Collective Enfranchisement: Buying Your Freehold
Take ultimate control of your building by purchasing the freehold together with your neighbours
Last updated: January 2026
What is Collective Enfranchisement?
Collective enfranchisement is the legal right for leaseholders to join together and purchase the freehold of their building. It's governed by the Leasehold Reform, Housing and Urban Development Act 1993.
Unlike Right to Manage (which only gives you control of management), collective enfranchisement gives you actual ownership of the building and land. Once you own the freehold, you can:
- Extend everyone's leases to 999 years for minimal cost
- Eliminate ground rent completely
- Control all aspects of building management
- Potentially develop unused spaces (lofts, basements)
- Avoid escalating insurance commissions and management fees
Eligibility
To qualify for collective enfranchisement, your building must meet certain criteria:
At least two flats
The building must contain a minimum of two flats held by qualifying tenants.
50% participation
At least 50% of the qualifying tenants must participate in the claim (not 50% of all flats).
Two-thirds qualifying tenants
At least two-thirds of the total flats must be held by qualifying tenants (long leaseholders).
Commercial space limit (changing to 50%)
Currently no more than 25% commercial space. This is expected to increase to 50% under the 2024 reforms once further secondary legislation is passed. (Note: The 50% limit is already in force for Right to Manage as of March 2025.)
Important note
A "qualifying tenant" is someone with a long lease (originally granted for more than 21 years). Short-term tenants and those with business leases don't count towards the thresholds.
Benefits of Buying the Freehold
Long leases for free
Grant yourselves 999-year lease extensions at no premium - just legal costs.
No more ground rent
Eliminate ground rent immediately - no escalation clauses to worry about.
Full control
Choose your own managing agent, insurance provider, and contractors.
Property value increase
Share of freehold properties typically sell for more than leasehold equivalents.
Development potential
Develop unused spaces (subject to planning) and share the profits.
Easier sales
No delays waiting for landlord responses to enquiries during sales.
Costs
The total cost of collective enfranchisement includes:
1. The premium (purchase price)
This is the market value of the freehold, calculated based on the value of each flat, remaining lease lengths, ground rents, and any development value. The freeholder's interest is valued using a complex formula - you'll need a specialist surveyor.
2. Your legal and surveyor fees
Expect to pay £5,000 - £15,000+ for solicitors and valuation surveyors, depending on complexity. This is split between participating leaseholders.
3. Freeholder's reasonable costs
Under current law, you must pay the freeholder's reasonable legal and surveyor costs. The 2024 Act will remove this requirement once fully implemented. Typically £3,000 - £10,000.
4. Stamp Duty Land Tax
SDLT is payable on the purchase price if over the threshold. The rate depends on whether it's a residential or mixed-use purchase.
Dividing the cost
Costs are typically split based on the relative value of each flat or in proportion to service charge percentages. Leaseholders who don't participate don't pay but also don't become shareholders in the freehold company.
The Process
Collective enfranchisement follows a prescribed legal procedure:
Gauge interest and form a group
Identify interested leaseholders and confirm you have at least 50% of qualifying tenants on board.
Set up nominee purchaser company
Create a company limited by guarantee or shares to hold the freehold. Participating leaseholders become shareholders/members.
Commission valuations
Appoint a specialist surveyor to value the freehold. This determines your offer price.
Serve Section 13 notice
Your solicitor serves a formal notice on the freeholder (and any intermediate landlords) stating your intention to purchase and the price offered.
Freeholder's counter-notice (2 months)
The freeholder has 2 months to respond, either accepting, making a counter-offer, or disputing eligibility.
Negotiate or go to Tribunal
If you can't agree on price, either party can apply to the First-tier Tribunal (Property Chamber) to determine the premium.
Complete the purchase
Once terms are agreed, complete the purchase. The nominee company becomes the freeholder. Extend your leases and celebrate!
Timeline
The entire process typically takes 9-18 months, depending on complexity and whether disputes arise. Budget for 12+ months to be safe.
Common Challenges
Getting leaseholder agreement
The biggest challenge is reaching the 50% participation threshold. Some leaseholders may be absent landlords, disinterested, or unable to afford their share. Clear communication and flexible payment arrangements can help.
Valuation disputes
Freeholders often argue their interest is worth more than your surveyor suggests. Tribunal proceedings can add significant time and cost, though the 2024 reforms should make valuations more standardised.
Finding the freeholder
Some freeholders are offshore companies or have complex ownership structures. You may need to trace ownership through the Land Registry and potentially apply to court to proceed.
Financing individual contributions
Not all leaseholders can easily fund their share. Some banks offer enfranchisement loans, or you could structure the company so non-participating leaseholders can buy in later.
Post-purchase governance
Once you own the freehold, you need to manage the company properly - annual accounts, director responsibilities, and ongoing decisions. This requires organisation and cooperation.
How OpenCourtyard Helps
Collective enfranchisement requires exceptional coordination among leaseholders. OpenCourtyard is designed exactly for this:
Reach all leaseholders
Use our resident directory and messaging to contact every leaseholder in your building - including absent landlords through their registered addresses.
Gauge interest with polls
Before committing to professional fees, use our voting tools to survey interest and understand who's likely to participate.
Share documents securely
Keep all enfranchisement documents in one place - valuations, legal notices, company documents, and correspondence. Full audit trail for transparency.
Keep everyone informed
Post updates, answer questions, and maintain momentum throughout what can be a long process. Our forum keeps discussions organised and searchable.
Manage post-purchase
Once you own the freehold, continue using OpenCourtyard to manage your building - track issues, collect service charges discussions, and coordinate maintenance.
Further Resources
- LEASE - Collective Enfranchisement Guide
- GOV.UK - Buying Your Freehold
- Right to Manage Guide - A less expensive alternative if you just want management control
Important: This guide provides general information and is not legal advice. Laws and procedures change – always verify current rules with official sources and consider seeking professional advice for your specific situation.
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