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Freehold ownership or sharing freehold??

We are just about to buy a flat in a house that has been made into 3 flats. The owner of the flat we are buying owns the freehold as he owned the house originally he has offered us the freehold. I would like to know if this is a good or bad idea and what is involved in taking up this offer? My worry is that the basement flat underneath the one we are buying is prone to flooding and wonder whether if we own the freehold would we have to sort out the flooding, insurance etc? Would it be best just to split the freehold in 3, although both other flats are also for sale! Someone please help!

Comments

  • There are three possible scenarios here:

    1. Seller sells you freehold of whole building with the flat you will occupy. If he does that he has to offer the freehold to the existing lessees and the other two might decide to buy it. If they don't want it then you can buy it. Depending on the wording of the leases you may be involved in the admin if work needs doing to the basement flat but insofar as it isn't covered by insurance then the basement flat owners should pay - although this point needs checking in the lease.

    2. Seller transfers freehold to the three of you so you become shared freeholders - somebody still has to do the admin work on behalf of the three of you if, for instance, the basement gets flooded. The fact that the three of you together own the freehold doesn't change the wording of the leases each of you will have for your individual flats.

    3. Seller transfers the freehold of just your flat to you and possibly the freeholds of the other flats to their respective flat owners. This is a disaster and immediately makes all three flats unmortgageable and depresses their value by around 30%!

    Whether to go for 1 or 2 above will depend partly on the attitude of the other two lessees - they may not want to pay for a share in freehold. In some cases it is better for one person to be able to act decisively (and avoid people who prevaricate and can't make up their minds when faced with having to contribute to and be committed to a joint decision) and be in control so things get done. In other cases this could meet with resistance and it is better for the others to have a stake in the building so they feel committed to any decisions that are made jointly. To some extent it will depend on the personalities of the people involved.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
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