I recently wrote about this issue in an article that appeared in Landlord and Buy to Let Magazine, see:
http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short
However, Section 5B is an issue that is worth considering, as this means that the freehold in your building will go to auction. You may (collectively) have the right of ‘first refusal’ against any successful bidder.
So, should you do anything about this?
The answer is, it depends. If the price is right then this may well be an ideal opportunity to buy out the freehold to your building, but to know this you may need valuation advice.
Secondly, the price will not be set until the auction and therefore, you may well need to attend to watch and see how the pricing is going. Generally you are better off not bidding, but if the property is sold in the room on the day then you will have the same right that any auction buyer will have – normally to complete the purchase within 28 days of the auction sale. It may be necessary to bid if the property will not reach its reserve.
Remember, this is a collective right and therefore a majority (more than 50%) of flat owners are needed. The next problem is that because you need to complete quickly at the end of the process, you will need all the funds in line before the auction date to be able to complete. You will not know the exact price until the sale room process is complete.
If you do want to go down this route, then the first step is to serve an acceptance notice (which needs more than 50%), there are then several other procedural steps to go through to protect your position. You will need a company (most likely) to be your purchase vehicle and there will be other notices to be served. In other words, you will definitely need professional assistance from a solicitor.
In practice, this route can be used successfully to buy your freehold, but it does require proper planning and preparation and may require one or more participants to ‘forward fund’ the exercise. If you would like to know more, or have a specific question, by all means do get in contact with me to discuss.
http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short