BUYING YOUR FREEHOLD blockqualify Does our
Mark ChICktalks Flat Livingreaders through the first step of buying your freehold
If youwant to buythe freehold to your blockofflats(usingthe LeaseholdReform Housing and Urban Development Act 1993, also knownas‘the1993Act’) then 50%ormore of the‘qualifyingflat owners’inyourbuilding need to actcollectively. One of the first things to think about, before
embarking on this process, iswhether the building actually qualifiesunderthe legislation. Setout below, aresomeofthe questions you need to ask if you are considering a collective freehold purchase.
what type of leases do youhaveinthe building?
At least two thirds of the building must contain flats that have been let on long leases. Typically these will be leases originally grantedfor 99 or 125years, butany leaselongerthan21 yearswhenitstarted will count.
arethereany multiple owners?
Whenyou arecountingupthe number of qualifyingflat owners to get to themagic 50%, if you
findthatanyoneownsthree or more flats in the samenamethen they will not countasqualifyingflat owners underthe 1993 Act.
Is your building exempt?
Thereare sometypesofbuilding that are exempt
fromthelegislation.These include buildingsinacathedral precinct, or those builtoverthe trackofanoperational railway. Anotherexemption covers ‘resident landlords.’Thiswillapply if thereare less than four flats,the building is notpurpose built and the personwho carried out the conversion to flats (oranother adultmember of theirfamily) has livedthere (astheirmain residence) foratleast ayearbeforenoticeis served.
arethereany non-residential areasin the building?
If more than 25%of the building is used for non-residential purposes then thebuilding will not
qualify.The percentage used for non- residentialpurposesisworkedout by looking at thenet internal floor
area.The common partsdon’t count. Specialist help will be needed tomeasureifthe position is anything otherthanobvious.
Flat Living Winter 2011
does thebuildingoverlapwith neighbouring property?
If the building partly overhangs another building or overlaps with neighbouring property it is possible that youwillnot qualify. Again, seek specialist help.
Is your block a ‘building’ for the purposes of the legislation?
This might sound obvious, but there is often somescopefor debate. In thelanguageofthe 1993 Act, abuilding is a“separate or self- contained set of premises.” However, part of abuilding canbeclaimed if it could exist independently. This is worked outbylooking atwhetherithas independentservices,orifnot, whetherindependent services could easily be provided to that part of the building. If thereare significant
shared items(such as
machinery or plant) or a shared structural element, then the area in question will have to be considered as part of a larger structure.
arethereenough qualifyingflat owners in thebuilding?
Whenyou areworking outthe number of qualifyingflat owners,you arenot restricted to counting up numbersinthesmallest possible ‘enfranchiseableunit’ in the
building.Instead,ifthere aretwo or more potentially independent parts of a building, then aclaim canbemade across these units(provided that together they contain a qualifying number of flat owners), even
asandrewPrIdell and I explained in our recent talk, TakeNoNotice! at the ALEPAutumnConference on 18 October 20011, serving notice under the Leasehold ReformHousing and Urban Development Act 1993, is not as easy as it seems, writesMarkchick. The fact that solicitors and valuers felt the need to get together to discussthe issueis something of a clue. There are anumberoftechnical pitfalls
At least two thirds of the buildingmust contain flats that are let on long leases
though each part couldformthe basisofa claim in itsownright.
assuming that the building qualifies, what will be included in the claim?
Thefreeholdtothe ‘footprint’ofthe building itself will be included-but youneed to take particular care to consider separately other areas such as common gardens, car parking or otherareas if facilities areusedincommon. Where this is thecase, itmaybepossible for thefreeholdertoretain theseareas andsimply grantrightsoverthem. Thetreatment of theseother areasis
beyond the scope of this article, but a different approach (depending on the type of legal rights enjoyed) is needed – and requires close liaison between your solicitor and the surveyor.–inorder to ensure that thenoticeof claim is correct.●
MarkChick Partner, Bishop&SewellLLPandALEP CommitteeMember tel
www.bishopandsewell.co.uk servIngnotICe –DON’t tRY tHIs at HOmE...
that evenaprofessionalcan fall into and it is not just filling in a fewforms! Weoften see disappointed
flatownerswhose claims have gone wrong, either because they have dealt with theclaim themselves or because they have used advisorswhowere not experts. If your notice is not
served correctlyyou will be liable forthe landlord’s costs of investigating your
claim (legal and valuation) and you will have to start
alloveragain.Theremay also be otherlosses, for exampleifyourlease has slipped below80 years in the meantime,making theclaim more expensiveincapital terms. Specialist advice should
always be sought froma firm of legalorvaluationadvisors with a proven track record in this area, such as anALEP member.
55
Jargon Buster
whatarequalIfyIng tenants?Apersonisa qualifyingtenant if they areatenantundera long leasefora termexceeding 21years.
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