Victorian building...being a freeholder helps?

london-dog

Hi all

Am offering on a Victorian maisonette in zone 2 London. It's being sold as leasehold with very long lease, or share of freehold: seller will do either!

The seller is a property flipper who got the whole townhouse cheap this year (probate sale) and is selling the 3 individual flats at profit. I doubt he'll make a conscientious freeholder...

My concern is that the building exterior and communal entrance are very run down.

I don't want to spend £80k doing up the maisonette internally (needs a LOT of work) only for the rest of the property to remain rundown. Of course I will get a building survey done to see if structural problems lurk, and pull out if so.

However I could do the communal cosmetic works myself if I had to. So if I push for share of freehold, so that property flipping guy and I are the two freeholders, will this help my position?

Best

Richard_Webster

It might help but the key point is that as joint freeholders you have to decide together what is to be done and if he won't do anything you are no further forward in practice.

Your power is that you can refuse to sign to grant a lease to a new flatbuyer and transfer the freehold to you two plus him. If the freeholder is silly enough to make you a joint freeholder straightaway then you will have this hold over him.

Frankly it is unlikely that any sensible person would "share" his freehold before he has taken the money out by creating the three flat leases. If he grants the lease of the first flat to you and transfers the freehold to you and him then he risks you requiring half of the money when he grants the next lease!

I think when he sees his solicitor he will be advised to transfer the freehold to the three new lessees after he has sold the last flat. If he does that then it will be up to the three of you to sort it all out. Good luck getting the others to pay their share!

london-dog

Thanks Richard. Should have said that one flat is already sold, and the other for some reason didn't come to market.

Either as a leaseholder or joint freehold, if I was to do up the communal areas and building exterior out of my own initiative (assuming the others weren't willing to contribute) could I be in trouble?

sooz

Go to https://www.lease-advice.org & read it.

As leaseholder, you do not own any of the communal areas or outside of the building.

So if you did work to the outside or hallway, not only would you have paid for it, you could find yourself in a position where you have to pay the freeholder to undo your work to HIS BUILDING.

If you have share of freehold, you & the other owners would jointly own the building & communal areas. Again, they might hate your plans or works. You would need to reach an agreement with them, as to what works, how much, colours, timescale, contractors. It would be THEIR building too.

Richard_Webster

If you have share of freehold, you & the other owners would jointly own the building & communal areas. Again, they might hate your plans or works. You would need to reach an agreement with them, as to what works, how much, colours, timescale, contractors. It would be THEIR building too.

Yes, if you have a literal "share of freehold" with no trust deed and you do not "own" through a company that holds the legal freehold title, then any discretions as to what work is done and when have to be exercised unanimously! This can be a great cause of argument.

You either need a company to own it so that decisions can be made by a majority vote or have a trust deed which includes the provision (and also gets round the problem that occurs when one of those who has his name on the freehold title disappears or has his flat repossessed and the freehold cannot then easily be transferred so that an incoming lessee gets his name on the freehold title.)

london-dog

Thanks guys. So if I go with share of freehold then I'm in a situation with one other freeholder who was no real interest in the building (he's a flipper making his profits through sale of individual flats)...and I would be dependent on him agreeing.

What do people think then of taking it as a leaseholder (seems less hassle), but asking for written guarantees from freeholder that he will develop run down parts and bill the 3 leaseholders accordingly? I could ask for these conditions prior to proceeding with the sale.

drummer_666

if he hasn't done up the outside of the property prior to marketing it, what makes you think that he will do it up after selling the flats...

propertyman

london-dog wrote: »

Thanks guys. So if I go with share of freehold
What do people think then of taking it as a leaseholder (

Oh for goodness sake!!!!!! :eek:

You can only buy your flat as a leaseholder that is what you will own
there is no such thing as share freehold :mad:

As well as buying your lease, your decision is whether to jointly own the freehold of the building with the developer flipper.

I strongly suggest that you put it into a company with shares at 1 per flat, and when he sells up you can take each share or you can decide to sell those to each new flat owner as they complete.

Your main concern is who will look after the building and whether they will do so. It's often better than someone with a vested interest does so, and ideally share that load with the others.

But be warned; leaseholders have considerable rights ad freeholders have to address those and a body of legislation that often seems at odds with "common sense", even if they have a lease and a share in the freehold company.

Bluebell1000

We own a flat in a victorian house, one of four flat in the building. We also have a share of the freehold. There is no company, and everything is agreed between the owners. It's worked reasonably well so far, but doing it that way does rely on everyone being nice and co-operative. Technically it's written into the freehold that only residents have the right to decide what happens to the building. Non-resident owners just have to pay whatever the residents ask. As there's only one owner-occupier, and the other three flats, including ours, are let, this could potentially give the one resident a lot of power over what happens, but happily he's not taking advantage of that

london-dog

Thanks for all the replies guys. Yes propertyman of course you're right re what freehold relates to, as separate from lease of flat.

Am thinking that becoming a joint freeholder may be an unnecessary burden...what I really need are guarantees from my potential landlord that he will do up the building facade and communal areas.

Travelqueen

I'm a joint freeholder with 3 other flats in a building in north london. I'm in the process of selling and just extended my lease very easily as everyone who lives in the flats has a vested interest in them.

In my 8 years owning the place we have jointly paid for various things from fixing the flat roof, redoing the front garden and garden walls, to having the victorian tiles expertly restored, the hallway painted, and yours truly sanding down and varnishing the hall stairs. It definitely added to the value of the property, and because you all share you do want to keep things looking good. Had someone else had the lease I think I would have thought twice about buying, the works above wouldn't have got done, or certainly not as fast, and I think maybe selling it wouldn't have been so smooth, well certainly not on extending the lease anyway.

Each to their own, but that to me was the better option of all the places we looked.