© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Approaching the cost of your freehold purchase on the basis of a collective amount based on the number of flats in the building may give a fairly accurate figure where there is little additional land, such as flats in a converted terraced house. This is not always the case where the building sits in its own grounds.
The freeholder will often seek an additional amount for this area - “the bit on the side” - which could be quite substantial.
The 1993 Act gives qualifying flat owners the right to purchase the freehold of the building in which the flats are situated. They are likewise entitled to purchase say a garage or a parking space included in their lease and where they have exclusive use, sometimes this ownership is by way of separate long lease(s). Finally they are entitled to purchase the garden and grounds over which there are communal or shared rights in the flat leases. The problem lies with this third category where it can be shown there is an additional value which the enfranchising group benefit from having bought the freehold and which may not be apparent before the purchase.
Let’s take some examples. The most obvious one is where the garden and grounds over which there are shared amenity rights is somewhat larger than may be simply for the enjoyment of the flat owners. It may already have planning permission for additional similar residential development, or it may have hope value for this at some time in the future. In either case this will show a value higher than as amenity land. It will be part of your valuation surveyor’s duty to flag this possibility for you although a clue can often be seen in the “landlords retained rights” section of the leases.
The wording of leases is often helpful in indicating where there might be an additional bit on the side! For example, the effect of wording such as “rights of access on foot only” will disappear with the purchase of the freehold and in an area with limited on street parking the grant of vehicular rights with the freehold transfer is of additional value.
Another example concerns an amenity area, duly noted in the lease, but which over the years had become used by the flat owners to park cars. The lease did not prohibit parking but the Tribunal nevertheless valued this as such.
The moral is avoid the DIY valuation, get proper and experienced professional help; preferably an ALEP valuer - and tell them not to forget the bit on the side!
Roger Nelson FRICS, IRRV (Hons) is a Director of Each Side Leasehold