The rights provided by the Leasehold Reform legislation present valuable opportunities for leaseholders, but the processes are complex and littered with potential obstacles, of which the most pertinent and significant are described here.

At least 50% Participation

Perhaps the most difficult obstacle to overcome in the pursuit of a freehold or headlease acquisition is the required participation of at least 50% of the qualifying leaseholders in the building (or, in the case of a building with only two flats, the participation of both leaseholders). Bluepoint Consulting can help to raise the awareness of the leaseholders in your building and to find ways to ensure that the minimum participation rate is achieved and maintained.

Financing for Non-Participant Flats

A freehold or headlease acquisition may involve anywhere from the minimum 50% of qualifying leaseholders to all 100%. Where there are non-participant flats, there will be a funding gap. Bluepoint Consulting will help the participants understand the implications of this and will present the most appropriate solutions to overcome it.

Organisation and Cohesion

Disorganisation and disunity are the greatest enemies of leaseholders attempting to collectively pursue a transaction, and can result in failure to act on an opportunity, accumulation of excessive costs, and in some cases the loss of the rights provided by the Leasehold Reform legislation. Research indicates that a third of failed collective enfranchisements have failed because the process took too long and lost the support of the participating leaseholders. Bluepoint Consulting is the bond that holds leaseholders together with clear communications and an effective route to the leaseholders’ objectives.

Cost

Acquiring the freehold of a block or extending a lease can in some circumstances be an expensive exercise. The price is partly derived from the length of the existing leases, and therefore any delay to taking action – thereby allowing the leases to shorten further – is likely to add to the cost and make this obstacle even greater.