Collective Enfranchisement is a very complex area of practice and requires specialist legal and valuation advice in all cases. We are able to assist you and your fellow leaseholders in establishing eligibility to purchase the freehold of your building as well as discuss some of the pros and cons of doing so. Following an inspection of the development, we will then prepare detailed valuation advice and liaise with your own or one of our specialist solicitors to progress the purchase all the way through to completion.
Your decision to consider purchasing the freehold may have been prompted by the service of what is known as a Section 5 (A/B/C) notice from your freeholder offering you Rights of First Refusal under the Landlord & Tenant Act 1987. We can assist you in establishing eligibility, whether the offer is a reasonable proposition and by providing guidance on taking the matter forward.
Call us today for a free consultation with one of our friendly advisors and to find out how we can assist you.
The most common reason leaseholders buy their freehold is to take control of how the building is run. If you are dissatisfied with the way the landlord manages the building, or with what the service charge is being spent on, acquiring the freehold puts those decisions in the hands of the leaseholders themselves.
It also removes the need to ask permission. Alterations, improvements and works to the building or grounds that would ordinarily require the freeholder’s consent become matters for the leaseholders to decide, without a consent fee attached.
The second major reason is the ability to grant new long leases to the flats. Once the freehold is owned collectively, the leaseholders can grant themselves leases of typically 999 years at a peppercorn ground rent.
This matters for value and for saleability. Many lenders are reluctant to advance funds against leases with less than 75 years unexpired, and become cautious well before that point. Granting new long leases removes the lease length question permanently, rather than requiring each leaseholder to extend individually every few decades. Where a collective claim is not viable, an individual statutory lease extension remains available to each leaseholder.
It is also an opportunity to put right defects in the original leases — unworkable service charge apportionments, missing rights, inadequate repairing obligations or absent enforcement provisions — which is often far harder to achieve while a third-party landlord remains in place.
Buying the freehold ends the ground rent obligation. Where leases carry rents that double at intervals or are linked to an index, this can be the single largest financial driver of a claim, and those rents are frequently the reason a flat is difficult to sell or mortgage.
Qualification turns on the building rather than on any individual lease. In broad terms:
There is no minimum ownership period.
Some buildings are excluded, including certain conversions of four or fewer units where a resident landlord has lived in the building for the requisite period. We check qualification on both the legal criteria and the physical attributes of the building before any notice is served. See our frequently asked questions for the points that most often decide qualification.
A collective claim is a group project as much as a legal one. These are the stages in the order they actually happen.
Work out who is willing to participate and confirm the building qualifies. At least half the flats must take part, and in a two-flat building that means both. This is also the point to identify anyone who cannot participate — company-owned flats, absent owners, or leaseholders mid-sale.
We appraise the building and assess the likely premium, including how it will be apportioned between the participants. Everyone needs to know their own share before committing, not just the total. The freeholder is also entitled to request access to the flats to prepare their own valuation, and must give reasonable notice before doing so.
Participants enter into a participation agreement setting out who pays what, what happens if someone withdraws, and how decisions are taken. Doing this properly at the start prevents most of the disputes that derail claims later.
The nominee purchaser is the entity that will acquire the freehold. See the section below on choosing between individuals and a company.
The section 13 notice is served on the freeholder, proposing a premium. The figure must be realistic — an unrealistically low proposal can invalidate the claim.
The freeholder has at least two months to respond, admitting or disputing the claim and proposing their own premium. Unlike an individual lease extension, no deposit is claimed at this stage.
The two surveyors negotiate the premium and the terms of acquisition. Most claims settle here.
If terms cannot be agreed, an application to the First-tier Tribunal can be made between two and six months after the counter-notice. Missing that window ends the claim.
The transfer completes and the freehold is registered at HM Land Registry. Registration delays are common at present and can be expedited where there is a reason to.
