subject: The Benefits of Collective Enfranchisement [print this page] The Benefits of Collective Enfranchisement
If you're studying the issue of collective enfranchisement and wondering if it might be a good idea to join together with other tenants in your block of flats to purchase the freehold, it can at first seem a little complicated and daunting. Despite this, there are many benefits associated with being a freeholder and it can be a good long-term strategy for any tenant with a long lease. We take you through some of the top reasons for considering purchasing a freehold through collective enfranchisement.Firstly, it enables you to utilise your building fully. By joining together with your fellow tenants to buy the freehold, you will gain control of the building. This allows you to decide upon what your aims are and then use these in real life. Having an idea of why you want to go ahead with freehold purchase is an excellent thing to back up your application.Secondly, enfranchisement can offer many financial incentives. If you manage to purchase the freehold interest then it is likely that the valuation on your property will increase immediately. It will normally help increase the building's valuation, even to more than the cost of the freehold purchase, which makes it a good buy.Thirdly, tied in with this, being in charge of the building will also mean that you can save unecessary or excessive costs whilst living their. This is particularly true of insurance and maintenance. This is also due to the fact that tenant-owned buldings are run with the main aim of getting better deals for tenants. Also, as a participant in the collective enfranchisement, once the purchase goes through you will no longer have to pay any ground rent as you will be an owner, not a leaseholder.Fourthly, buying the freehold means that the management for the building will pass to those tenants who joined together to purchase it. It will give you a larger amount of control over the maintenance of the building and what is done to it.Lastly, as tenants will get together and created a limited by shares company, this company will then buy the freehold on all of their behalfs, it can then grant them all with a 999 year lease. This means not only does collective enfranchisement increase the valuation on the property, but it also help tenants feel more secure in their home, especially those with short leases.
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