Buy Your Freehold - guide discussion

panos123

Hi
I am the owner of a flat in Berkshire. There are in total 24 flats and exactly 50% of the owners have agreed to buy the freehold. One of the 12 owners that wishes to buy the freehold has agreed to buy 13 shares while the remaining 11 owners will buy the remaining 11 shares.

I am worried that too much control will be on one single person. Am I justified in thinking this? Could the majority shareholder in the newly formed company be dictating terms as to the execution of freeholders duties e.g. imposing high commission charges on buildings insurance or demanding that a particular contractor carries out necessary repairs that might occur in the future?

Finally, if I was to acquire 2 shares in the freehold company i.e. one for the flat I own and one other to make up the numbers, what position would that leave me when I decide to sell my flat? Would I have to sell as part of the flat both shares (which I am fairly certain any prospective new owner would not want to pay a premium for) or would i still be able to retain one?

Many thanks in advance for your response

Mossfarr

Information just for anyone who is interested - I have just completed the purchase (enfranchisement) of the freehold of my former Local authority house. The lease had aprox 964 years remaining and the annual groundrent was 'one peppercorn' - ie no payment!
The total cost was £1548.00 :-
Cost of freehold £250
Vendors Legal fees £750(inc vat)
my solicitors fees £480 (inc vat)
other charges £68 (bank fees, land registry fee, LR search fee etc).

You may wonder why I bothered buying it at all as it doesn't cost anything, well:
I can now extend, add a conservatory or change walls or fences etc without having to ask for permission at £150 per enquiry.
The groundrent can not suddenly be increased.
I am not under any obligation to decorate internally and externally at specified intervals.
I cannot be forced to contribute to any 'works' the LA decide are required.
A freehold property will be more attractive to purchasors when I decide to sell.
The Local Authority can never claim the house & land back.

Seemed like a no brainer to me, I now feel I truly own it!

waterstar

I have read through entire thread as I try to learn about/understand "buying the freehold of a leasehold house". Thanks to all who have posted.

I live on an estate of 12 town houses, ie in continuous terrace with small front and rear garden forming part of the demise, together with a right, set out in the demised property, to park a car in an allocated space elsewhere on the estate (ie not directly in front of the house), original leases were 999 years with £10 ground rent. The freehold is owned by a resident controlled management company in which each leaseholder owns one share. Other parts of the estate which are "shared" and are the "common parts", eg driveway, large shared garden etc are maintained by management company.

Questions:

1) is such a leasehold terraced town house under the control of a resident controlled management company eligible for purchase of the freehold?
2) If Yes, then after the freehold is purchased how does the leaseholder who has now become a freeholder of his own house, maintain his rights to car parking, access across the driveway etc, ie all the rights to access etc he has under the lease and how does he contribute to the upkeep of those areas of "common parts"?

t45

Hello,
I live in a period conversion 3 flats – one of the flats owns 100% freehold (but they don’t live on site – they rent our their flat) and the other 2 (one of which is me) is leasehold.
Since I purchased the flat 4 years ago I have had nonstop stress with the freeholder over various issues.
The Deed of Substitution from 2006 is for a term of 125 years so I assume that there is 114 years left on the lease.
My questions are:
Is it worth me purchasing part of freehold (50%) (the other flat is on the market) or because I am unhappy with the way all repairs and maintenance are managed would Right To Manage be a better option or trying to bring in a professional manager?
I would like to have more of a voice rather than be told what work is going to be done and being told without consultation and then having to pay a contribution (which i expect ) – the freeholder decides who to contract for works and i just think they dictate!
The freeholder uses an awful tone in correspondence such as ‘As freeholder we have decided to contract....and we have decided we will have this work undertaken...’...in essence forcing me to agree to the contractor, the work and the payment contribution – I have very little say in what work is to be carried out as I live on site believe i am better placed to see what needs to be repaired or maintained – the freeholder is off site and visits a few time a year.
What would be the benefit of me purchasing part of freehold and is it worth it if I have a relatively good lease?
Would freehold add value to the property but more importantly give me more of a voice in repairs, maintenance and how the building is managed?
What would be the procedure to follow ? I assume valuation then approaching the freeholder with offer?
My ground rent is only £15 per year. But I feel like I am paying a lot every month on jobs here and there as the freeholder deems and they have just told me they are adding a £30 per month garden maintenance charge – Have already paid £300 on garden work.
Many thanks, this is a very useful thread

