collective enfranchisement
📖 O que é collective enfranchisement? Significado e conceito
Collective enfranchisement is a right exercised by leaseholders to acquire the freehold interest in their building, as established under the Leasehold Reform, Housing and Urban Development Act 1993. This process enables a group of tenants to take ownership of the land and common parts of their building, moving from leasehold to freehold ownership. The First-tier Tribunal (Property Chamber) often becomes involved when there is a dispute, particularly regarding the premium (price) to be paid for the freehold and any appurtenant property.
When leaseholders decide to pursue collective enfranchisement, they typically serve an Initial Notice to the freeholder, outlining their claim and proposing a premium. The freeholder then serves a Counter-Notice, either admitting the validity of the claim or disputing it, and often proposing a different premium. If the parties cannot agree on the premium or other terms of acquisition, an application is made to the Tribunal for a determination.
The Tribunal's role is to determine the fair price for the collective enfranchisement and to settle any other outstanding terms of the acquisition, such as the form of transfer. This ensures that the process is fair to both the leaseholders and the freeholder, with the Tribunal acting as an independent arbiter. The final decision by the Tribunal sets the terms, including the total collective enfranchisement price, which then allows the transfer of the freehold to proceed.
📋 Requisitos
- A claim must be made under the Leasehold Reform, Housing and Urban Development Act 1993.
- An Initial Notice of claim must be served by the applicant nominee purchaser.
- The freeholder must serve a Counter-Notice in response to the claim.
- Parties must agree on the form of transfer (e.g., Land Registry Form TR1), even if the price is disputed.
📝 Procedimento
- The applicant nominee purchaser serves a notice of claim under section 13 of the Act.
- The freeholder serves a counter-notice, admitting validity and proposing a premium.
- If no agreement on premium or terms, the applicant applies to the First-tier Tribunal for a determination.
- The Tribunal holds a hearing (often remote) to consider evidence and arguments.
- The Tribunal determines the premium and other terms of acquisition, such as the form of transfer.
💡 Exemplos
- A group of flat owners in a London building initiated a collective enfranchisement claim to purchase the freehold from their landlord, leading to a tribunal determination of the premium.
- Leaseholders of a property in Hove applied to the Tribunal to determine the terms, including the price, for the collective enfranchisement of their building's freehold after an initial notice and counter-notice were exchanged.
- A company representing leaseholders made an application to the First-tier Tribunal to resolve the premium to be paid for the collective enfranchisement of a residential property after the freeholder counter-proposed a higher price.
- The Tribunal approved a collective enfranchisement claim and determined the form of Transfer to be used for the acquisition of the freehold of a property.
📚 Base legal
- Leasehold Reform, Housing and Urban Development Act 1993
❓ Perguntas frequentes
What is the purpose of collective enfranchisement?
The purpose is to allow leaseholders to collectively purchase the freehold of their building, giving them greater control over the management and future of their property, as seen in cases brought under the Leasehold Reform, Housing and Urban Development Act 1993.
Who determines the price for collective enfranchisement if parties disagree?
If the leaseholders and the freeholder cannot agree on the premium to be paid, the First-tier Tribunal (Property Chamber) will determine the price and other terms of acquisition, as demonstrated in various tribunal decisions.
What is an 'Initial Notice' in this process?
An 'Initial Notice' is a formal document served by the applicant nominee purchaser to the freeholder, signifying their intention to exercise the right to collective enfranchisement and proposing a premium for the freehold.
What is a 'Counter-Notice'?
A 'Counter-Notice' is the freeholder's formal response to the Initial Notice. It typically admits or disputes the validity of the claim and proposes their own premium for the freehold and any associated land.
Can collective enfranchisement claims be heard remotely?
Yes, tribunal hearings for collective enfranchisement claims can be conducted remotely via video, especially if all parties agree and it is deemed practicable, as was the case during the Covid-19 pandemic.
What is the 'premium' in collective enfranchisement?
The 'premium' is the price that the leaseholders must pay to acquire the freehold of the property and any appurtenant land. This amount is often a point of dispute between the parties and may be determined by the Tribunal.