Garden Lodge Court

The Backstory

Garden Lodge Court is a residential block made up of 1 and 2 bed apartments in East Finchley, North London. 

TFC became involved with Garden Lodge Court through a mutual contact who wanted information regarding a lease extension. Mike, our founder, advised that it may actually be better for the residents to purchase the freehold. However, the mutual contact felt such an acquisition would be “impossible” as the neighbours barely knew one another, and that it would probably be too expensive.

So, that’s where we stepped in.

The Problem

Garden Lodge Court had a number of stumbling blocks. Firstly, the leaseholders themselves did not know nor talk to one another, which made for a fragmented group of residents that, to non-professionals, would be difficult to form into a collective enfranchisement group.

There was also discontent between the leaseholders and the managing agent, which led to an atmosphere of distrust around the building.

And finally, just as we were laying the groundwork for a Collective Enfranchisement to take place, the freeholder served the group with a Section 5b notice – this meant they wanted to sell, but via an auction. A Section 5b process meant new complexities and challenges, and the risk of our leaseholders losing out.

Altogether there were a lot of moving parts to put together, but thankfully with our expertise, we had the tools to know exactly where to begin!

How TFC Won the Freehold

Everyone at The Freehold Collective is well-versed in the complexities of forming a collective freehold group. We understand how to address communication problems, plan, deal with the unforeseen, and keep everyone focused on the goal: obtaining their freehold as quickly as possible for the greatest value.

So with that in mind, we deployed our three step winning formula:

Galvanised and brought together residents

When we met the residents of Garden Lodge Court, the leaseholders did not know one another, did not talk, and were incredibly fragmented which led to them being wary of going in on any joint property purchase with each other. 

But with a Section 5b notice being served, we knew that we could not afford to lose time. So we worked quickly.

We galvanised and motivated residents by sending regular communications, holding focus groups, working one to one with leaseholders and gradually breaking down barriers of misunderstanding, apprehension and knowledge gaps.

It worked: Within a few weeks TFC had 10 out of 12 flats wanting to participate and a collective enfranchisement group in place. All from nothing!

After we’d settled the auction process, 10 flats grew to 11 as one of the flats that didn’t join in the first place wanted in. TFC helped to onboard the leaseholder and ensured they paid the fair share of costs to join the process.

This was an example of our innovative management because, although the leaseholder wasn’t able to be part of the collective group at the time due to a technicality, he was still a leaseholder in the block with as much of an interest as any other. TFC were able to find a way of allowing him to join in with the benefits of the freehold purchase afterwards, whilst also making the situation better for all other leaseholders. This is just part of our commitment to always aiding every individual leaseholder client in any way we can.

Oversaw the auction process 

Once the Section 5b notice had been served by the freeholder, the auction process began. 

The leaseholders received the right of first refusal, which they took, but there was no freehold value supplied as is the legislation with the alternative 5a process. So, we had an anxious wait for the auction to see whether the price came in at an appropriate value compared with the valuation report we’d commissioned.

If the price was fair, we could move forward with the Section 5b process. However, if it didn’t we were prepared to issue a Section 13 notice (the formal notice which triggers a compulsory purchase of the freehold).

Thankfully however, the auction price was in line with our expectations. This is potentially because, included in the listing was a notice that leaseholders had responded to the Section 5b notice, and were therefore put off from bidding. Without our assistance, it’s likely the freehold may have been sold for more in a bidding war.

Because TFC helped leaseholders reserve their position, they were granted the right of first refusal and able to buy the entire freehold at the auction price.

Strategically, this saved our leaseholders a vast amount of money and the cost of another freeholder coming in and redeveloping part of their block: it was revealed at the time that a developer was interested in the property and this could have spelled a disaster for the residents of Garden Lodge Court.

Corrected outdated leases to give residents more favourable terms

Finally, once the freehold had been acquired by the leaseholders we began to support them with TFCs Phase 3, the Ownership phase. Usually each leaseholder that purchases the freehold receives a simple 999 year lease extension with a peppercorn ground rent.

However, upon working through our residents’ leases we discovered that the leases were in different forms, and worst of all – some even contained errors.

But our service doesn’t just stop at helping leaseholders to acquire the freehold. We ensure that they are set up and supported as new freeholders, and provide help to them as they begin to familiarise themselves with what it means to own a building and its freehold. So, as part of that, we began a process to update ALL of the leases on favourable terms for leaseholders that were Council of Mortgage Lenders (CML) compliant. Better terms means more value in the flat. 

Had a new freeholder taken over the building, they would have walked into unthinkable levels of conflict and dispute because of the variation in leases – so this was a vital part of our service.

The Overall Garden Lodge Court Result

Overall, our work with Garden Lodge Court was a roaring success. What started from a simple lease extension turned into a successful freehold ownership acquisition that gave more benefits than the residents could have first imagined.

Not only were they able to win an auction process through a matching bid that was all but secured with our intervention of serving formal notices regarding intention to purchase the freehold, they also received modernised leases, standardised across the block, which added value to their properties.

That’s because at TFC we don’t just purchase the freehold. We also maximise investment and return to make the freehold easier to manage, reduce the chance of disputes, make things easier for mortgage lenders and help you maximise the value of your homes and assets.

Want to be our next success story? Don’t hesitate to get in touch – we’d be happy to help with everything from Right to Manage, collective enfranchisement, or even lease extensions.

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