What does share of freehold mean?

clumsycloggs0305

Apologies if this question has been asked before...
We are buying a BTL share of freehold flat. Can anyone explain what this means. My understanding is that we own both the LH and FH part of the flat i.e 50% as the ground floor flat is owned by the other person. Our solicitors have not made this clear. If it was advertised as "share of freehold", can the current vendor retain the FH part of it still, and only sell us the LH? Any advice greatly appreciated, as we are very close the exchanging, though we so not fully understand the share of freehold part, thanks. What documents do we need the solicitor to draft up then?

Doozergirl

In the absence of any other posts, I’ll try and explain but I’m not 100%.

The freehold should be owned by a company which consists of the two current owners of the flats. When you purchase the flat, you will own a 50% share of the company that owns the freehold. The head lease (I think it’s called) is granted by that company to the two flats for a term of 999 years.

Apologies if I’ve got it wrong.

There would be no financial incentive to your vendor to keep the 50% share of freehold, in fact, the flat is worth more with share of freehold than it would be leasehold.

I have no idea what documents have to be drawn up but there will definitely be some! What you should ask your solicitor to do is explain to you exactly what share of freehold means, what it entails and how maintenance and insurances have been arranged between the two flats. Don’t put the phone down until they do – it’s stuff you really need to know and it’s what you’re paying them for.

trafalgar_2

[font=Arial, Helvetica, sans-serif]found this for you which is interesting,in short it will be fine unless you can't reach agreements with the holders of the other 50%,but as Doozergirl says make sure your solicitor makes everything clear and finds out how co-operative they will/won't be before you go ahead[/font]
[font=Arial, Helvetica, sans-serif][/font]
[font=Arial, Helvetica, sans-serif]http://www.whatmortgageonline.co.uk/Homebuyingguide/flat.htm[/font]
[font=Arial, Helvetica, sans-serif][/font]
[font=Arial, Helvetica, sans-serif]Freehold flats[/font]
[font=Arial, Helvetica, sans-serif]Some flats are sold with a share of the freehold for the building. There is still a lease for each flat but the residents grant the lease as a group and act as landlord. If you're buying a flat with a share of the freehold your solicitor still needs to review a copy of the lease but there may be room for negotiation with the other freeholders.[/font]

[font=Arial, Helvetica, sans-serif]There are a number of advantages to owning a share of the freehold. Freeholders can grant longer leases without having to pay a premium, they can get together and change any terms of the lease that cause problems, and they can decide between themselves on a fair service charge. [/font]

[font=Arial, Helvetica, sans-serif]However owning a share of the freehold can pose problems. Unless you employ a managing agent looking after the property could be time-consuming. And if your neighbours are uncooperative you may never be able to agree on what work needs doing.[/font]