What do you do first - Freehold Enfranchisement

[simsfan]

Hi all

First time poster here!

I live in a block of 7 flats and 6 of us have met to discuss buying the Freehold. I have read A Survivor's Guide to Buying a Freehold so I felt pretty comfortable that I knew the process.

One of the flats has spoken to a surveyor who they know personally. He won't do the survey himself but has advised them that we need to take the following steps:-

Set up formal Residents Association
Instruct solicitor and sign participation agreements/form RTE company
Carry out survey

Does this sound about right to those with practical knowledge??

Thanks in advance

Sarah

[jeffrey]

1. You don't need a formal Residents' Association.
2. Are six of the seven lessees in favour?
3. Instruct surveyor (to provide valuation of f/r) and solicitor (NOT someone who knows only about routine residential sale/purchase/mortgage procedures!)
4. Solicitor serves Notice of Claim on f/r owner, using s.13 of the Leasehold Reform Housing and Urban Development Act 1993. This has to propose a price and to be signed by all participating lessees.
5. Then, assuming that the Notice is accepted as valid, form a new company limited by guarantee. This will be the lessees' nominee purchaser.

[simsfan]

Thanks for replying!

Yes, 6 out of 7 of us are keen to go ahead. The remaining Lessee has not responded to any of the notices/letters that have gone around so we are assuming that he is not interested. As a last attempt (not to hound him but to make sure he doesn't miss out) I wrote to him personally and asked him to respond to me by next week.

If you don't mind, I have a couple more questions?

Should we have a joint bank account at this stage or should we wait till the new company is set up and just ask one person to hold the money for the survey (I assume most solicitors will accept the initial payment as individual cheques)? To me it seems a bit superfluous to set up an account in one name and then to have to do it again for the limited company?

Thanks again!

[jeffrey]

Should we have a joint bank account at this stage or should we wait till the new company is set up and just ask one person to hold the money for the survey (I assume most solicitors will accept the initial payment as individual cheques)? To me it seems a bit superfluous to set up an account in one name and then to have to do it again for the limited company?
No need for Bank account yet. Use solicitor to collect-in shares of enfranchisement costs.
Once purchase terms are agreed, set up new co. and open account then.

[simsfan]

Thank you sooo much!

Being a real pain but one more if that's ok?

Our building is in a real state of disrepair. When I moved in two years ago I was told that it was planned to decorate the communal areas in the next 6 months. That never happened. (BTW the Lease doesn't allow for collection of service charge, just for payment of works as and when they're carried out).

One of the Lessees is looking to sell (can we make it a binding part of the Participation Agreement that they will put a clause in the contract stipulating that the buyer join the Enfranchisement?) and is keen to make the place look nicer.

Asking the Freeholder to do anything is no good, we were due to pay ground rent and insurance last September and its only after everyone has nagged and we threatened to insure ourselves that we have been told that we will receive the demands next week! We are all willing to spend a few weekends removing the peeling wallpaper (yep, its that bad!), relining where necessary, rubbing down windowsills and repainting. We have a painter and decorator amongst the group!

However, do you (or anybody else) think that this would cause us problems?

Thanks again!

[jeffrey]

Once you have all collectively enfranchised, you will need to re-write each lease: not only so as to re-grant for extended term and at only peppercorn rent, but also to insert a proper service charge scheme (inc. L's duty to provide services [insurance, maintenance, improvements, etc.] and T's duty to pay service charge).