Written by Katherine Thorpe, Enfranchisement Lawyer, Brady Solicitors. Katherine advises leaseholders, freeholders and RTM companies on lease extensions, collective enfranchisement and property management disputes.
Most collective enfranchisement claims begin the same way. One leaseholder, sometimes two, decides the building should own its freehold. They do the reading, speak to a solicitor, work through the numbers, and come to the conclusion that buying the freehold collectively would mean longer leases, lower costs, and proper control over how the building is managed.
Then comes the part that no statute or legal guide quite prepares anyone for: getting enough neighbours to come along.
The law requires a minimum number of qualifying tenants to participate before a claim can proceed, and in practice that means the whole project depends on whether one or two motivated leaseholders can bring a wider group with them. Having worked on collective enfranchisement claims for a number of years, that organising stage is consistently the hardest part of the process, and the one where good preparation makes the biggest difference.
How many leaseholders do you actually need?
The participation threshold is set by the Leasehold Reform, Housing and Urban Development Act 1993. To serve a valid initial notice under section 13, at least 50% of the qualifying tenants in the building must participate in the claim.
If the building has only 2 qualifying tenants, both must participate, because the 1993 Act requires the initial notice to be given by at least 2 qualifying tenants.
A qualifying tenant is someone who holds a long lease, meaning a lease originally granted for more than 21 years. It does not matter how much of the term is left to run. There is a separate requirement for the building itself: at least two-thirds of the flats in the building must be held by qualifying tenants for the right to collective enfranchisement to exist at all. If a building has a high proportion of commercial units occupying more than 25% of the internal floor area, it may not qualify.
One point that catches people out: under section 5 of the 1993 Act, a person who is a qualifying tenant of 3 or more flats in the same building ceases to be a qualifying tenant of any of them. Someone who holds 2 flats remains a qualifying tenant of both, but at 3 flats the rule bites and all of their flats fall out of the qualifying pool. In buildings where one investor owns several flats, this can significantly reduce the eligible participants and also affects the two-thirds calculation, because flats held by a non-qualifying tenant do not count.
In practical terms, if a building has 20 flats and 16 are held by qualifying tenants, at least 10 of those 16 need to participate. My advice is always to aim well above the 50% minimum, as leaseholders can drop out or sell their flats during the process. Starting at exactly 50% and losing 1 participant before the notice is served means the claim fails.
Why people say no, and what you can do about it
I hear the phrase “herding cats” from clients more than any other description of this process. It’s accurate. The organiser is asking a group of people who may not know each other well to commit money and time to a legal process they don’t fully understand. Some will say yes immediately. Others will take months. Some will never respond at all.
The most common objections I see fall into a few categories:
How to approach your neighbours
Starting early matters. The initial conversation with neighbours should happen before any money is spent on legal fees. At this stage, the aim is to test the appetite, not to ask for a commitment.
A brief, plain-language letter or email to every leaseholder in the building is the right first step. It should cover 4 things: what collective enfranchisement is (in 2 sentences, not 2 pages), what the likely benefits are, what it will roughly cost per flat, and what the next step is, which at this stage is simply to express interest.
If the building is large enough, a group meeting can help. People who are uncertain often become more confident when they hear others asking the same questions. If a solicitor can attend that meeting, even for 30 minutes, it builds trust. I’ve found that leaseholders respond well to knowing there is a real person behind the legal process, not just a series of emails.
Being clear about what participation means is important. Participants will need to contribute to costs, sign documents, and provide information about their lease. They won’t need to negotiate with the freeholder, attend tribunal hearings, or project-manage the claim. That’s what the solicitor and the valuer do.
Understanding the premium
The price payable for the freehold, known as the premium, is calculated under Schedule 6 of the 1993 Act. It broadly reflects the value of the freeholder’s interest, including the capitalised ground rent income and the value of the reversion.
Where any participating flat has fewer than 80 years left on its lease, an additional element called marriage value also applies. Because the premium turns on the lease lengths and other features of the specific building, it should be assessed by a qualified valuer who specialises in enfranchisement. A solicitor can arrange that referral.
Put a participation agreement in place early
Once there are enough interested leaseholders, the next step is a participation agreement. This is a simple contract between all the participating leaseholders that sets out voting rights, cost contributions, decision-making rules, and what happens if someone drops out.
