Help - Selling a flat with a share of the freehold

vivtse

Hi Everyone,

I am new on here, so please be nice.

I wonder whether anyone has any experience in selling properties with a share in the freehold? I bought a converted Victorian flat leasehold in 2004. In 2007 the 3 flat owners bought the freehold off the previous freeholder.

When one of the flats was sold later in 2007, I was not required to sign a deed to agree to the transfer of their share of the freehold to go to the new owner.

However, I have been sent a land registry transfer deed in respect to the freehold title and they are demanding the other 2 freeholders have to sign in agreement.

Is this necessary? Or have the purchasers solicitors done something wrong? Each freeholder owns each of the 3 flats, so surely when the leasehold portion is transferred, this is automatically agreed to be transferred too?

Also, I have been asked to increase the indemnity for Building Regulation indemnity and indemnity policy for unknown convenants. I have no idea what these are and have never purchased anything other than the usual buildings and contents insurance. Could it have been with all the original deeds from when the original freeholder converted the house into flats?

I'd be really grateful for any advice.

Thanks

tim123456789

I've never had to sign such a document as a shareholder-director in a shared freehold block.

The compnay secretary did it on behalf of the "company".

Or is this the difference. You don't have a company? (you should have, it's much easier!)

propertyman

Thats because the freehold is not held by a limited company....

In this case where a group of individuals jointly own the freehold, they routinley fail to have advice from their solcitor as to how to deal with such issues and put in a partnership agreement or declaration of trust.

The FH and LH titles are completely separate interests, he may have sold one but is entitled to remain a freeholder, unless they agree to sell their interest. In the absence of any agreement or provision between the owners of the freehold one is free to sell their interest and the remaining FH sign the transfer document.
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vivtse

Thanks for your replies.

You are right, we did my set up a management company for the freehold and was never advised to do so when the solicitors arranged for us to purchase the freehold.

What I am confused about, is if I have to get the 2 other freeholders to sign to agree transfer of my share to the new purchaser, why we were not asked to sign when one of the flats was sold a few years ago (after we purchased the freehold)?

Does anyone know about these indemnity policies?

Thanks

Land_Registry

propertyman has explained what can happen in such scenarios and may also be willing to post re the policies to which you refer.

If you have 3 flats and each flat-owner owns their flat and is also Freeholder they effectively own the whole freehold as a threesome and not just the freehold for their own flat. You would not be transferring a share and in effect the whole freehold has to be transferred each time i.e. each of the freehold owners transfers to the remaining 2 plus the new owner.

I would recommend checking what names appear on the Freehold title - you may find that the freehold was not transferred when the other flat was sold 2 years ago?

Indemnity policies are normally taken out to cover you against something which may happen in the future. Purchaser's solicitors may ask for these if they believe that there is a doubt over something or other e.g. the title refers to the possibility of covenants existing but no specific record exists or no evidence of building regulations exists for work done on the property - others will be able to post with more authority on this aspect though

However if you are being asked to increase your payments then it seems you already pay for these and as such may have received some explanation as to their purpose or when you started paying? If not it may be worth asking for a wider or further explanation from those now asking or from your fellow leaseholders/freeholders?

Richard_Webster

Sadly this is classic "share of freehold" foul up and the kind of reason that Propertyman finds it necessary to pursue his hunt for the inventor of the expression!

It is something that one flat owner has little real control over - e.g. in this case the 2007 flat buyer's solicitors not insisting on a transfer of the freehold so as to include his buyer client as a co-freeholder.

vivtse

Thanks to you both for your useful comments.

Now I know not to be too annoyed at the solicitors for making me do this, as it will delay our completion as the other 2 freeholders are both working away during the week which only leaves the weekends do do anything.

Land_Registry

I assume then that the current leaseholders are also the registered freeholders - if not, as implied by earlier posting, then that will also need to be resolved so best to flag with solicitor now just in case as may add to time required to resolve.

vivtse

Thankfully yes the 2 leaseholders are also the freeholders so somewhat easier to arrange a transfer.

Richard_Webster

Ideally someone in this kind of situation should try to persuade the other two to enter into a deed of trust to deal with what happens if one of the three of you won't sign or can't be found at some point in the future.

In practice nobody ever thinks it will happen and they don't want to spend the money on it.

propertyman

LEASE have listened and gave advice recently on this.

http://www.lease-advice.org/publications/documents/document.asp?item=102