Granting 999-year leases is not automatic on completion. It is a separate, straightforward step once the transfer is registered, and it is the step that delivers most of the value.
| Stage | Typical timing |
|---|---|
| Valuation and appraisal | 5–10 days from inspection |
| Section 13 notice served | Once participants are committed |
| Counter-notice | At least 2 months later |
| Negotiation | 2–6 months |
| Tribunal application window | 2 to 6 months after counter-notice |
| Completion | Typically 9–18 months overall |
There is no calculator for a collective claim, because there are too many variables. The premium is assessed for the building as a whole and then divided between the participants, and both halves of that exercise are open to argument.
The total is divided between participants, usually by reference to the value of each flat and the length of each lease. Flats with shorter leases carry a larger share, because more of the premium is attributable to them. This is frequently the most sensitive conversation within a group, and it is far better resolved with an independent valuer’s figures than by negotiation between neighbours.
Where a building contains flats let on short tenancies, units the freeholder occupies, or non-participating units, the freeholder may be entitled or willing to take a leaseback of those units. A leaseback reduces the premium the participants pay, because the freeholder retains an interest. Whether a leaseback is mandatory or optional depends on the unit, and getting this right can materially change the cost of the claim.
Where a building contains shops, offices or other commercial space, the 25% non-residential limit must be tested carefully by floor area. Commercial units also carry their own value and their own leaseback questions, and mixed-use claims are where qualification most often fails on measurement rather than on principle.
Not every building reaches the participation threshold, and some leaseholders prefer to extend individually rather than buy collectively. Where that is the better route, our packaged service at extension.lease handles the valuation, the negotiation and the legal work for an individual statutory lease extension.
The nominee purchaser is whoever will hold the freehold once it is bought. There are two routes, and the choice has long-term consequences.
| Individuals as joint owners | A company | |
|---|---|---|
| Limit | Maximum four registered proprietors | No limit on shareholders |
| Set-up | Simplest — no incorporation needed | Incorporation, usually via a formation agent |
| Ongoing admin | None beyond the title | Annual filings and company obligations |
| On a sale of a flat | Title must be transferred — can be cumbersome | Share transfers, straightforward |
| If an owner dies | Can complicate the title | Handled through the share register |
| Best suited to | Two to four flats, stable ownership | Most buildings, and anything above four flats |
Holding the freehold directly in up to four names is genuinely simpler and cheaper at the outset, and for a two-flat building it is often the right answer. The difficulties tend to appear later — on a sale, on death, or when an owner becomes uncooperative — because the freehold title itself has to be dealt with each time. A company keeps the freehold static and moves shares instead.
Collective enfranchisement is not the only route to the freehold. Under the Landlord and Tenant Act 1987, where a landlord proposes to dispose of the freehold, qualifying tenants generally have a right of first refusal — the right to be offered it before it goes to anyone else.
If you have received a formal offer notice from your landlord, the clock is already running and the deadlines are strict.
A section 5A notice is served where the landlord intends to dispose of the freehold by contract, typically to a third-party investor. It sets out the terms and the price on which the landlord is prepared to sell.
The tenants have a period stated in the notice, of not less than two months, in which a majority of qualifying tenants may accept. A further period then runs in which they must nominate the person or company who will take the freehold.
A section 5B notice applies where the landlord intends to sell by auction. The mechanics differ: tenants who accept do not fix a price up front but acquire the right to step into the shoes of the successful bidder after the auction, on the terms achieved in the room.
Auction timetables are unforgiving and the valuation question is different — the issue is not what the freehold is worth in the abstract, but whether the price achieved is one worth matching.
If an offer notice has landed, send it to us straight away with the lease details. The first question is whether the price is worth accepting, and that is a valuation question before it is a legal one.
A large proportion of the claims we handle are in two-flat buildings — typically a Victorian or Edwardian house converted into an upper and a lower flat. The law applies in exactly the same way, but the practicalities are different.
At least half the flats must take part. In a two-flat building that means both. There is no route to the freehold under a collective claim if your neighbour will not join, which makes the conversation with them the first and most important step.
With only two participants, any difference in lease length or flat value shows up immediately in who pays what. An independent apportionment from a valuer is worth far more here than in a larger block, because there is nowhere for a disagreement to hide.
