If you are a tenant of a leasehold property, you potentially have the right to buy the freehold or to extend the lease by 50 years – a right that has been in place since 1967.
Can You Buy The Freehold To Your Property?
As a tenant in a house under a long lease, there are certain criteria you must meet in order to exercise your right to buy the freehold to the property.
As a guide, you need to meet the following criteria:
- Your property is a house
- You are a tenant in the house under a long lease of 21 or more years
- You have owned the house for at least 2 years
- Your house is self-contained and separate from adjoining property
There are exceptions to these rules, including an allowance if you took over the tenancy when a family member died and have been resident in the house. You no longer need to have lived in the property as the right to buy the freehold is based on ownership alone.
However, there are certain circumstances that mean it’s unlikely you’ll be able to buy the freehold to your property. Examples of when this happens, include:
- The landlord of the property is the National Trust
- Your lease is a certain type of shared ownership lease
- Your house is let under more than one tenancy
- You are a business tenant as defined in Part II of the Landlord and Tenant Act 1954
What Will It Cost Me To Buy The Freehold?
The valuation of the property’s freehold is calculated based on several factors, including ground rent and length of remaining years on the lease.
As well as the value of the freehold, there are additional costs you should be aware of, including:
- Your landlord’s professional costs for solicitor and surveyor
- Your costs for solicitor and surveyor
- Normal costs for buying a property such as stamp duty, land registry fees, and cost of searches
- The statutory deposit – your landlord will ask for this when you make your claim, and it is three times the amount of your annual rent
What Is The Process For Buying The Freehold?
Before you make a claim of entitlement to buy the freehold, make sure you obtain a formal valuation of the property first. Although you do have the right to change your mind within one month of agreeing the price of the freehold, the act of making a claim creates a binding contract and if you later fail to go ahead with the purchase, you could lose your statutory deposit.
You should understand the rights and restrictions you have within your current lease as these rights and restrictions can still apply to the freehold when you buy it. If you want to make any future developments to the property, you need to be sure that the covenants within the lease won’t impact these plans.
Sometimes the rights granted to the leasehold title do not follow through to the freehold title. In these circumstances, you would buy the freehold, but also keep your leasehold title open. Your solicitor can advise whether or not this is necessary.
What If The Freeholder Says No?
If the freeholder refuses your entitlement claim to buy the freehold and there is a dispute, the matter should be referred to a county court for settlement. If the dispute is over the price of the freehold, then the matter must be referred to the First Tier Tribunal (FTT) to decide. Either route is lengthy, adding extra costs to the process.
What Happens When The Purchase Has Been Agreed?
Once all the details have been agreed with the freeholder either direct, through court action or via a FTT, then your freehold purchase can go ahead.
All the relevant searches and surveys will be carried out prior to completion. Once completion has happened, the transfer of the freehold to your name will be registered at the Land Registry and you will need to pay any owed stamp duty. It usually takes several months for the Land Registry to complete registration and to cancel your existing lease.
Helping You With The Purchase Of The Freehold
When you want to buy the freehold to your leasehold property, the process is not always straightforward. Our specialist solicitors are here to help you and will make sure that your entitlement claim is carried out in the best possible way, to ensure that the process is both stress-free and efficient.
Your solicitor will advise you on your entitlement rights as well as the rights stated with your current lease and will help resolve any issues or disputes that arise during the claims process.
To speak to one of our professional solicitors about buying the freehold to your property, please contact us at our Chorlton office on 0161 860 7123 or email firstname.lastname@example.org or at our Failsworth office on 0161 681 4005 or email email@example.com