Odd situation combining two flats into one.

Richard_Webster

Before we get into all this stuff about SDLT etc can we establish exactly who owns what?

Does OP own the lease of one flat?

Does someone else - other flat owner (OFO) own the lease of the other flat?

Who owns the freehold of the whole building?

fathippy

To be honest, it was somewhat of a hypothetical scenario to make it easier to visualise. The key question was whether anyone had experienced a transaction with two (unconnected) sellers and one buyer.

For the point of your questions though, which are fairly important, assume that there are no obstructions from freeholders/mortgages etc. Assume in this case that the two flats share the freehold, or that if they are both leasehold, then the freeholder will happily grant a new lease on the combined entity.

It is, I guess, an issue of timing, and also of who knows what when. If you sell two flats with planning permission, that is clear cut, as the buyer then does the work and submits new details to the land registry, however if the vendors have already done the works and the purchaser is fully aware of this, then the "problem" is that the land registry may be registering the sale of a flat or two that dont actually exist, even if only for a few weeks, as the buyer will then re-register the new house at a later date.

Is this fraudulent, or just a necessary by product of a complicated scenario?

Richard_Webster

If OP and OFO together own the freehold they transfer the 2 leases and the freehold to the buyer in one TR1 deed and by one contract. Buyer pays SDLT on the £400K price. It may be necessary to give details of the different bits of the transaction to HMRC but essentially they are all part of one transaction and buyer is paying 3% on the whole thing. His solicitors then send it all to the Land Registry asking for the merger and cancellation of the two leases (because they have been transferred to buyer who also owns the freehold) and the freehold of the whole building ends up in buyer's name without the leases.

If there are more than 2 flats in the building it gets more complicated.