Criteria to be Met
The building is required to meet certain criteria in order to exercise the right which are that:
- The building must be self contained i.e. structurally detached from any other building and with a minimum of two flats;
- A maximum of 25% of internal floor space for non-residential use is required;
- It must not be a building within a cathedral precinct, a National Trust or Crown property.
- The part of the building to constitute a vertical division of the building;
- The structure of the building is such that the allegedly self-contained part could be developed independently of the rest of the building and;
- Either s72(3)(c) of the Commonhold and Leasehold Reform Act where the relevant services (by means of pipes, cables or other fixed installations) provided for the occupiers of the part are provided independently of the relevant services provided for the rest of the building or s72(4)(a) of the Act the relevant services could be so provided without involving the carrying out of works likely to result in a significant interruption in the provision of relevant services for occupiers of the rest of the building under s72(4)(b).
The criteria for leaseholders is that they:
- Own a lease that when granted had an unexpired term of at least 21 years;
- A lease with an unexpired term of less than 21 years but with a clause providing a right of perpetual renewal or;
- The communication of a long lease under the Local Government Housing Act 1989 following the expiry of the original term or;
- A shared ownership lease where the leaseholders share is 100%;
- The leaseholder owns a maximum of 2 flats in the building (although you can still qualify for a lease renewal).
- At least 50% of the leaseholders must take part, or 100% if the building consists of 2 flats only.
- At lease 2/3rds of all the flats in the building must be ‘qualifying tenancies’ (whether or not participating).
There are however certain exceptions where they will not qualify where they:
- Have a landlord who is a charitable housing trust and the flat is purchased as part of the charity’s functions;
- Own more than 2 flats in the building;
- Own a business or a commercial lease.
Leaseholders will then need to form a resident management company and agree a Nominee Purchaser before serving the Initial Notice on the freeholder. Whether leaseholders choose another leaseholder. a corporate individual, a Resident Management Company or a trust, the Nominee Purchaser will be a) responsible for conducting the later stages of the process and b) on completion will be the new landlord responsible for the management of the building.