Freehold Purchase

You have a right to buy your freehold under legislation, if you meet some minimum criteria. These criteria and the procedure to follow, including how your freehold is formally valued, are set out in the Leasehold Reform Act 1967.

You can only purchase your freehold if your property is a house.

• Formal negotiations require you to obtain independent legal and, usually, valuation advice.
• Informal negotiations means you deal directly with the freeholder, without following the procedures set out under the Leasehold Reform Act 1967.

You can choose to enter either formal or informal negotiations.

The Leasehold Reform Act 1967 is a detailed piece of legislation that introduced rights for leaseholders of houses to buy their freehold, among other things. It sets out a procedure to be followed by both leaseholders and freeholders.

In relation to buying your freehold, the 1967 Act includes:

1. Minimum criteria leaseholders must meet to buy the freehold (for example, have you owned your house for two or more years?);
2. The information you need to give your freeholder to claim your right to buy the freehold, and how this must be done;
3. How long the freeholder is allowed before replying to your claim and what information they must give you;
4. How the price of the freehold should be calculated. If the leaseholder and freeholder can’t agree, it gives a right to ask a specialist property tribunal to make a legally binding decision. Either party can also ask the property tribunal to decide on other disagreements, such as the minimum qualifying criteria or how much the freeholder’s reasonable costs should be (see 6);
5. How the process of recording your ownership of the freehold should be done once all issues are decided;
6. A condition that the leaseholder must pay the freeholder’s reasonable costs (for example, for the work done by the freeholder’s solicitor and valuer), as well as their own costs of going through this process.

Unfortunately, the landlord is not in a position to offer the freehold to individual leasehold flat owners on an informal basis.

However, this does not affect your statutory right under the act to seek purchase of the freehold should at least 50% of the leaseholders in the block wish to do so. Please note that you will need to seek independent legal advice should you wish to proceed this way.

The landlord clients of Homeground Management Limited are willing to enter into informal negotiations with their leaseholders.

You can apply for informal negotiations and pay the administration fee through your personal account on the HomeGround portal. To access your HomeGround account, please sign in. If you need help with your password, please click here.

If you have yet to register on our portal, you will need your alphanumeric security key and your 12-digit customer reference number. These can be found on HomeGround invoices or the welcome letter we sent. 

Once an application has been received and the administration fee has been paid, within 3–5 working days Homeground will send you the price at which the freeholder would be willing to sell the freehold. This offer price is always inclusive of the freeholder’s fees and expenses and VAT (if applicable), in other words, there are no hidden extras.

Once you have received this offer price, you can:

1. Accept it
2. Make a counter-offer if you think the landlord’s offer price is too high – further counter-offers may be made until an agreement is reached.

Once agreement is reached between you and the freeholder then HomeGround will instruct the freeholder’s solicitors to formalise the matter. We may then need the contact details for your solicitor. While our clients do not require a leaseholder to appoint their own solicitor in order to complete the conveyancing stage of the transaction, if you have a mortgage, your mortgage provider may require you to appoint your own solicitor. We recommend that you contact your mortgage provider to check.

If you and the freeholder are unable to agree a price then you still have the right to buy your freehold by way of formal negotiations.

This fee covers the costs of obtaining a landlord offer price. If an agreement is reached on an informal basis, it will be deducted from the price upon completion of the transaction. It is not refundable if an agreement is not reached.

HomeGround undertakes various services on behalf of your freeholder, including:

1. Checking the terms of your lease for length and the level of ground rent payable;
2. Checking whether you meet the qualification requirements under the legislation (for example, has your property been registered to you for at least two years?);
3. Checking whether your account is in breach or in arrears;
4. Referring to recent case law, where required;
5. Obtaining a landlord offer price and preparing an offer letter setting out the price, inclusive of the landlord’s legal and administrative costs for dealing with the sale;
6. Assessing any counter-offers received from you and dealing with subsequent negotiations on behalf of the landlord.

You will receive an offer letter stating the terms under which the landlord is prepared to sell their freehold interest to you.

The offer figure reflects the value that the landlord places on their interest in the property at the time of your application and it includes:

• the price the landlord is prepared to accept outside the formal statutory process (as governed by the 1967 Act)
• the landlord’s legal and administrative costs for completing the sale.

The offer will be valid for acceptance for 90 days.

HomeGround and the landlord are only able to negotiate with the current owner of the property.

The landlord’s offer sets out the price the freeholder is willing to sell the freehold title relating to your leasehold interest for. It represents the long-term value the freeholder attributes to their freehold interest.

Since HomeGround do not represent former owners of the freehold title, we will not have been privy to any previous discussions you may have had during that period of ownership.

However, we would like to emphasise that offer figures issued on behalf of our clients are negotiable and if you feel that a previous offer was more representative of the value of the freehold you have the option of taking independent advice and of putting forward a counter-offer, which will receive due consideration.