This document matters more than most people realise. Without it, there is a group of individuals with a shared intention but no structure. Disagreements about costs, about who makes decisions, or about what happens after the freehold is acquired can derail a claim at any stage. I have seen claims with enthusiastic participants fall apart because nobody agreed at the start how disputes between the leaseholders themselves would be resolved.
The agreement should also cover post-completion matters: how the freehold company will be run, how new lease extensions will be granted, and how management responsibilities will be allocated. The solicitor will draft this, but raising it with neighbours early helps them understand they are entering a structured process, not an informal arrangement.
Setting up the nominee purchaser
The initial notice under section 13 must name a nominee purchaser, which is the entity that will acquire the freehold on behalf of the participating leaseholders. In almost all cases, this is a company limited by shares, with each participating leaseholder holding a share.
The company needs to be formed before the notice is served. This is straightforward, but it’s another step that requires agreement among participants on how shares are allocated and how the company’s articles of association are drafted. The solicitor handles the formation, but the leaseholders need to agree the structure.
When to involve a solicitor
There is a common assumption that a solicitor should not be instructed until there are confirmed participants. That is understandable from a cost perspective, but it can cause problems. A solicitor can check the building’s eligibility before months are spent recruiting neighbours for a claim that won’t qualify. They can also advise on the participation threshold for the specific building, which is not always as simple as counting flats.
My recommendation: get a preliminary eligibility check done first. Confirm the building qualifies, confirm how many participants are needed, and get a rough cost estimate. Then use that information to approach neighbours with something concrete. “We need 10 of the 16 qualifying leaseholders, the estimated cost per flat is between X and Y, and here’s what we get at the end of it” is a much stronger pitch than “we should probably look into buying the freehold.”
What I see in practice
The claims that succeed are the ones with an organised lead leaseholder. Someone who keeps a list of who is in and who is out. Someone who follows up. Someone who makes the effort to explain what is happening at each stage, in language that their neighbours understand, because not everyone processes legal terminology the same way.
I had a client recently who asked every leaseholder in the building to put in £25 as an initial contribution if they wanted to participate. Not towards legal fees, just as a sign of commitment. His reasoning was simple: when money is involved, people actually reply. It worked. He got responses from leaseholders who had ignored 3 previous letters. That £25 was not about funding the claim. It was about filtering out the people who were genuinely interested from those who were just nodding along.
The claims that stall are usually the ones where the lead leaseholder tries to communicate the legal detail rather than the practical outcome. Other leaseholders do not need to know what a section 13 notice is. They need to know what they are paying, what they are getting, and how long it takes. Keep the message simple. “We buy the freehold together. Each flat pays roughly X. The process takes 8 to 12 months. At the end we own the building, extend our leases to 999 years, and stop paying ground rent.” That is the pitch. The legal mechanics are the solicitor’s problem.
I usually call the person driving the claim the “head leaseholder.” They are not a formal role under the Act, but they are the person I communicate with, and they relay information to the group. If that is the person reading this article, the best thing they can do is stay organised, stay patient, and keep the process moving even when the neighbours go quiet.
What the collective enfranchisement process looks like once the numbers are in place
Once there are enough participants and a participation agreement in place, the formal process begins.
The solicitor will instruct a valuation before the notice is served. The valuation date for calculating the premium is the date the section 13 notice is served, so the valuer’s figure needs to reflect market conditions as at that point. A practical rule of thumb is that the valuation should be no more than 3 months old at the date of service. The nominee purchaser company is formed, the section 13 initial notice is drafted (specifying the proposed premium informed by the valuation), and the notice is served on the freeholder.
From that point, the freeholder must respond with a counter-notice under section 21 by the date specified in the section 13 notice. That date must be at least 2 months from the date of service, and in practice the section 13 notice usually specifies exactly that, though it can be longer. Then there is a negotiation period, typically around 6 months, during which the participating leaseholders’ valuer and the freeholder’s valuer try to agree the premium. If they can’t agree, either side can apply to the First-tier Tribunal (Property Chamber) for a determination.
The whole process, from serving the notice to completing the purchase of the freehold, usually takes between 8 and 12 months. It can take longer if the freeholder is slow to respond or if the matter goes to tribunal. There will be quiet periods where nothing appears to be happening. That is normal. The statutory timescales create gaps, and the valuation negotiation does not produce weekly updates. The solicitor is not ignoring the file. The process is just built that way.
What about leaseholders who don’t participate?
