Change Freehold Flat to Leasehold ?

roger56

Most people would prefer freehold but the difficulty with a flat is who pays what in regard of the fabric of the building. If the roof leaks, is it only the top flat owner who pays? That's not really fair.
So most flats are Leasehold and someone owns the Freehold and maintains the structure/grounds (outside walls etc). The Freeholder will charge for this which can be cause for disagreement.
So many flats setup a Management company (the Freeholder) where the Leaseholders own shares in proportion to their ownership of the overall property. Leaseholders can stand as the Director(s) and Secretary of the Management Company. They can set charges for maintaining the structure.
You do need to get legal advice on this.
Companies House has information :http://www.companieshouse.gov.uk/
Do look at Directors and Secretaries responsibilities, there are legal implications
http://www.companieshouse.gov.uk/about/gbhtml/gba1.shtml

This process will cost to setup the company but will eventually have benefits. The main obstacle may be getting everyone to agree in the first place.

slater14

Johnocyprus,

You are quite right with your thoughts on F/hold - L/hold. The Flat WILL be worth more as Leasehold and NO, mortage companies will NOT mortage Freehold flats.

The guy upstairs most likely realises this and will convert both to Leashold then sell if he buys your parents flat.

Here's the tricky bit - converting to L/hold will take his agreement also and then a management company will need to be formed to manage the property (gardens, hallways, public areas, roof, walls, structure etc etc). You need expert legal advice...but basically your intial thoughts are right.

EdInvestor

http://www.lease-advice.org.uk/newintro.htm

This website should tell you all you need to know about leasehold/freehold.

Murtle

Some lenders do mortgage freehold flats. However, i lived in a block of flats, and all the top flats were responsible for the maintenance of the roof above them, and all the ground floor flats were responsible for the garden outside them. There are lots of purpose built freehold flats in my area - so someone must be getting mortgages... my mortgage advisor had no issue with them when I was looking at them.... My current place, each flat owns a share of the freehold - it's not much better run then where I was when we didn't own it....

Good luck in what you choose to do!!! Seems to be a whole mine field out there....