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Buying the freehold – procedure and cost

This content applies to England & Wales

Procedures and costs involved in buying the freehold of a house.

Procedure

To buy the freehold of a house, the leaseholder must serve a notice in a prescribed form[1] on the freeholder of her/his desire to purchase. This places a contractual obligation on the freeholder to sell it to her/him.[2] The freeholder must reply by serving a notice within two months stating whether s/he accepts the leaseholder's right and, if not, the grounds for objection. The leaseholder can withdraw from the right if the price is not agreeable and must do so within one month of the price being set but will not be able to apply again for 12 months.[3] The leaseholder will still be liable for the freeholder's costs and may be liable to pay compensation to the freeholder if the claim has affected her/his power to dispose of the premises or any neighbouring premises.[4] 

In practice, it will usually be necessary to employ a solicitor or licensed conveyancer in order to complete the procedure. 

Cost

The cost of buying the lease will vary depending on whether or not it has already been extended, how long it has left to run and the market value of the property with the leaseholder in residence.[5]  Valuations can be obtained from a qualified surveyor. If there is a failure to agree a price, then the price can be fixed by the First-tier Tribunal (Property Chamber).[6] 

The legal costs of both sides of using a solicitor or conveyancer will be payable by the leaseholder.

[1] Leasehold Reform (Notices) (Amendment) (England) Regulations 2002 SI 2002/1715 in England, and Leasehold Reform (Notices) (Amendment) (Wales) Regulations 2002 SI 2002/3187 in Wales.

[2] ss.5 and 8 Leasehold Reform Act 1967.

[3] ss.9(3)(b) and 23(2)(b) Leasehold Reform Act 1967 as amended by s.139(3) Commonhold and Leasehold Reform Act 2002.

[4] s.9(3) and (4) Leasehold Reform Act 1967.

[5] s.9(1)(1A) and (1AA) Leasehold Reform Act 1967, as amended by s.136 Housing and Planning Act 2016; Re Clarise Properties Ltd [2012] UKUT 4 (LC).

[6] s.21(1) Leasehold Reform Act 1967, as amended.

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