Freehold flat & 999 lease "what to do next"

pjran

The estate agent says the flat is "Freehold" but also shared leasehold, we're totally confused. I have read not to get involved with a freehold flat and that lenders are hesitant to give a mortgage.

The land registry online states that the property is subject to a shared leasehold agreement rather than separate ones and there is also a 999 year lease.

The quote from our local solicitor is a minimum fee of just over £1K, the property is under any stamp duty tax.

We are worried that the flat would be difficult to resell in the future, is that right???

Richard_Webster

Sorry but you will have to give us some more information. This is all garbled.

shared leasehold agreement rather than separate ones and there is also a 999 year lease.

This doesn't make sense.

Is there a 999 year lease of the flat OP wants to buy?

Is there a single freehold title that covers the whole building which belongs to the owner of the flat being bought and another or others?

Which lender is OP proposing to use to buy the flat?

hazyjo

Is it just a 'shared freehold'? I'm betting the EA just hasn't been very clear or is confused. What did the actual property details say? 'Share of freehold' anywhere on them? Definitely make sure it's that and not a 'freehold flat'.

Jx

casper_g

I strongly suspect the OP has this the wrong way round: if the flat is leasehold with a share of the freehold for the building, this is nothing out of the ordinary. If it really is a freehold flat, be very wary (it will be difficult to mortgage, reducing its value considerably). But if the individual flat has an individual freehold, there's no role for a lease to play, let alone a strange shared lease arrangement.

pjran

Richard_Webster wrote: »

Sorry but you will have to give us some more information. This is all garbled.



This doesn't make sense. I'm totally confused by it all

Is there a 999 year lease of the flat OP wants to buy? Apparently so

Is there a single freehold title that covers the whole building which belongs to the owner of the flat being bought and another or others? Joint freehold I think but not sure

Which lender is OP proposing to use to buy the flat?

Mainly the bank of Mum & Dad plus a small mortgage

Thank you for your help.

pjran

hazyjo wrote: »

Is it just a 'shared freehold'? I'm betting the EA just hasn't been very clear or is confused. What did the actual property details say? 'Share of freehold' anywhere on them? Definitely make sure it's that and not a 'freehold flat'.

Jx

Thank you for your reply.
The EA is being a little pushy, says the seller will withdraw if we don't act quickly - the offer was only agreed Monday evening. I believe the property has been put on the market again because the previous sale fell through, alarm bells are ringing.

Richard_Webster

Is there a 999 year lease of the flat OP wants to buy? Apparently so

Is there a single freehold title that covers the whole building which belongs to the owner of the flat being bought and another or others? Joint freehold I think but not sure

So it looks like a classic shared freehold as others have suggested.

When you apply for a mortgage forget all about the freehold aspect -that will only confuse the lender and make it likely they will refuse a mortgage because they think it is a freehold flat. You are getting a mortgage on the 999 year lease.

If you think about it, if the freehold is jointly owned the others won't want your mortgage on something that is jointly owned, will they?

You didn't answer who the mortgage lender will be - if you do then we can look up the CML handbook and see what that particualr lender's attitude is to shared freeholds.

pjran

Thank you Richard. The mortgage hasn't been agreed they have only seen a finacial advisor so far.

jennifernil

Just out of interest, can someone explain why a freehold flat would be a problem?

Here in Scotland, we do not have "leasehold", so I am not sure how our position compares to that in England.

Richard_Webster

Just out of interest, can someone explain why a freehold flat would be a problem?

Have a look at this thread and in particular a link to an explanation, but Scots Law is radically different form English law:

https://forums.moneysavingexpert.com/discussion/3324692

jennifernil

Thanks!

Generally things seem to go fairly smoothly here regarding maintenance, but if there are reluctant owners then I believe a charge can be put on the property to recover outstanding amounts eventually. This may however mean other owners paying more meantime, so the situation is not entirely good.