Freehold Purchase

You can make a statutory claim to extend your lease if you meet these requirements:

• You have a long lease. This means that your lease was originally given for more than 21 years.
• You have owned the lease for at least two years. This is calculated from the date that you became the registered owner of the lease at the Land Registry. You do not have to live in the house for two years, just own it.

Be careful: if you transfer the ownership, even from one name to two names, you may have to wait for another two years before you can make a claim.

We can help you check if you qualify for a freehold enfranchisement claim.

To start the process of extending your lease, we will send a formal notice to your landlord. Your notice will have the necessary information to make it valid, such as:

• Important details to show that you do qualify.

Sometimes we may need to send your notice to other parties, such as a management company or another landlord.

Your landlord can do various things after receiving your notice, including:

• Asking for evidence that you own the house and have done so for at least two years.
• Asking for a deposit.

The price of the freehold depends on a complex formula that takes into account various factors, such as the house value when the notice was given, the remaining lease term and the ground rent for the lease. There is a range of possible prices because some of the factors are subjective.

You should get a specialist surveyor to value the extension before starting the process, so that they can suggest a price in their notice. The surveyor should also give an estimate of the highest price, if the landlord wants to negotiate.

The landlord may not accept the suggested price and may counter with a higher amount. Then, negotiations will follow to agree on the price and the other terms of the purchase. We and the surveyor can help with these negotiations.

Besides the extension price, there will be other costs to pay, such as:

• Our fees and the surveyor's fees, including any expenses (such as a fee for registering the purchase at the Land Registry).
• The reasonable fees of the landlord's lawyer and surveyor for dealing with the claim, preparing a valuation and transferring the freehold. It is hard to predict these fees as they depend on the landlord's lawyers and how long the process takes.
• Any stamp duty land tax that might be due on the price. We can tell you how much it is once the price is settled.

It may last more than a year from when we send the notice until it is done, depending on how much time it takes to agree with the landlord on the terms.

The answer depends on how much time is left on the lease and how it affects the selling price. A lease with 80 years (or less) remaining can lower the value significantly and reduce the number of potential buyers.

You can either do it yourself before you sell, or you can start the process and then transfer it to the buyer, who will pay for it and complete it. The second option can save you time and money, and also allow the buyer to purchase the freehold as soon as they buy the property, without waiting for two years to become eligible.

You might save time and money by an informal negotiation with your landlord. However, you should check the details of any informal offer carefully and know the risks of not using the legal steps.

The legal steps have some advantages, such as:

• There is a fixed schedule for agreeing and finishing the lease extension. Without this, the landlord can drag out or even cancel the terms, without any penalty.
• There is a fixed method for deciding the price. Landlords who offer informal terms may ask for a higher price, so you still need to get valuation advice.
• You can refer the case to a Tribunal for a binding judgment if necessary.

The informal process will not work if you are planning to sell your house as the talks with the landlord will usually be only for you. If you negotiate informally, you will need to have completed the purchase with the landlord before you sell, unless the landlord is willing to promise the same terms to your buyer.

The government has proposed to make it easier and cheaper for leasehold homeowners to buy their freehold. These include different ways of calculating the price to reduce the cost. However, there is a lot of detail still to work out and no timescale for the changes. It could be years before they come into effect.

Whether you should start now or wait for the changes in the law depends on various factors, including the number of years left on your lease and whether you plan to sell the house in the near future.