Purchasing Freefold of house, but ground floor owned by leaseholder..survey help pls!

fruitful8

Hi Peeps

I'm sure the title doesn't make too much sense, so i'll clarify!

I'm in the process of purchasing a freehold property, a first floor flat in a semi detached house. The purchase includes the freehold of the whole house (ie ground and first floor), but the ground floor is leasehold owned by the occupier.

My question is: should my building survey cover the whole property, including the ground floor?

Any advice much appreciated!

Thanks!

Fire_Fox

Do you mean you are purchasing a leasehold flat (first floor) AND the freehold of the entire building, which is presumably on a separate title? It would be very unusual for one flat to be freehold and the other leasehold in one building.

If you are purchasing the freehold then, yes, you will need a full structural survey of the entire building. Do you understand the rights and responsibilities of becoming a freeholder? There is a LOT of legislation to get your head around.
http://www.lease-advice.org/publications/

fruitful8

:O
Suitably mortified, thank u for the heads up Fire Fox!

Is it weird that my property would be freehold and the ground floor has a lease off this freehold?

Fire_Fox

fruitful8 wrote: »

:O
Suitably mortified, thank u for the heads up Fire Fox!

Is it weird that my property would be freehold and the ground floor has a lease off this freehold?

Are you 100% confident that the upstairs flat is freehold? I honestly think you have the wrong end of the stick, it's leasehold but you will also own the freehold for the entire building. Freehold flats are notoriously challenging to mortgage, hence why they are often set up as 'share of freehold' which is not the same as freehold. In your case I think you are being offered two separate titles for a simultaneous purchase - one a long lease and the other a freehold - so you will effectively be your own tenant.

fruitful8

You are probably right, as i've got a mortgage and the bank's not complained about the freehold set-up.

I suppose the main thing really now is realising the responsibility of being the freeholder. Can i offer the freehold to the ground floor owner?!!

brixham

My place has exactly the same set up.
Original owner split the house in two and created a lease for the downstairs and carried on living in the top floor without a lease.
Years down the line it was sold to me as a freehold flat. It was explained to me at the time that the "top flat " owns the freehold (rather than me) and I would have to create a lease for my place to separate the freehold.
Only problem I had was that fewer companies were willing to lend on it but by no means impossable.
Check out what the lease says for downstairs as mine makes it very clear all work carried out on the structure of the building has to be agreed by both parties and costs split equally. This leaves me no responsiblities as a freeholder.
Oh and twice a year I have to collect the ground rent of £1.
The up side is that in 990 odd years time downstairs will be MINE !

fruitful8

Thanks Brixham!
So it looks like i will have to create a leasehold from my own freehold - how nonsensical, eh!
Yes i def prefer the set up whereby we both agree the works and split the costs, have to check the lease.
It does seem somehow preferable for the ground floor to own their share of freehold, though. I can't really see ay benefit of me owning it all?!
Thanks all for the input, very much appreciated.

Fire_Fox

fruitful8 wrote: »

You are probably right, as i've got a mortgage and the bank's not complained about the freehold set-up.

I suppose the main thing really now is realising the responsibility of being the freeholder. Can i offer the freehold to the ground floor owner?!!

You can sell the freehold if you want someone else to decide when the entire roof structure needs replacing (at half cost to you, never mind if you have just been made redundant). :rotfl: Once you have a full structural survey in your hand you will know exactly what works do and do not need completing in the next few years and you can start the consultation process. Your building is essentially a house, so it won't need any more insuring or any more maintenance than any other house.

It will be a PITA getting your head around the rights and responsibilities of being a landlord but, speaking from experience, it's just as much of a PITA doing the same thing from the other side! I am a a leaseholder who has been involved in a three year dispute with a useless management company, you could end up in the same boat if downstairs don't pull their weight after buying the freehold.

blckbrd

Do a property search on Land Registry. Without parting with any money you can find out tenure information.

https://www.landregistry.gov.uk/www/wps/portal/!ut/p/c1/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gfN1MTQwt381BD_2A3A08LT2cL49AwIwN_Y6B8JG55dyNKdBsYEqPbAAdwNCCgOxzkV_xuxycPch1IHo_9wal5-n4e-bmp-pH6UeYIkwLcPFxAJnk6BriZGRs4memH6BfkhoZGGGQGpEc6KgIAHx27iQ!!/dl2/d1/L0lDU0lKSmdvS1VRb0tVUSEvb0NvZ0FFSVFoakVDVUpSbUVBSUFuQmNFemdBIS9ZQTQ1NDUwLTVGMHN0eWowc3J5bndBISEvN19MRjU0MThHN1VQRkhEMEk4SUlBUEY2MzBCNi9XcF9fXzc2L3NwZl9BY3Rpb25OYW1lL3NwZl9BY3Rpb25MaXN0ZW5lci9zcGZfc3RydXRzQWN0aW9uLyEyZmluaXQuZG8!#7_LF5418G7UPFHD0I8IIAPF630B6

DocProc

It is quite usual for the registered owner of the leasehold of a top floor leasehold flat (eg, "only the first floor is included in the title") of a maisonette to be the registered owner of the title of the freehold of the lower ground floor flat (eg, "only the ground floor is included in the title").

and vice-versa:

The registered owner of the leasehold of the ground floor leasehold flat of a maisonette to be the registered owner of the title of the freehold of the first floor flat.

and not only that:

There will usually be a restrictive covenant stipulating that the leasehold of one flat must be transferred to the new registered owner at the same time as the freehold of the other flat is transferred.

This is called a 'cross-over arrangement'.

The conveyancer will need to sign to say that the restrictive covenant has been complied with and will do so on a special form to the mortgagee so that the mortgage funds can be released to the vendor's solicitor.

All of this prevents there being a defective title, by ensuring the restriction has been complied with.

Of course, if a property has a defective title then a look at the title deeds (as they are) will reveal any defect in the title (eg, by non-compliance with any restrriction, for instance) and if there is a defect thereby prevent the property from being sold (purchased).

DocProc

It would not be usual for the registered owner of the title of a leasehold flat to also own the freehold title to the same flat.

In fact, it doesn't even sound right, does it?