house converted to 2 flats- serving notice for share of freehold

jee

Hi all

I am in the process of buying a flat with a long lease, flat downstairs have not extended theirs. When I was viewing they mentioned that they want to buy a share of the freehold but their neighbour (my vendor) would not agree to it.
If I and this neighbour serve notice on the freeholder that we want to buy the freehold how would the costs be split? I know that we would have to pay for our and the FH's legal costs but what about the cost of the share of FH?
Am I right in assuming that mine will be considerably less than the neighbours because my lease is 150 years and his is 60 years? Will my share be more of an administration cost?

Thanks for any advice!

Richard_Webster

they want to buy a share of the freehold but their neighbour (my vendor) would not agree to it.

If the neighbour won't agree, isn't this all rather academic or are you hoping to get them to change their minds?

jee

Sorry maybe I'm not being clear.
The neighbour who didn't agree is the person I am buying the flat from. The owner of the other flat wants to serve notice. I said I would agree once I purchase the property.

Richard_Webster

In theory you share should be less because your lease is longer but the problem is that you have to get your neighbour to agree in order to force the freeholder to sell in the first place and he may put the price of his agreement at haring the costs equally rather than you paying less than him!

Also important to find out now how easily the freeholder will sell - compelling him to do so can be quite expensive if he wants to be awkward. If your seller doesn't want to do it, then this may be because he suspects that the freeholder will suggest a high price and be generally difficult and he is avoiding going into it because he doesn't want you scared off.

jee

Thanks for your reply Richard but can you please explain what you mean by:

to get your neighbour to agree in order to force the freeholder to sell in the first place and he may put the price of his agreement at haring the costs equally rather than you paying less than him!

Who would put the price of the agreement? Would we not instruct a solicitor and conveyancer at this stage to work out the cost of the freehold and also the solicitor to write the letter rather than the neighbour?

Idiophreak

jee wrote: »

Thanks for your reply Richard but can you please explain what you mean by:

to get your neighbour to agree in order to force the freeholder to sell in the first place and he may put the price of his agreement at haring the costs equally rather than you paying less than him!

Who would put the price of the agreement? Would we not instruct a solicitor and conveyancer at this stage to work out the cost of the freehold and also the solicitor to write the letter rather than the neighbour?

The freeholder is going to need to be paid XXXX for the freehold.

Logically, maybe you should pay 40% of this and the bloke downstairs should pay 60%. If, however, the bloke downstairs decides he doesn't want to do it, you can't do it either. So, the bloke downstairs has a little power over you, in theory. He could refuse to pay anything unless the split is 50/50. Would be kinda harsh, but these things happen. It will all go through solicitors etc, naturally...but the fundamental mechanics of who pays what is still in the hands of the people with the money (you and the fella downstairs)

jee

I was thinking that the best way to do it was to have a conveyancer value both our flats and if the freehold cost is x plus the premium of extending the lease for each flat i would just have to pay x plus solicitor fees etc.
They have already said they've been quoted 25,000 to extend the lease. In theorey I have paid this in the purchase of the flat because had it not been extended last year I would have paid 25k less.

Richard_Webster

The freeholder is going to need to be paid XXXX for the freehold.

Logically, maybe you should pay 40% of this and the bloke downstairs should pay 60%. If, however, the bloke downstairs decides he doesn't want to do it, you can't do it either. So, the bloke downstairs has a little power over you, in theory. He could refuse to pay anything unless the split is 50/50. Would be kinda harsh, but these things happen. It will all go through solicitors etc, naturally...but the fundamental mechanics of who pays what is still in the hands of the people with the money (you and the fella downstairs)

Well put!

Of course you could get advice from a specialist surveyor about how much should expect to pay for the freehold and how that should be divided between you proportionately. At that point your neighbour may say that if he has to pay that much he doesn't want to bother.

Or the freeholder comes back with his figure of what he wants (probably significantly more than your surveyor has told you) - will your neighbour want to pay the costs of getting the surveyor to argue the point with the freeholder or going to the Leasehold Valuation tribunal over the point? he may say that it is worth £x,xxx for him to buy the freehold with you but if it costs any more than that he won't go ahead - if he doesn't go ahead you can't force the freeholder to sell.

jee

thanks for all the advice Richard and Idiophreak.