Problem with buying a leasehold maisonette and being the only freeholder too?

katejo

Fire_Fox wrote: »

You will be wearing two hats, it's helpful to see yourself as two entities. Freeholders are responsible for paying ALL the buildings insurance and ALL the repairs and maintenance as per the long lease, claiming the money back from the leaseholders via the service charges. So effectively you will pay your business bank account out of your private bank account.

Be aware there are strict regulations as to your rights and responsibilitie, if a freeholder doesn't ask for money in the prescribed way they can end up out of pocket. Also be aware a freeholder is liable for the insurance, repairs and maintenance even if the leaseholders do not pay so you may need a 'float'. You also need to do annual accounts and other boring tasks. Don't assume anything this is a business arrangement. Loads of advice as to the rights and responsibilities of both freeholders and leaseholders here, read as many articles as possible more than once http://www.lease-advice.org/publications/

You may not necessarily have responsibility for all repairs. in my previous leasehold flat, the leaseholder in the top floor flat was responsible for organising roof repairs and the leaseholder in the lower flat had to deal with repairs to the lower part (stated in lease). That causes all sorts of problems as i had when the roof needed doing and the other leaseholder refused to pay up.
The current owner of my old flat has had problems with leaking from cracked pipes under the back path and the freeholder has denied any responsibility.
Based on my experience of being a leaseholder, i would not want to have another leasehold place or own the freehold on any flats.

princeofpounds

It's not a major problem to be a freeholder of a building, if you are organised. Far better than not being the freeholder in my opinion. I wouldn't be too scared of it, just aware of what you need to do.

katejo

princeofpounds wrote: »

It's not a major problem to be a freeholder of a building, if you are organised. Far better than not being the freeholder in my opinion. I wouldn't be too scared of it, just aware of what you need to do.

Being the freeholder of my own house is fine. Just wouldn't want to have to deal with other leaseholders.

princeofpounds

katejo wrote: »

Being the freeholder of my own house is fine. Just wouldn't want to have to deal with other leaseholders.

Yes, that is perfectly understandable. But I was comparing it to being a leaseholder, where you still have to deal with another party. And you are in a more powerful, if responsible, position as a freeholder.

Fact is, if you live in a flat you have to manage the block cooperatively one way or the other.

Fire_Fox

Frances63 wrote: »

Thank you Liz, that's reassuring. There is a just small hallway (not communal stairs though) that would be shared by both flats, but that's all.

Fire Fox - I have been reading through the 'guide to how leasehold works' under the link you very kindly gave me. There is a section that states:
Should I buy a leasehold flat?

If you want to buy a flat, rather than a house, then you have little choice.
Present property law in England and Wales effectively requires that flats be leasehold, although some leasehold flats are now sold with a share of the freehold through participation in a residents management company. In addition, legislation introduced in September 2004 does allow for a new form of tenure known as commonhold, where the flat is held on a freehold basis.

Now if I am the freeholder, then is my flat a freehold flat? or a leasehold flat that I happen to additionally be the freeholder of (along with the ustairs flat)? Or is this just semantics and not really important?

The part in (my) red above seems to be saying that a freehold flat per se is not lawful? Is this why mortgage companies refuse to lend on them?

That would seem odd as the auction Co-ordinator (it's being sold through one of those on-line conditional auctions) tells me the street is full of maisonettes where the ground floor holds the freehold for the building. So it must be very common, and therefore surprising that it causes a problem with lenders.

Could anyone point me to where I can find details of the 'property law in England and Wales that effectively requires that flats be leasehold'?

As stated "You will be wearing two hats, it's helpful to see yourself as two entities". The long lease and the deeds for the freehold will be two separate sets of documents that you purchase at the same time and two sets of rights and responsibilities, a freehold house or freehold flat is one set of deeds/ one title. This is a very important distinction, freehold flats are a nightmare to care for because nobody is covenanted or contracted to anyone else, you can't force your neighbour to pay for the insurance or the roof. If the ground floor flat is allowed to dilapidate to the point the wall collapses, clearly the upper flat is in trouble!

katejo wrote: »

You may not necessarily have responsibility for all repairs. in my previous leasehold flat, the leaseholder in the top floor flat was responsible for organising roof repairs and the leaseholder in the lower flat had to deal with repairs to the lower part (stated in lease). That causes all sorts of problems as i had when the roof needed doing and the other leaseholder refused to pay up.
The current owner of my old flat has had problems with leaking from cracked pipes under the back path and the freeholder has denied any responsibility.
Based on my experience of being a leaseholder, i would not want to have another leasehold place or own the freehold on any flats.

You misread my post "Freeholders are responsible for paying ALL the buildings insurance and ALL the repairs and maintenance as per the long lease". As per the long lease meaning whatever repairs and maintenance are set out there, ALL as in not half as the OP assumed.

I don't see how organising work individually but sharing costs as you suggest for your previous flat is enforceable, leaseholders are contracted to the freeholder they are not contracted to one another. Was that arrangement in your long lease? Were you share of freehold or not in England and Wales? Or have I got the wrong end of the stick and each leaseholder arranged and paid for repairs to their own half? Roof can be the sole liability of the upper flat if they have use of the roof space, this can be enforced by the freeholder. If the freeholder does not meet his obligations this can be enforced by the other leaseholder(s) via the LVT.

katejo

Fire_Fox wrote: »

As stated "You will be wearing two hats, it's helpful to see yourself as two entities". The long lease and the deeds for the freehold will be two separate sets of documents that you purchase at the same time and two sets of rights and responsibilities, a freehold house or freehold flat is one set of deeds/ one title. This is a very important distinction, freehold flats are a nightmare to care for because nobody is covenanted or contracted to anyone else, you can't force your neighbour to pay for the insurance or the roof. If the ground floor flat is allowed to dilapidate to the point the wall collapses, clearly the upper flat is in trouble!



You misread my post "Freeholders are responsible for paying ALL the buildings insurance and ALL the repairs and maintenance as per the long lease". As per the long lease meaning whatever repairs and maintenance are set out there, ALL as in not half as the OP assumed.

I don't see how what you suggest for your previous flat is enforceable, leaseholders are contracted to the freeholder they are not contracted to one another. Were you share of freehold or not in England and Wales? If you were simply both leaseholders how on earth did that get passed your conveyancer?

I assure you that my lease spelled it out exactly as I said. In case it makes any difference, I was in a first floor maisonette with my own front door and the flat underneath was the same. The freeholder was incompetent (or a crook). My mortgage lender made the new roof a condition of the mortgage. I definitely did not have a share of the freehold. The conveyancer did not raise any objections when i bought it or when i sold it 12 years later.

Fire_Fox

katejo wrote: »

I assure you that my lease spelled it out exactly as I said. In case it makes any difference, I was in a first floor maisonette with my own front door and the flat underneath was the same. The freeholder was incompetent (or a crook). My mortgage lender made the new roof a condition of the mortgage. I definitely did not have a share of the freehold. The conveyancer did not raise any objections when i bought it or when i sold it 12 years later.

Your earlier post wasn't clear what the leaseholder was (not) paying up for - the repairs they organised or the repairs the other flat organised. Incompetent freeholders are commonplace unfortunately, that is where the Leasehold Valuation Tribunal comes in.