Sussex Lease Extensions Blog

Buy the Freehold: Choosing the Nominee Purchaser

So you and your fellow tenants have decided to apply to buy the freehold to your blocks of flats. You have checked you’re eligible and there are enough qualifying tenants to proceed with the purchase of the freehold. The next step is to choose the nominee purchaser, who has to be named in the formal notice but what does this mean?

What is a Nominee Purchaser?
A nominee purchaser will act as the main person and point of contact in the freehold purchase process and will be named as the purchaser in the Initial Notice served on the current freeholder. They will need to be named as early in the process as possible, and most definitely must be set up or agreed upon before proceedings commence. On completion of the purchase of the freehold they will be responsible for the management of the building. If purchasing the freehold of a block of flats with a block with fewer than three leaseholders, then they will not need to choose a nominee purchaser, but larger blocks with four or more leaseholders must ensure a nominee purchaser is chosen as early in the process as possible.

There are no legal stipulations stating what or who is the nominee purchaser, so leaseholders are free to decide how they set this up.

The nominee purchaser could be:  
  •  One of the leaseholders
  •  A corporate person
  •  A trust
  •  A company formed by the leaseholders

According to the Law of Property Act 1925 no more than four people can be listed as owners for one property. In the case of larger blocks applying to buy the freehold tenants in most cases prefer to form a corporate body, allowing multiple people to be involved with the process and future management of the building.

If you do decide to form a company seek professional guidance from a solicitor, managing agent or accountant, who will be able to advise tenants on establishing a company. Ensuring the Initial Notice and nominee purchaser are correctly set up will save both time and money. A specialist enfranchisement solicitor will be able to help set this up correctly in order to avoid the Initial Notice being rejected.

This entry was posted on Tuesday, May 28th, 2013 at 2:03 pm and is filed under Fresh News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.