We would like to buy our freehold. Can we do so through collective enfranchisement? The problem is that the building only contains two flats and myself and my business partner are joint owners of both flats. By this I mean that myself and my business partner jointly own Flat A and myself and my business partner jointly own Flat B. The rules about what counts as a qualifying tenant are a little confusing – implying that a tenant that owns two or more flats in a building cannot be deemed to be a qualifying tenant. Some clarification would be appreciated.
Thank you for your enquiry. Where there are two flats in a building both flats must take part in the collective enfranchisement claim for it to be valid.
In respect of the qualifying tenant position – if one tenant (or if a company, an associated company) would be a qualifying tenant of three or more flats in the building whether or not by one or more leases and whether or not as a join tenant or a sub-tenant, then there is no qualifying tenant for any of these flats. Subject to tax and commercial considerations a determined tenant can overcome this barrier by transferring one or more of the offending flats to a friendly party. In this case, on the information you have provided, the exemption does not seem to apply in any case as there are only two flats in the building.
Hope that helps
Yashmin Mistry, Partner at JPC Law