Buy Your Freehold - guide discussion

SouthCoastSkies

Hi,
I've just received a notice to say that the freehold interest of the flat I own (well, mortgage) is for sale. I've been notified of my right to first refusal with 2 months notice. After this time, the proposed purchaser is an owner of three of the flats within the building.

I'd like to be part of the purchase of the freehold, but given that one of the other leaseholders is already the interested party, I'm not clear how I then go about proposing that I be part of the freehold purchase. Would I just propose that I enter into a joint arrangement with them ?

Thanks in advance for any guidance !

GTG

Typically when more than one party purchases a freehold of a block of flats a limited company is formed to hold the asset. Assuming there are no other leaseholders interested then a simpler method is to have a Deed of Trust between the two of you. Both structures set out the ownership details, the rights and responsibilities and how it is to be governed etc.

You could call the people you received the notice from, presumably the current freeholders solicitors and you should get some advice off them. However, you really need to speak to your solicitor as your going to be needing him/her to act on your behalf whether you purchase with the party mentioned or him and other leaseholders in the block.

Alternatively, you could call the leaseholders advisory service for free. There's a link to the website in my post above. Expect to be held in a long queque though!

SouthCoastSkies

Thank you very much, your reply was very helpful. I was confused whether I could be included in the purchase of the freehold if it were just myself and the other leaseholder that were interested. I hadn't considered a Deed of Trust, so will contact the managing agent & suggest that as a possible route. My thanks again.

GTG

No problem. The freehold may already be held in a limited company but I doubt if it will be suitable for you both to purchase. If after the notice period only the two of you are interested in buying you will need to get together with the other party and agree on a solicitor to appoint for the conveyancing. Together you can then seek advice from the solicitor as to which is the best legal structure to use.

There are advantages and disadvantages with both structures and the solicitor job will be to help you to make an informed decision. The limited company will be more expensive and requires a fee (about £30)and an annual return form filling, easy for a layperson to do. Cost should not be the deciding factor but rather what is most legally suitable to protect both of your interests. As you don't know each other I suspect that the solicitor will advise you to form a limited company.

If you do complete the purchase and you are kind enough to share I would be interested to know what route you took.

Stepheny

Hi could do with a bit of advice on buying the freehold on our house. Is it best to deal directly with the freeholder ( I've read a few reviews on my particular freeholder company and they are not good reviews!) Or would we be better off going thru an independent business who specialise in helping us leaseholders to buy the freehold. We know that we have to pay for their service, just want to know which is the best option. Thanks

eddddy

Stepheny wrote: »

Hi could do with a bit of advice on buying the freehold on our house. Is it best to deal directly with the freeholder ( I've read a few reviews on my particular freeholder company and they are not good reviews!) Or would we be better off going thru an independent business who specialise in helping us leaseholders to buy the freehold. We know that we have to pay for their service, just want to know which is the best option. Thanks

What type of independent business do you mean?

There are valuers who will give you a valuation for the freehold, and solicitors who will do the legal stuff. Is that what you mean?

GTG

You've answered your own question in your post.

I've read a few reviews on my particular freeholder company and they are not good reviews!

If the integrity of your freeholder is in doubt why as a layperson would you want to deal directly with him/her/them? Even if they were of good standing this is a business transaction to them and they will want to obtain the highest price possible. It is almost guaranteed that they will have professional people working on their side. By law, leaseholders of flats can compel the freeholder to sell the freehold and have protection by the law in the case of any dispute. I suggest you investigate to see if there is anything in place to protect leaseholders of houses.

Joanthebone

Hi, my only experience is in lease extension for a property over commercial premises.

I got a leasehold valuer to start the process, he was very helpful and liaised with the freeholder for me. He got a very good outcome for me. If the freeholder will not co-operate there is always the Tribunal to go to, although my valuer told me it was best avoided and he rarely had to go that far to get a good deal!

I had to pay for my own valuation, the freeholders valuation, all the solicitors fees and for the extension which all came to £12,000 but it was worth every penny. The freeholders started off wanting to extend the 65 year lease to 99 years and add hefty service charges (which I had never had before) doubling every 10 years! I got an extension of 150 years and no service charges, just peppercorn ground rent. (£1)

My advice is to get a good leasehold valuer! Good luck!

Stepheny

Hi, they are a leasehold valuation independent business that specialise in helping leaseholders buy the freehold. They posted a flyer thru our door. I remember my old neighbour going with a company this way a few years back, every thing went well. Unfortunately we were not in a finical position back then to look into buying ours. From reading the flyer it looks like they sort every thing out. They receive no fee or payment until the conveyance has been completed.

eddddy

Stepheny wrote: »

Hi, they are a leasehold valuation independent business that specialise in helping leaseholders buy the freehold. They posted a flyer thru our door. I remember my old neighbour going with a company this way a few years back, every thing went well. Unfortunately we were not in a finical position back then to look into buying ours. From reading the flyer it looks like they sort every thing out. They receive no fee or payment until the conveyance has been completed.

How much are you expecting to pay for the freehold?

Typically, you might use a freehold valuer (who would be regulated by RICS - the Royal Institute of Chartered Surveyors) and a solicitor (who would be regulated by the SRA - the Solicitors Regulation Authority).

But you could use another businesses instead to do most of the work - and they don't have to be regulated by anyone.

Those other businesses might be excellent at doing freehold enfranchisement or they might be rubbish. They might charge less or they might charge more.

If you know somebody who's had a good experience with this company that's a good sign.

Maybe speak to a few firms to compare fees, and to see who you like best.



There's also some good info here:
https://www.lease-advice.org/advice-guide/houses-qualification-valuation/
https://www.lease-advice.org/faq/i-own-a-leasehold-house-how-do-i-buy-the-freehold/