The process of acting as a group of leaseholders to acquire the freehold of a block of flats.
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Collective enfranchisement as a group of flat owners in 2025
In England and Wales, property ownership is primarily categorised into two types: freehold and leasehold.
Each parcel of land has a freeholder, the individual or entity that owns the land and any buildings on it. For simplicity, in this guide, the freeholder will often be referred to as the landlord. Understanding these forms of ownership is crucial, particularly when considering opportunities such as collective enfranchisement, where leaseholders unite to purchase the freehold of their building.
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Understanding Freehold vs. Leasehold Ownership
A freehold is the outright ownership of a property and the land it stands on for an unlimited duration. Freeholders have full control over their property, including its use and maintenance, subject to legal constraints such as planning permissions and local regulations.
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Owning the freehold of a property eliminates ongoing costs such as ground rent or service charges often associated with leasehold ownership. However, being a freeholder also brings responsibilities, such as managing the upkeep of the building, especially if multiple units share common areas.
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Most flats in England and Wales are owned on a leasehold basis. As a leaseholder, you own the right to occupy and use your flat for a set period, referred to as the term of the lease. Leasehold agreements are legally binding contracts between the landlord (freeholder) and the leaseholder, setting out the rights and obligations of both parties.
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Leasehold ownership can involve additional costs, including ground rent, service charges, contributions to the building's maintenance and fees for things such as subletting and notifying the freeholder. As the lease term shortens, the property’s value may decrease, creating challenges for resale or remortgaging.
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What Is Collective Enfranchisement?
Collective enfranchisement is a statutory right allowing leaseholders to join forces and purchase the freehold of their building. This process, governed by the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993), offers leaseholders greater control over the management and future of their property. However, both the building and the leaseholders must meet specific legal criteria to qualify.
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Benefits of Buying the Freehold Through Collective Enfranchisement
Participating in collective enfranchisement offers numerous advantages for leaseholders:
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Control Over Management
Owning the freehold empowers leaseholders to manage their building collectively. They can decide when to carry out repairs, what improvements to prioritise, and how much to budget for these activities. -
Longer Leases
Freehold ownership allows leaseholders to grant themselves new 999-year leases leases, often increasing the market value of their flats. This is especially beneficial for flats with leases nearing or below the critical 80-year threshold or those flats with an aggressive ground rent. -
Cost Savings and Autonomy
By purchasing the freehold, leaseholders eliminate ground rent obligations and gain freedom from potentially exploitative management practices by third-party landlords.
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Challenges of Freehold Ownership and Building Management
While freehold ownership provides autonomy, it also comes with responsibilities, including responsibilities as directors of the management company, such as those set out in this Government advice note. Leaseholders who become freeholders must manage the property, adhere to health and safety regulations, and ensure proper maintenance. Disputes may arise among participants, particularly when prioritizing repairs or improvements.
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Eligibility for Collective Enfranchisement
Not all buildings qualify for collective enfranchisement. Specific conditions must be met:
Building Criteria
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The building must be self-contained, meaning it cannot overlap or depend structurally on another building, for example there cannot be an underground car park that spans over the building to be enfranchised.
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Commercial spaces, such as shops, must not exceed 25% of the building’s internal floor area. This can be an issue in the case of a terraced block with a ground floor shop, and a surveyors input may be needed to ascertain the floor space calculations.
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At least two flats must be held by qualifying tenants, and at least two-thirds of all flats must have qualifying tenants.
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Who Is a Qualifying Tenant?
A qualifying tenant holds a residential lease. Most residential leaseholders meet this criterion, but there are exceptions. For example, if a single entity owns three or more flats in the same building, they are not considered qualifying tenants for any of those flats.
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Joint ownership also affects eligibility. In such cases, all joint owners collectively count as one qualifying tenant.
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Do All Tenants Need to Participate?
In short, no. However, participation in collective enfranchisement requires a minimum number of qualifying tenants. For instance:
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In a building with 10 flats, at least 7 must be owned by qualifying tenants.
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At least 5 qualifying tenants must join the enfranchisement claim.
In smaller buildings with only two flats, both tenants must participate. Additional tenants may join later, but only with unanimous consent from the existing participants.
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Note this is unlike the RTM Process, under which a leaseholder has the right to join the RTM Company.
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Steps to Make a Collective Enfranchisement Claim
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Serving the Initial Notice
The process begins with the participants serving a formal notice on the landlord. This document must include:-
Proof of eligibility.
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Details of the building and any additional property included in the claim.
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The proposed purchase price and a deadline for the landlord’s response.
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Landlord’s Response
The landlord may request evidence of the tenants’ eligibility, inspect the property, or propose a counteroffer. -
Negotiations and Valuation
The proposed purchase price is often subject to negotiation. Valuation considers factors such as lease length, ground rent, and property value. Disputes may require resolution through a tribunal. -
Conveyancing of the freehold and registration at the Land Registry
Once terms are agreed upon, the parties exchange contracts, setting a completion date for transferring the freehold. Completion then takes place and your lawyer will register the transaction at the Land Registry, providing you with a a copy of the updated freehold title once registration completes.
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Costs of Collective Enfranchisement
Participants must budget for:
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The purchase price of the freehold, determined by a complex valuation formula, to be clarified by your valuation surveyor before the s.13 notice is served
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Legal and surveyor fees for both parties.
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Any service charge or ground rent arrears outstanding at the date of completion.
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A participation agreement is essential to allocate costs among participants fairly. Typically costs will be shared equally but the premium will be split between participants based on the reversionary value of each flat.
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Timelines for Collective Enfranchisement
Completing a collective enfranchisement claim can take over a year, especially if negotiations are protracted. Deadlines apply at various stages, and failure to meet them may result in the claim being withdraw, with liability for the freeholders costs up to withdrawal. It is essential to have a leasehold specialist monitoring these dates on the groups behalf.
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Alternative Options for Leaseholders
For those unable to pursue collective enfranchisement, other options include:
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Right to Manage (RTM): Allows leaseholders to take over building management without purchasing the freehold.
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Tribunal Appointed Manager: Applicable in cases of landlord default and serious mismanagement or breach of covenant by the landlord.
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Future Changes to Collective Enfranchisement Law
The government has proposed reforms to make collective enfranchisement simpler and more affordable. However, implementation timelines remain unclear. Leaseholders should consider current opportunities while staying informed about potential changes.
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Next Steps for Leaseholders
Before initiating a collective enfranchisement claim, leaseholders should:
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Engage with qualifying tenants to gauge interest.
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Obtain a valuation from a specialist surveyor.
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Appoint experienced legal representation.
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Decide on the nominee purchaser, often a company representing the participants.
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Taking these steps ensures a well-organised and efficient claim process.
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By securing the freehold through collective enfranchisement, leaseholders gain control over their property’s future. While the process involves complexities and costs, the long-term benefits make it a worthwhile investment for many. it is often far cheaper than individually extending flat leases due to the shared costs under the enfranchisement route.

