Collective enfranchisement worthwhile? What if we don't?

[millgreen2]

Hi.

I own a two and a half year old flat in a block of 58 flats. Currently paying ground rent of £100 per annum. The landlords have offered us to buy out the freehold. The price is £98,600. The minimum number who have to agree is 29 of us and obviously if only 29 agreed the price would be £3400 plus legals plus any outstanding debt. As I say the apartment is a new block with little land. None suitable for building on. A standard pitch roof which already has the "penthouses" in it. At the moment there would appear to be 12 spare parking space but in fact 8 of these are allocated to the commericals on the ground floor but as these are still for sale they have not been lined up yet and are used by anyone. So in fact they will only be 4 parking spaces available eventually. The lease is 999 years starting 2004. The commericals are not included and will be given their freehold. The Ground Rent can only be raised every 10 years and only by the change in the retail price index. The management company won the right to self manage so they appoint a management agent to run our affairs

Tha advantage of buying is of course is no ground rent which would of course be a saving of far more than leaving the money in the bank.

1. If I buy would it be freehold or commonhold and would this affect my ability to get a mortgage?: This is already a problem due to lots of companies not liking the commericals on the ground floor.

2. If I don't buy have I anything to fear from a new landlord?

[jeffrey]

If the enfranchisement proceeds, the leaseholders should form a new company (limited by guarantee) as their vehicle.

1. The f/r purchase would not affect individual leasehold ownerships, although the leases might thereafter be re-written:
a. to increase term length to 999yrs; and
b. to reduce ground rent to a peppercorn.

2. New L often = new problems. Leases cannot be altered unilaterally, true, but new L will be buying only to make money out of the leaseholders. Some f/r investor companies are notorious (and many threads on LZ detail their obnoxiousness) so grab it while the going's good!

[Poppy]

If I don't buy have I anything to fear from a new landlord?
Possibly. There are some threads on this forum bemoaning inflated service charges and ineffectual management.

If you and a combination of the current lessees end up purchasing the freehold I hope that together you have the ability to properly run this block.

The price is £98,600. The minimum number who have to agree is 29 of us and obviously if only 29 agreed the price would be £3400 plus legals plus any outstanding debt.
Is this your first problem on becoming freeholder? If there are unpaid service charges, you will need to act as quickly and efficiently as possible to collect this.