We have talked previously about long leaseholders purchasing their freehold.
PainSmith has recently assisted a substantial development of about 100 flats and various commercial units to purchase their freehold. The Freeholder of this development entered into liquidation. The Liquidators served notices under Section 5 of the Landlord and Tenant Act 1987 giving the residential leaseholders a right of first refusal. The development consisted of about 100 long residential leaseholders and various separately let commercial units.
Certain of the leaseholders approached PainSmith for advice and we were able to advise on their rights that provided not less than 50% of the residential leaseholders wanted to purchase they could do so at the price included in the notice. PainSmith assisted in the co-ordination of the leaseholders to bring on board more than the numbers required. This meant explaining the process and assisting in drafting documents for the leaseholders and then obtaining valuation advice to assist the participants in making the decision to proceed. Acceptance Notices were served within two months of the service of the notice and the form of contract was agreed with the Vendors. PainSmith assisted in dealing with an investor who was found to fund the premium payable in respect of the non-participant minority leaseholders so that those taking part did not have to fund this part of the premium.
The transaction completed allowing the residents who participated to have control of their destiny moving forward at a price they were advised was advantageous.
If therefore you or any of your clients in respect of leasehold property they own receive a Section 5 Notice from a freeholder indicating they are looking to sell their freehold interest we at PainSmith are experienced in:
- Advising on the Notice, its validity and steps to be taken,
- Assisting finding suitable valuation advice and if necessary finding investors to help fund the purchase.
- Co-ordinating all the various steps including payment of completion monies.
- Dealing with all of the formalities both prior to and post completion of the freehold.
If you have any queries or questions do not hesitate to contact a member of the long residential leasehold team who will be happy to discuss and assist