Two leaseholders can hold the freehold directly as joint proprietors without incorporating a company. That saves cost and ongoing administration, though it needs thought about what happens on a sale or a death.
If your neighbour will not participate, the freehold route is closed — but an individual statutory lease extension remains available to you alone, and may achieve most of what you need. We will tell you which is the better use of your money.
The premium is only part of the cost of a collective claim, and participants should budget for the whole picture before committing.
| Cost | Who pays | Notes |
|---|---|---|
| Premium | Participants | Apportioned between them |
| Your valuer’s fee | Participants | Fixed fee agreed before instruction |
| Your solicitor’s fee | Participants | Usually quoted per participating flat |
| Freeholder’s valuation and legal costs | Participants | Statutory; must be reasonable and can be challenged |
| Company formation | Participants | Only if a company is the nominee purchaser |
| Land Registry fees | Participants | Registering the transfer, then each new lease |
| Stamp Duty Land Tax | Participants | Where the premium exceeds the threshold |
| New 999-year leases | Participants | A separate step after registration |
| Tribunal costs | Each side | Only if terms cannot be agreed |
We work on fixed fees agreed before instruction, with hourly and success-related structures available case by case. Where the group is large, the per-flat cost of the valuation falls considerably. Each party bears its own negotiation fees, and where the freeholder’s costs are not reasonable an application can be made to the Tribunal for them to be determined. For a formal report for tax or probate purposes, see professional market valuation.
We act on collective claims across all 32 London boroughs and the surrounding South East. Location shapes these claims in ways that go well beyond flat values.
Our borough pages set out local experience, the freeholders active in each area and the building types we most often value there. For a single flat where a collective claim is not viable, see lease extension valuations.
We have spent 20 years valuing and negotiating freehold purchases under the leasehold reform legislation, acting for leaseholders and freeholders alike across London and nationwide. Our work spans two-unit Victorian conversions with loft conversion potential through to prestigious mixed-use developments of more than 80 flats. We are members of the Association of Leasehold Enfranchisement Practitioners, and where a claim cannot be settled by negotiation we prepare the evidence and appear before the First-tier Tribunal.
A freehold purchase does not end at completion. Our solicitors prepare and execute the legal work to acquire the freehold and to grant the new long leases afterwards, so the valuation and the conveyancing move together. For life after completion we can introduce you to reputable estate management companies and insurance brokers, so the building is properly run and correctly insured from day one. One point of contact, from first appraisal to new leases registered.
We act for freeholders as well as leaseholders, subject to conflict checks before we accept any instruction. If a section 13 notice has landed on your desk, the deadlines have already started to run and the decisions you take in the first few weeks shape the outcome.
Acting on both sides is the reason we can tell a freeholder where a claim is genuinely vulnerable, and tell a leaseholder where it is not.
Not every notice that arrives is valid. Qualification turns on the proportion of residential floor area, the number of qualifying tenants, the number of participants and the accuracy of the notice itself. These are questions of measurement and evidence, and they should be tested before the claim is conceded rather than after.
You have at least two months from the initial notice to serve a counter-notice, admitting or disputing the claim and stating your own proposed premium. That deadline is not negotiable, and failing to respond can mean the claim proceeds on the leaseholders’ terms. We assess the premium and prepare the valuation evidence in time to meet it.
These are the two areas where freeholders most often leave money behind. Unrealised roof space, airspace, basements, garages or adjoining land can carry significant development value, and it is only reflected in the premium if it is identified and evidenced. Leasebacks over commercial units, tenanted flats and non-participating units allow you to retain an interest and reduce the sum the participants pay you for it.
The participants are responsible for your reasonable valuation and legal costs under the Act. What counts as reasonable is itself capable of dispute, and can be determined by the First-tier Tribunal. We prepare and support cost claims as well as the valuation.
Most claims settle by negotiation. Where they do not, we prepare CPR-compliant evidence and appear before the First-tier Tribunal. See our litigation and expert witness service for how we approach contested claims.
Yes, it can still be worth considering. Many leaseholders decide to purchase the freehold not only because of poor management, but because they want greater long-term control over the building.
