Bridge Court

The Backstory

Bridge Court is a 24 flat residential building situated in a desirable location, beside the River Thames in Taplow, Buckinghamshire. 

Remarkably, Bridge Court was our founder, Mike Somekh’s, very first full time acquisition after his own building! It began after Mike’s audio-visual contractor happened to mention he had a flat in Taplow and knew of some issues with his leasehold property but none of the details and asked Mike if he could help.

Mike’s contact knew one leaseholder who asked him to meet at a local pub across the River, apologising in advance that he did not think there would be much interest from other leaseholders in the building. Mike put together a brief summary email in plain English and this did the trick. Although there are only 24 flats in the building, Mike entered the pub to be faced with a gathering of no less than 35 interested people!

The rest – as they say – is history!

The Problem

When Mike met with the 35 leaseholders in the Bridge Court building, he very soon realised that he was facing multiple problems.

The leaseholders were asking questions which Mike would later come to realise (after years of work at TFC!) were common questions that leaseholders generally don’t understand, or fully grasp the implications of. Each leaseholder had different circumstances, levels of understanding and thoughts on what should be done.

The building’s freeholder at the time was about to sell the freehold under a Section 5 process (a section 5 notice is served on qualifying leaseholders and gives them the opportunity to buy the freehold premium based on the terms set out in the Notice). However, the freehold’s premium was very high and whereas leaseholders have 2 months to respond to such a notice, the current group only had 3 or 4 weeks remaining due to lost time.

This was a mountain to climb: Not only did Mike need to explain the process, he needed to explain why they needed to do it, and the costs/implications of not doing it. He then needed to organise the group!

In addition, it was clear that the freeholder was making a claim for development value as part of the freehold premium because the building was situated on deregulated greenbelt land. This was stacked against the leaseholders because they were facing a huge, potentially additional, cost.

How TFC Won the Freehold

Despite this being Mike’s first external freehold acquisition process, he had the experience he needed from completing his very own freehold purchase at Barrie House. That meant that Mike was well equipped to know how to organise and strategise leaseholders, how to plan for the unexpected, and most importantly – how to navigate everyone through tenuous issues to keep them focused on the goal at hand: purchasing the freehold for the best value and on the best terms. Attributes which still serve him well today!

Inspired by the chance to help someone else, Mike was able to succeed by following his three stage process, that is identical to the one we still use today:

Organised leaseholders into an effective collective

Thanks to his initial meeting with the leaseholders, Mike was able to instil enough confidence into the group, by explaining key aspects of the freehold acquisition process, given his views of the status with Bridge Court and answering all questions. Not only did that lead them to want to consider purchasing the freehold, it also led them to the conclusion that they lacked sufficient knowledge in this complicated area of the law and that they would engage an experienced professional to guide them the rest of the way.

Once he had received the go ahead, Mike managed the entire project, organising leaseholders into an effective force with regular communication and newsletters, dealing with individual queries and circumstances, providing and updating the fee budget and acting as the point of contact for the solicitor and surveyor.

Ultimately, Mike succeeded in getting 22 of the 24 leaseholders on board. A great result.

Navigated leaseholders’ concerns regarding development

As part of the raised premium, one of the biggest challenges for Mike was safely navigating the situation with a potential developer.

One of the main things which persuaded unsure leaseholders to join the collective was knowing that a developer was waiting in the wings – which would devalue their flats considerably if the land was built upon. Not only that, but service charges and insurance prices would have skyrocketed because of a new freeholder and managing agent coming in and likely allowing development. 

However, the TFC groundwork and process which was put in place with the valuer gave leaseholders the correct preparation beforehand and placed them on incredibly strong footing when confronting the development issue. This was vital in protecting the costs position of  leaseholders and in helping them secure the freehold so that they could maintain their properties for a fair price, and not pay extortionate new service charges.

Negotiated the price of an inflated premium to make it affordable & accessible

The next hurdle Mike faced was lowering an inflated premium and addressing the terms of acquisition. A Section 5(a) process is essentially a take-it-or-leave-it offer by the Freeholder, giving leaseholders only 2 months to accept. However, leaseholders did not accept the premium or terms and legally had no way to challenge the offer.

Moreover, part way through the process, the Freeholder suddenly claimed to have had a massively increased offer for the property based on further development value. He threatened to withdraw and re-serve the Section 5(a) Notice with a massively increased premium.

The property has a very large garden which in theory could allow for the building of several flats on the River Thames. Hence, development value was a clear and present danger to the acquisition.

Mike was able to use contacts he had previously amassed from his acquisition at Barrie House, to call on a trusted solicitor and surveyor. This allowed the leaseholders at Bridge Court to benefit from lower professional fees because Mike streamlined much of the work.

Following a valuation and in light of the freeholder’s claim for development value, the price for the freehold was estimated, in the worst case scenario, to be over 200 times more than leaseholders were willing to pay. Moreover, the freeholder was suggesting that he would impose ‘overage’ on the property, meaning that should the leaseholder pay for the development value and go on to develop the property in future, he would take a cut of their profits.

Guided by Mike, the valuer was able to argue for no development value, resulting in a far lower premium and the solicitor was able to successfully fight against the notion of overage. Together with Mike, they presented a persuasive argument which referred to parts of planning law, nearby environmental research, comparables in the area and even flood reports.

This wealth of information along with the approach taken, that leaseholders were prepared to force the issue through the Tribunal, was sufficient to persuade the freeholder to drastically reduce the accepted premium and finally made it affordable for leaseholders to push forward with the sale.

Ultimately, Mike was able to secure the freehold for a fraction of what the freeholder was initially claiming, completely unencumbered by any restrictions.

Leaseholders were both relieved and delighted at the result.

The Overall Bridge Court Result

The result for Bridge Court was a monumental success for a plethora of reasons. For Mike, it was his first full time acquisition and was an incredible opportunity to benefit others the way that he had benefited fellow leaseholders in Barrie House.

What’s more, Bridge Court had been facing a precarious issue with potential development costs and paying a significant premium, but Mike was able to prevent this due to a great relationship with a valuer who he worked closely with to disprove the valuation costs.

For the residents, they were relieved and delighted to have to only pay a fraction of the potential cost of the freehold without any restrictions. They also found that, once they received a share of their freehold, they were able to take control of the management of their building and address service charges and ground rent to make both things more affordable for all. And to top it all off, owning a share of the freehold raised their flat prices too!

Want to experience the same success as the leaseholders at Bridge Court?

Since then, we’ve helped over 600 leaseholders take control of their buildings in just 12 years. We can help you take control of yours, too. Get in touch with us today for your free initial consultation.

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