t45

Hello,
I live in a period conversion 3 flats – one of the flats owns 100% freehold (but they don’t live on site – they rent our their flat) and the other 2 (one of which is me) is leasehold.
Since I purchased the flat 4 years ago I have had nonstop stress with the freeholder over various issues.
The Deed of Substitution from 2006 is for a term of 125 years so I assume that there is 114 years left on the lease.
My questions are:
Is it worth me purchasing part of freehold (the other flat is on the market) or because I am unhappy with the way all repairs and maintenance are managed would Right To Manage be a better option or trying to bring in a professional manager?
I would like to have more of a voice rather than be told what work is going to be done and being told without consultation and then having to pay a contribution (which i expect ) – the freeholder decides who to contract for works and i just think they dictate!
The freeholder uses an awful tone in correspondence such as ‘As freeholder we have decided to contract....and we have decided we will have this work undertaken...’...in essence forcing me to agree to the contractor, the work and the payment contribution – I have very little say in what work is to be carried out as I live on site believe i am better placed to see what needs to be repaired or maintained – the freeholder is off site and visits a few time a year.
What would be the benefit of me purchasing part of freehold and is it worth it if I have a relatively good lease?
Would I need to purchase as a COLLECTIVE ENFRANCHISEMENT and would I need the other flat which is up for sale) to also agree to purchase share of freehold? Or can I do this regardless of the other flat?
Would freehold add value to the property but more importantly give me more of a voice in repairs, maintenance and how the building is managed?
What would be the procedure to follow ? I assume valuation then approaching the freeholder with offer?
My ground rent is only £15 per year. But I feel like I am paying a lot every month on jobs here and there as the freeholder deems and they have just told me they are adding a £30 per month garden maintenance charge – Have already paid £300 on garden work.
Many thanks, this is a very useful thread

Joanthebone

Regarding 'Right to Manage' this is from the Leasehold Advice Centre website:

"The required minimum number of qualifying tenants must be equal to at least half the total number of flats in the building although where there are only 2 flats in a building both must participate & be members of the RTM Company"


I suggest you have a look at this:

http://www.leaseholdadvicecentre.co.uk/Collective%20Enfranchisement.htm



I live in a block of 4 flats with shared freehold between all 4 of us, this still does not make things easy! After battling for nearly 3 years we now have a management company working for us and will finally get some urgent repairs done, but its a very slow process!

Good luck!

t45

Thanks very much Joan - I called leasehold advice and they were very helpful - I would absolutely recommend anyone with lease/freehold issue to contact them.


I have a number of options: Collective Enfranchisement or Right to Manage. The former being the better option but I still have quite a long lease of 114 years so I might hold off the freehold bit for a few years, maybe attempt to form a RTM in the interim which would help with management issues and give lessees more of an input and voice in works such as repairs and maintenance - there is another option - asking the freeholder for voluntarily sell share of freehold but it is unlikely they would agree.....I am much clearer on my options now and feel much more empowered as a lessee.


Freeholder information/Collective Enfranchisement information here:
http://www.leaseholdadvicecentre.co.uk/Collective%20Enfranchisement.htm


I have also found the following links very useful and would like to share them:


For any leaseholders that may have issues with disputes over charges for works/major works etc please refer to this - it covers the essential and required consultation (Section 20 Consultation) process for jobs that the leaseholder is asked to contribute to that are over £250:


http://www.lease-advice.org/article/major-works-and-consultation-under-section-20-of-the-landlord-tenant-act-1985-a-brief-guide-to-your-rights/




Any issues or disputes concerning leaseholder being asked to contribute more than £100 (in a financial year) towards qualifying ongoing works, please scroll down to PART 5 in link below (very useful):


http://www.lease-advice.org/advice-guide/section-20-consultation-for-private-landlords-resident-management-companies-and-their-agents/


A Link to the Landlords and Tenants Act 1985
http://www.legislation.gov.uk/ukpga/1985/70


I hope I can help other leaseholder using this thread as others have helped me.


Many thanks

theblagger

Any one help

House converted into 2 flats
So 50% each freeholder (2 separate owners)

Question , owner of one flat wants to sell , can it be sold if in a legal dispute , with other 50% freeholder?

Thanks for any help on this

theblagger

Anyone advise....thanks

Joanthebone

Hi, Have you looked at the Leasehold Advisory Service website? I doubt that they can help but might be worth a look. Failing that I think you should ask your solicitor?