Advice on leasehold

trelawney75

Hi All

Hope I am in the right place. I am looking for advice on behald of my mil. She currently lives in a first floor masionette. She purchased it leasehold. About 3 years ago, the masionette below (also leasehold at the time) was bought and the young man who bought it also purchased the freehold on the property. Now I don't know that much about these things but I assume that means he now holds the freehold on mils place aswell. At the time he offered her a £5k deal on what we thought was the freehold to her property. However, I am not sure if this is possible. Maybe it was £5k to share the freehold.

Anyway, I am looking for someone in the know to help me out - can you own the freehold on a first floor masionette? Any other advice on this situation greatly appreciated.

thanks
Charlotte

G_M

It is very rare, and problematic, for a masionette to be freehold. If each masionette were freehold, how would repairs to the structure be arranged?

Much more likely she was offered a share of the freehold. Had she bought it, each owner would have had a lease on their respective masionetts, and each would have owned half the freehold. The freeholders would then have a legal framework for deciding on repairs and allocating costs for the building as a whole.

Richard_Webster

I assume that there are only two flats/maisonettes concerned here and there is no second floor maisonette/flat.

Not much she can do now as the freeholder has no particular reason to share the freehold with your mil. As GM has said you don't buy the freehold of your flat separately (good way of spending money to devalue your flat by making it unmortgageable!) so it is almost certain the other flat owner owns the freehold of the building as a whole.

If he ever sells the freehold he is supposed to offer it to the lessees so they can buy it between them, but to force him to sell a majority of the lessees have to agree and as he is 50% of the lessees he won't agree so your mil can never have a majority.

GDB2222

He may of course still be happy to sell a half-share in the freehold to your MIL. She can but ask. The price may have changed ofc.

timmyt

trelawney75 wrote: »

Hi All

Hope I am in the right place. I am looking for advice on behald of my mil. She currently lives in a first floor masionette. She purchased it leasehold. About 3 years ago, the masionette below (also leasehold at the time) was bought and the young man who bought it also purchased the freehold on the property. Now I don't know that much about these things but I assume that means he now holds the freehold on mils place aswell. At the time he offered her a £5k deal on what we thought was the freehold to her property. However, I am not sure if this is possible. Maybe it was £5k to share the freehold.

Anyway, I am looking for someone in the know to help me out - can you own the freehold on a first floor masionette? Any other advice on this situation greatly appreciated.

thanks
Charlotte

you haven't really told us your question about mil. does she want the freehold of her maisonette or at least buy into a share of the overall freehold of the building?

every lease has a freeholder. who was mil's landlord when she bought, as they were the freeholder. they then sold it and their remaining flat to one person. not sure if that might not be a breach of the right of first refusal legislation for mil to have also been offered it....anyway, she wasn't.

you often see cross freehold, where one mainsonette owns the freehold of the other one, or you both own the freehold jointly.

Fire_Fox

trelawney75 wrote: »

Hi All

Hope I am in the right place. I am looking for advice on behald of my mil. She currently lives in a first floor masionette. She purchased it leasehold. About 3 years ago, the masionette below (also leasehold at the time) was bought and the young man who bought it also purchased the freehold on the property. Now I don't know that much about these things but I assume that means he now holds the freehold on mils place aswell. At the time he offered her a £5k deal on what we thought was the freehold to her property. However, I am not sure if this is possible. Maybe it was £5k to share the freehold.

Anyway, I am looking for someone in the know to help me out - can you own the freehold on a first floor masionette? Any other advice on this situation greatly appreciated.

thanks
Charlotte

Why doesn't your MIL know what she has paid for? Didn't she get any documents at the time or didn't her solicitor explain anything? Who is she paying ground rent and buildings insurance to?

trelawney75

Thanks for all replies - I am not sure on details and am pretty sure she won't know either (she likes to bury her head in the sand). My understanding is that fil bought masionette for mil as part of divorce settlement as hubby was still minor at the time and chose to live with his mum. The masionette is designed as though it was originally two semis, upstairs and downstairs converted into masionettes so four in a block. My belief at the moment is that downstairs bought the freehold to his place and mils only. They share the buildings insurance and she has her own contents insurance.

My real question was whether you can own freehold on an upstairs masionette. From replies, I gather you can't own outright but she could share the freehold with downstairs neighbour. Looks like I will have to get hubby to talk to him. Our concern is that her leasehold is running very low and will cost fortune to return to 99 years - which means if she sells to downsize or anything, the amount she receives from the sale will be impacted.

thanks for your help

Richard_Webster

If the downstairs flat owner (D) bought freehold for his maisonette and mil's then as far as the freehold is concerned there are a number of possibilities (mostly unlikely):

1.D sells freehold of both maisonettes to mil - why should he unless he is selling his own maisonette at the same time?
2.D sells freehold of just upstairs to mil. D makes some short term gain but both maisonettes become unmortgageable and lose value so basically a really silly idea.
3.D sells share of freehold of both flats to mil. Why should D want to lose the element of control he presently has and have to share it and make decisions in conjunction with someone else?

People think that buying a share of freehold is an alternative to getting a lease extension. It isn't. Mortgage lenders are not interested in anything other than the lease and will want that to meet their criteria in terms of years remaining etc.

If you go for a share of freehold you still need to make sure that D will sign to extend the lease. He doesn't have to unless mil goes through statutory process and pays the appropriate premium. I am sure there have been cases where people have misunderstood this and paid a lot of money for a "share of freehold" only to find the other freeholder won't sign to extend the lease without being paid even more (possibly because his lease has already been extended!)

The real issue here is getting a lease extension - that will cost depending on the value of the property, the length of the lease, and the amount of the present ground rent. If the freeholder throws in a share of freehold with it so much the better, but to sell the flat the important thing will probably be to get the lease extended. Other way round OK too - buy share of freehold and lease extension thrown in for no extra cost - but you must have both.

Fire_Fox

trelawney75 wrote: »

My real question was whether you can own freehold on an upstairs masionette. From replies, I gather you can't own outright but she could share the freehold with downstairs neighbour. Looks like I will have to get hubby to talk to him. Our concern is that her leasehold is running very low and will cost fortune to return to 99 years - which means if she sells to downsize or anything, the amount she receives from the sale will be impacted.

thanks for your help

How short is the lease? It is not simply the sale price that is stake, a very short lease will be difficult to sell at any price. If the lease under 80 years there will be difficulties for a buyer getting a mortgage, under 70 or so you will need a cash buyer or to extend the lease at the same time as doing the conveyancing. This requires you to have served notice on the freeholder and agreed a price.
https://www.lease-advice.org

The legislation provides for an extension of 90 years (i.e. 90 plus the remaining term) with a peppercorn ground rent, not an extension to 99 years. The LEASE website calculator will approximate a price for an extension of 90 years, if you want a shorter term you will probably have to pay for a professional valuation. From an earlier thread comparing the two it was little more expensive to take the longer term anyway!

The freeholder does not have to discuss this matter this with your husband as he is not party to the contract, indeed they may refuse to without the written consent of your MIL due to data protection legislation. Does your husband have Power of Attorney over your MIL's affairs? I have this for my parents as they travel a good deal. When they are home they handle their own affairs, but it is a handy thing to have in certain circumstances.

trelawney75

Thanks everyone for your replies - it has cleared up a lot of confusion for me. Hubby doesn't have POE over mil affairs but mil has a great relationship with downstairs so I don't think he would mind talking to both.

Anyway, now I know where we stand we can take things further. Anyone know a good site I can use to get an idea of how much it will cost to increase the lease?

sooz

Look at www.lease-advice.org as advised above.

There is a very basic calculator on there.