The 1993 Act gives lessees of blocks of flats the right in certain circumstances to compulsorily purchase the freehold interest in their block / building on a collective basis. It contains formulae for the valuation procedure, which is supplemented by Tribunal and Upper Tribunal case evidence.

To qualify, the building must be self-contained and structurally detached.  This does not eliminate terraced properties, but does require vertical division and the ability for the property to be independently developed.

The further qualification criteria are that there must be at least two flats in the building and that at least two thirds of the flats must be held by qualifying lessees.  A qualifying lessee is one who holds a lease granted for an original term above 21 years.

The premium is typically made up of three main elements: the capitalised ground rent, the value of the reversion and marriage value.  However, in some cases, an allowance should be made for loss of development value to the freeholder.