You’ve taken the difficult first step in your plan to acquire your freehold by grouping together with your fellow leaseholders and serving the initial notice on your freeholder. What now? How long will the remainder of the collective enfranchisement process take, and when will you finally acquire the freehold?
Once you serve the initial notice on the freeholder, they have two months to reply with a counter notice stating whether or not they agree to your right to purchase the freehold and if they agree to the terms in the Initial Notice.
In straightforward scenarios, where the freeholder agrees your right to purchase the freehold, there are no legal issues in dispute and you can agree the premium fairly quickly, the usual timescale for completing the freehold purchase from this stage is between two and four months.
Often however there can be bumps along the way that will extend the timeframe. Analise Broomhall, Head of Enfranchisement at Brady Solicitors, explains below three other possible outcomes at Counter Notice stage, each of which has different implications for the time it will take for your collective enfranchisement to complete.
Outcome 1: The freeholder fails to serve a counter notice within the two-month period.
If the freeholder has not served a counter notice, you will need to make an application to court for an order that the freeholder proceeds with the sale but on the terms proposed in your initial notice.
You will still need to show that you served the initial notice properly and in accordance with the requirements but the potential advantage you have is that the freeholder cannot dispute the premium.
You have six months from the date that the counter notice was due, to apply to court. The court process can be less efficient in some parts of the country than others and this will have an impact of the timescales you can expect to reach completion of your purchase. Generally, matters that follow this route can take up to six months to completion.
Outcome 2: The freeholder serves a counter notice and disputes your right to acquire the freehold.
If the freeholder serves a counter notice disputing your right to the freehold, for example stating that either the leaseholders and/or the building do not qualify, the onus will be on you to apply to the court for a determination.
You must apply to court within two months of receiving the counter notice.
If the court is satisfied that the leaseholders are entitled to enfranchisement, it can declare that the freeholder’s counter notice has no effect and order the freeholder to serve a new counter notice. (There is an exception if the freeholder’s objections are based on redevelopment grounds.)
We usually find that the court procedure adds another three to four months to the usual timescale for completing a freehold purchase.
Outcome 3: The freeholder serves a counter notice and challenges the premium or legal terms.
The freeholder will often admit the right to acquire the freehold but will not agree to the premium proposed in the Initial Notice. Sometimes, the freeholder will also disagree with what other parts of the freehold you are entitled to acquire such as gardens or garages. Rights of way can also be an issue in more complex developments.
Once you receive a counter notice admitting your right, your surveyor will set to work trying to negotiate a premium with the freeholder’s surveyor. Equally your solicitors will work to agree any other terms such as rights of way or any legal issues that have been raised.
Provided the premium and other terms are agreed in good time, you can expect to complete the purchase within three to six months of receiving the counter notice.
If however, the parties cannot agree the premium and / or the legal issues, you will need to apply to the first-tier tribunal to have these issues determined. You may find that the tribunal process could add a further two to three months to the usual timescale for completing the purchase.
So, in summary, if all goes smoothly and the freeholder admits your right to buy the freehold and accepts the terms, you can expect to complete within two to six months of receiving the freeholder’s counter notice. In most cases though we would encourage you to allow longer than this, as you may need to overcome challenges raised in the counter notice.