Not every qualifying leaseholder needs to participate. The minimum is 50%. Leaseholders who choose not to join the claim do not lose their flat or their lease. They continue as leaseholders of the new freehold company.
They can still apply for a statutory lease extension under section 42 of the 1993 Act after the enfranchisement completes, but on standard statutory terms: currently 90 years on top of the existing lease at a peppercorn rent, due to increase to 990 years once the relevant provisions of the 2024 Act are commenced. Participating leaseholders, by contrast, can grant themselves new long leases on whatever terms the freehold company agrees, typically 999 years at a peppercorn rent, and on more favourable cost terms because they are effectively granting the lease to themselves.
This is a useful point to share with reluctant neighbours. They are not being forced into anything, but if the claim goes ahead without them, they are not shareholders in the freehold company. They can ask to buy in afterwards, but the company does not have to agree, so the surest way to secure those benefits is to join the claim at the outset.
Should leaseholders be waiting for the reforms?
A question I am being asked more frequently is whether leaseholders should hold off on a claim while the Leasehold and Freehold Reform Act 2024 is implemented. The Act received Royal Assent in May 2024 and contains several changes that will benefit leaseholders pursuing collective enfranchisement. The non-residential floor area limit will rise from 25% to 50%, meaning more mixed-use buildings will qualify. Marriage value will be abolished. The cost regime under section 33 will be reversed so that each side generally bears its own costs.
The key word is “will”. As at the date of writing, the relevant provisions for collective enfranchisement have not yet been commenced. The right-to-manage equivalent of the 25% to 50% change was commenced in March 2025, but the enfranchisement version remains on the statute book unactivated. The government has indicated that secondary legislation for the valuation reforms is unlikely before late 2026, with full implementation potentially running into 2027 or 2028. A draft Commonhold and Leasehold Reform Bill was published in January 2026, which may bring further changes.
There is no single right answer on timing. For a building with several short leases, the abolition of marriage value could mean meaningful savings if leaseholders wait. For a mixed-use building with non-residential floor area between 25% and 50%, waiting may unlock eligibility that does not currently exist. For most buildings with longer leases and minimal commercial space, the savings from the reforms may not justify another 18 months of uncertainty.
The point I’d make is that this should be a conversation at the eligibility check stage, not after 6 months spent recruiting neighbours. A solicitor can advise on which reforms would affect a specific building and what the realistic timeline looks like, so leaseholders can make an informed decision rather than discovering mid-claim that the rules have changed.
Frequently asked questions about organising a collective enfranchisement claim
How many leaseholders are needed for collective enfranchisement?
At least 50% of qualifying tenants in the building must participate. A qualifying tenant is someone who holds a long lease (originally granted for more than 21 years). In a building with 20 qualifying tenants, at least 10 must join the claim. The building itself must also have at least two-thirds of its flats held by qualifying tenants.
How much does collective enfranchisement cost per flat?
The cost per flat depends on the premium (driven by remaining lease lengths, ground rents, and property values), the legal and valuation fees on both sides, and the freeholder’s reasonable costs under section 33 of the 1993 Act. A preliminary cost estimate from a solicitor and valuer will give the organiser concrete figures to share with neighbours.
How long does the collective enfranchisement process take?
From serving the section 13 notice to completing the freehold purchase, the process typically takes between 8 and 12 months. It can take longer if the freeholder is slow to respond or if the premium is disputed at the First-tier Tribunal.
What is a section 13 notice?
A section 13 notice is the formal initial notice served by participating leaseholders on the freeholder to begin a collective enfranchisement claim under the Leasehold Reform, Housing and Urban Development Act 1993. It must specify the proposed purchase price, identify the nominee purchaser company, and be signed by the required number of qualifying tenants.
Can leaseholders who do not participate still benefit?
Non-participating leaseholders keep their existing lease and their flat. After the enfranchisement completes, they can ask to buy into the freehold company, but this is not an automatic right. The company can decline to admit them and is not obliged to give a reason. If they are not admitted, their route to a longer lease is a statutory lease extension under the Act, on standard statutory terms, rather than the more favourable voluntary terms that participating leaseholders can grant themselves.
Getting started
For leaseholders considering collective enfranchisement, the first step is to confirm eligibility and understand what participation threshold applies. Brady Solicitors can carry out a preliminary check, advise on the likely costs, and help put together the information needed to approach neighbours with confidence.
