Share of Freehold - Reads just like a Leasehold

TheGnome_2

I am currently looking at a property in London. It is on as Share of Freehold, however included in the HIP is a copy of the Leasehold.
The landlord being a property developers, and the Lessee being two names (neither of which are the current vendors).
The lease is from 1992 and was 125 years from this date.

There is also a reference to annual rent of £100 per year from 24.06.1992 to 23.06.2017 increasing periodically thereafter, as well as endless information on what you can/can't do and the need to seek permissions from the landlord.

Is this not just a leasehold? I am doing as much research as I can to understand what is means and I will of course ask my solicitor. But is this soundinh normal for something which is 'share of freehold'?

:think:

---

Would be lost without the invaluable help of the Money Saving Expert Forum!!

penguine

It's possible it was originally leasehold and your vendors may have purchased a share of the freehold at a later date. Your solicitor will need to make more enquiries to find out.

boomerangs

TheGnome wrote: »

I am currently looking at a property in London. It is on as Share of Freehold, however included in the HIP is a copy of the Leasehold.
The landlord being a property developers, and the Lessee being two names (neither of which are the current vendors).
The lease is from 1992 and was 125 years from this date.

There is also a reference to annual rent of £100 per year from 24.06.1992 to 23.06.2017 increasing periodically thereafter, as well as endless information on what you can/can't do and the need to seek permissions from the landlord.

Is this not just a leasehold? I am doing as much research as I can to understand what is means and I will of course ask my solicitor. But is this soundinh normal for something which is 'share of freehold'?

:think:

---

Would be lost without the invaluable help of the Money Saving Expert Forum!!

Share of Freehold has an underlying leasehold.
With a share of the freehold you don't pay ground rent. And you don't have to pay to extend the underlying length of leasehold.

Fire_Fox

You will purchase the long lease and the share of freehold separately but simultaneously IYSWIM. If you combine the two documents the flats will become freehold which will mean you and the other residents have no joint responsibility to maintain and insure the property, and it will become virtually unmortgageable.

princeofpounds

Even in share of freehold there still exists a freehold/leasehold split. You don't erase the leaseholder/freeholder structure (it would be impossible to manage that way as the ownership of your flat would be co-mingled with the ownership of all the other flats), you just become a part-owner of the freehold in addition to being a leaseholder.

Richard_Webster

I am currently looking at a property in London. It is on as Share of Freehold, however included in the HIP is a copy of the Leasehold.
The landlord being a property developers, and the Lessee being two names (neither of which are the current vendors).
The lease is from 1992 and was 125 years from this date.

There is also a reference to annual rent of £100 per year from 24.06.1992 to 23.06.2017 increasing periodically thereafter, as well as endless information on what you can/can't do and the need to seek permissions from the landlord.

Is this not just a leasehold? I am doing as much research as I can to understand what is means and I will of course ask my solicitor. But is this soundinh normal for something which is 'share of freehold'?

Completely normal. Your mortgage lender will be lending on the security of the lease, which has the lions' share of the value, not the freehold. The other people who share it won't want your mortgage on something they jointly own with you, will they?

"Share of Freehold" as used by estate agents causes so much confusion. Generally, as has been said, you don't have an outside landlord who can rip you off with admin charges. You cannot guarantee that you won't have to pay for a lease extension. There is no law that says that. Normally everyone is in the same boat and they agree to help each for nothing beyond the legal costs of doing it, but they don't have to!

One reason you sometimes have a problem is the issue originally raised by OP and his own confusion. It only takes one of the co-freeholders when asked to sign to extend a lease to say he doesn't need to sign because "we don't have leases, we are shared freeholders..." and you have a problem - and believe me it has happened!

If you mention "freehold" in connection with the purchase of a flat some mortgage lenders assume it is a pure freehold flat where each flat has its own freehold and no leases. That situation is effectively unmortgageable. Although "shared freehold" is not the same, using the word "freehold" at all in connection with a mortgage application for a flat can cause confusion because mortgage brokers and staff in lenders' branch offices often don't understand and write the details down as if the flat was "freehold" leading to a mortgage rejection further down the track. A little knowledge is a dangerous thing.

VioletBaudelaire

As others have said, it is normal to still have a lease on "share of freehold" flats. I have one myself. When we owners bought the freehold between us (4 flats in a Victorian conversion) we extended the leases to 999 years.

Richard_Webster

As others have said, it is normal to still have a lease on "share of freehold" flats.

I don't know how any one would be able to buy a separate flat at all if there was no lease for it and the freehold was jointly owned - so it isn't just normal - it is necessary!