Owning the freehold can make it easier to grant longer leases, remove or reduce ground rents, deal with defects in old leases and make decisions about future management. Even where the current arrangements are working well, acquiring the freehold may help protect the value and marketability of the flats.
Not every leaseholder has to participate, provided the legal qualification requirements are met.
However, the number of participating leaseholders can affect how the cost is divided and how the freehold is owned after completion. It is sensible to establish interest within the building at an early stage, so the participating leaseholders understand the likely cost, structure and practical implications before proceeding.
You can begin exploring the process, gathering information and obtaining initial advice before everyone has made a final decision.
Before a formal claim is served, however, the participating leaseholders will need to be identified and the nominee purchaser will need to be agreed. We can help you understand the likely premium and process so leaseholders can make a more informed decision about whether to proceed.
We will usually need copies of the leases, title information, details of the freeholder and any intermediate landlords, ground rent information and details of the flats participating in the claim.
It is also helpful to have information about the building, any commercial parts, common areas, gardens, parking spaces, service charge arrangements and any recent correspondence from the freeholder. If you do not have everything available, we can let you know what is essential at the start.
If your freeholder has served a Section 5 notice, this may mean they are offering leaseholders the right of first refusal before disposing of their interest.
It is important to act quickly, as strict deadlines may apply. We can help you consider whether the offer appears reasonable, whether the leaseholders may qualify and what valuation advice is needed before deciding how to respond.
No. Buying the freehold and extending the leases are separate steps.
Once the freehold has been acquired, the leaseholders may be in a position to grant themselves new long leases, often on more favourable terms. This should be handled properly with legal advice, especially where not all leaseholders participated in the freehold purchase or where leases contain defects that need correcting.
Delays can arise if documents are missing, leaseholders are slow to organise themselves, the building has an unusual title structure, there are commercial parts, the freeholder disputes eligibility or the premium cannot be agreed.
The statutory process also includes fixed deadlines, including the landlord’s response period and later deadlines for tribunal applications or completion. Good preparation at the start can help avoid unnecessary delays and reduce the risk of the claim being withdrawn or becoming invalid.
Collective enfranchisement is a specialist area of valuation and negotiation. The premium payable for the freehold can be significant, and the figure inserted into the Initial Notice needs to be carefully considered.
A specialist surveyor can advise on the likely premium, prepare valuation evidence, assist with strategy and negotiate with the landlord’s surveyor. This helps leaseholders make informed decisions and gives the claim a stronger foundation from the outset.
The total premium is assessed for the building and then apportioned between participants, usually by reference to the value of each flat and the length of each lease. Flats with shorter leases carry a larger share because more of the premium is attributable to them.
Hope value reflects the prospect that a non-participating leaseholder will one day extend their own lease. It is payable in respect of flats that do not join the claim, and is one reason a claim can become more expensive when participation is low.
A leaseback is a lease granted back to the freeholder over units such as commercial space, flats let on short tenancies, or non-participating units. Because the freeholder retains an interest, a leaseback reduces the premium the participants pay. Whether one is mandatory or optional depends on the unit.
Possibly. No more than 25% of the internal floor area may be in non-residential use, disregarding common parts. This is a measurement exercise rather than a matter of impression, and mixed-use claims most often fail on floor area rather than on principle.
No. Up to four leaseholders can hold the freehold directly as joint registered proprietors, which avoids incorporation and ongoing filings. Above four participants a company is required, and for most buildings a company is simpler in the long run because a sale is dealt with by transferring shares rather than the freehold title.
No. Granting new long leases is a separate step once the transfer is registered. It is straightforward, but it must actually be done — and it is the step that delivers most of the value of buying the freehold.
That may be a section 5A or 5B offer notice under the Landlord and Tenant Act 1987, giving you a right of first refusal. The deadlines are strict and the route can be cheaper than a statutory claim, but the price still needs testing. Send us the notice as soon as you receive it.
Yes. Untraced or absent freeholders and leaseholders complicate a claim but do not prevent it. The route depends on who is missing, and may involve an application to the court or the tribunal.
