Share of freehold flat - agreeing maintenance

LHB01

Hi Everyone;

My partner and I have recently had an offer accepted on the top floor flat of a converted Victorian townhouse. There are 3 flats in total that share the freehold; the other two are not owner occupied but have long-term tenants.

The freehold agreement says that all freeholders share responsibility for maintenance of the "fabric" of the building i.e. exterior walls, roof etc, but we are told there is no formal arrangement set up to share these costs through a sinking fund or management company.

Has anyone been in this situation before? Should this be something that is easy to formalise in principle given the underlying freehold agreement, or should we be more wary? We don't want to have to foot the bill for maintenance that should be shared by all freeholders. Any experience or advice would be welcome.

Thanks.

KiKi

LHB01 wrote: »

Has anyone been in this situation before? Should this be something that is easy to formalise in principle given the underlying freehold agreement, or should we be more wary? We don't want to have to foot the bill for maintenance that should be shared by all freeholders. Any experience or advice would be welcome.

Thanks.

I also live as one of three households in a converted Victoria property! We are all owner-occupiers (although that hasn't always been the case) and own an equal share of the freehold.

We don't have a formal arrangement, as we are comfortable discussing things as and when they need doing.

I personally pay the communal electricity bill and then pop a note to the others with their share to pay (as the freeholders we pay an equal share, but as leaseholders we have different shares, so we each just pay that). I also do the same with the fire alarm maintenance.

However, with larger bills such as buildings insurance (c£500 a year), roof maintenance and painting etc, if we think something needs doing, we raise it with each other and then agree what needs to be done. We are lucky as we all get on well. Previously we had tenants in one property, so I used to call the owner of the flat as a freeholder and she'd get involved and also agree what needs doing.

We don't have a bank account that we all sign up to, but each write individual cheques for any work to be done, and hand them over together to whoever's doing the work.

I keep an Excel sheet of ALL bills, all work done and who paid and when, and how much. I never accept cash as payment, only cheques or bank transfers so we have evidence of payments in case we need it.

It works for us, but until you meet the other freeholders, you won't know what will work for you.

First thing, you need to establish what comes under the freeholder's responsibility. Then you need to talk to the other freeholder(s) to see how they've done things before, and agree your approach - in writing if you must. Confirmed by email at least! You won't be footing the bill for maintenance, as you can't do anything without a majority agreement anyway. And you just don't go ahead until you've all paid your share. Can be more difficult if they're not around to see any maintenance issues, but I found the way to do it was to take responsibility for all the organisation and management of it - the other households here are grateful for that, and just pay what they owe!

Remember to check what proportion you have to pay as a leaseholder, not a freeholder.

Just my experience, but HTH.
KiKi

KiKi

Just to add, we don't pay regularly into a maintenance fund, with the understanding we might need to fork out for an emergency if required. However, we do each put money aside to cover freeholder costs as part of our own personal finances. The place was so well converted, and really has no problems, so we agreed a 'sink' fund wouldn't work for us. Plus, we'd have to open an account in a company name to manage it - for only three households it didn't seem worth it.

KiKi

G_M

These informal arrangements can work well. They cut out the overheads of a management company and keep the individual flat-owners in control.

Or they can be a nightmare. If one or more flat-owner cannot be contacted (overseas landlord?), or is not interested, or is a cheapskate/broke it is a recepe for disaster.

Given that the other two flats have tenants (who definately won't want to be involved), tread carefully.

Unless you can track down and talk to the other freeholders.........

Richard_Webster

These informal arrangements can work well. They cut out the overheads of a management company and keep the individual flat-owners in control.

Or they can be a nightmare. If one or more flat-owner cannot be contacted (overseas landlord?), or is not interested, or is a cheapskate/broke it is a recepe for disaster.

Given that the other two flats have tenants (who definately won't want to be involved), tread carefully.

Unless you can track down and talk to the other freeholders.........

I agree they can either be very good or very bad, and the personalities and attitudes of the individuals involved become quite important.

You must talk to the other flat owners and see how things operate. If there is a problem the seller is unlikely to tell you but if the others are evasive and difficult, you have your answer.

It is quite rare for there to be a formal sinking fund in these situations and you just have to accept that's how it is. There is no magic fairy that will put everything right if you can't get agreement e.g. for some major work.

LHB01

Thanks to you all for taking the time to respond to my post. All your comments have been very helpful.

Richard_Webster

Just to emphasise the point, Kiki's posts #2 & #3 set out a typical example of what can happen in practice in a good situation and this kind of thing can work well, but as I have said it doesn't have to work, so you have to balance the advantages of not having an outside landlord against possible problems in dealing with your fellow co-freeholders.

You have to decide how likely problems will be by assessing the other lessees themselves and that is more difficult if the other flats are let to short term tenants.

I've set all this out on my website which you can find if you look for it.