective Enfranchisement for blocks of flats |
1 flat buys a share of an exisiting freehold company |
Depending on when your property was built the law applies varying rules:
| Houses Via 1967 Act Route |
Houses Via 1974 Act Route |
1967 Act Route
Applies to Houses only.
Under the 1967 Act the enfranchisement price is based on the value of the land with their being no obligation for the tenant to pay any marriage value at all.
But, the 1967 Act requires the valuation to take into account the gross development value so the valuer must look at the most profitable arrangement of the property.
The existence of an un-implemented planning permission for example, may create additional value. This is because a 3 bedroom house with planning permission for a loft conversion is probably worth more than a 3 bedroom house with no planning permission for a loft conversion.
Under the 1967 Act a valuer must take into account the freeholders current interest (right to receive ground rent) for the remainder of the term, then calculate what a modern ground rent would be taking into account any development potential.
We are not specialists in the qualification criteria under the 1967 Act so separate advice from a Solicitor would be required. We can assist in sourcing solicitors who specialise in this area.
1974 Act Route
Applies to Houses only. Where a lessee qualifies under the amendment in the Housing Act of 1974, then the enfranchisement price is based on full open market value plus a share of the marriage value. The share is stipulated as the share of marriage value that would normally be paid when landlord and tenant are equally willing to do a deal. We are not specialists in the qualification criteria under the 1967 Act so separate advice from a Solicitor would be required. We can assist in sourcing solicitors who specialise in this area.
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