Collective enfranchisement:
A Comprehensive Guide
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What is marriage value?Lease extension premiums are made up of several components. When the lease term drops below 80 years, marriage value becomes payable. Marriage value is not payable for any lease over 80 years. Marriage value should be avoided if possible, as it will form the majority of the sum payable to the the freeholder to extend the lease. It is also something can can be more complex for your valuation surveyor to negotiate and hence, it can delay the process of reaching agreement on the price of your new lease.
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What is a s.42 notice?A section 42 notice is a claim notice served on your freeholder which fixes the valuation date and starts the clock ticking on the 2 months for your landlord to serve a section 45 counter notice. It is only relevant to the formal or statutory lease extension procedure. Note that an experienced solicitor will be extremely careful with service of the notice. As freeholders will often deny receipt of raise technical arguments in order to disrupt the process and leverage a higher premium. Provide your solicitor with a copy service charge demand wherever possible, so they have the best change of getting service right at the first attempt.
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Do I have to pay my freeholders cost of the lease extension?Yes. Under the Leasehold Reform, Housing and Urban Development Act 1993, the landlords reasonable legal and valuation costs are payable by the leaseholder. On the informal route, the freeholders solicitor will usually require a solicitors undertaking for costs before providing the draft lease extension deed.
Guidance notes
Explore our comprehensive guides on leasehold law issues, offering clear, practical advice to help you navigate lease extensions, enfranchisement, and landlord-tenant rights.

Lease Extensions
The lease extension process explained in plain English

Right to Manage
Taking over management of your block of flats without purchasing the freehold

Collective Enfranchisement
Purchasing the freehold of your apartment block, the procedure and common issues

Licence to Alter
Carrying out works to a leasehold property with proper consent in place

Tenants Right of First Refusal
Section 5 notices and how to respond to them in order to buy the freehold of your building
Transferring control of management to a professional manager by Tribunal Order