Can I find out what the other freeholders paid for the freehold?

pbrichard

So, I am an owner of a leasehold flat in London which is in a Victorian conversion with four other flats.

Just before I bought the flat, the other flat-owners bought the freehold. My seller wasn't involved and it was a mildly complicated purchase without going down the route of becoming a freeholder at the time.

With the benefit of hindsight, etc, but now I am interested in getting in on that freehold. I am on good terms with the neighbours and am sure I could agree a price with them informally. The trouble is, that they are a bit cagey about how much they paid - and if I came right out and asked them, they would probably fib to recoup a bit more money from me.

My question then is whether there would be a legal or financial record of the freehold purchase anywhere that would allow me to see what they paid? I suspect not, but no harm in checking, right?

It has been suggested that the best way of finding a negotiating price is to get a valuation done for a leasehold extension and then offer more or less the same for the freehold, safe in the knowledge that in the worst case scenario I could just extend the lease at a price that would be fixed by a Leasehold Valuation Tribunal. Does everyone agree?

kingstreet

Why don't you ask them how much they want, then see if all the chicanery you are considering is actually worth it?

It doesn't matter what they paid for it, it's what it's worth to them and what a fifth share is worth to you.

Naf

Wouldn't land registry show it?

pbrichard

kingstreet wrote: »

Why don't you ask them how much they want, then see if all the chicanery you are considering is actually worth it?

It doesn't matter what they paid for it, it's what it's worth to them and what a fifth share is worth to you.

Thanks v much for replying - yes, obviously that is a good starting point for negotiation, but if I was in their position I might (justifiably) say "well how much are you willing to pay?" and then I'm back to square one. Of course, I could say "how does £1000 sound?" and I might then get a conversation going.

However, for me the point is that if I knew that they'd paid £100k, and then they asked me for £50k, I'd have a sense (a) of how they want to negotiate and (b) that there may be some more room for negotiation. I'd also know that I'd probably be able to get them down to £20k without too much hassle and that would be closer to what I'd be prepared to pay, I think. But I'd be even happier paying £10k. And if they only paid £50k, I'd feel a chump paying £20k and not potentially saving myself £10k if I could have found out they'd paid £50k by, I don't know, paying £10 to consult the accounts of the company they set up when they collectively bought the freehold (I don't think this is a way of finding out but would be very happy to hear that it was).

Different negotiating strokes - I'd like to know if there's a very simple way of acquiring the advantage of extra knowledge in the negotiation.

pbrichard

Naf wrote: »

Wouldn't land registry show it?

Thanks v much for the suggestion, I have no idea, so I'll check into it

ValHaller

pbrichard wrote: »

.... Different negotiating strokes - I'd like to know if there's a very simple way of acquiring the advantage of extra knowledge in the negotiation.

There is no advantage. If they paid £100k between them and they want £50k off you for a 20% share, then £50k is what you will have to pay

Naf

ValHaller wrote: »

There is no advantage. If they paid £100k between them and they want £50k off you for a 20% share, then £50k is what you will have to pay

Not necessarily. The OP has a point that knowing this might help them negotiate. If 50k was paid for the freehold, then at least they know what the bottom line is as far as 'cost price' (I'm sure there's a better term that's just not coming to me...) is concerned. If 50k was paid, then between them they paid 10k for the OP's current leasehold so its reasonable to assume they won't go below that; and could potentially be bartered down to that, or close to it, regardless what they want.
You could, of course, be right and it will do the OP no good in the end; but its certainly an avenue worth pursuing given the potential money it could save.

OP: the land registry is definitely worth checking. Any time a property is sold it is updated with details of the owner and purchase price. It'll probably cost something like £7 to get the information you want from their website.

Land_Registry

pbrichard wrote: »

Thanks v much for the suggestion, I have no idea, so I'll check into it

The 'price paid' will often appear on the register providing the sale/transfer took place after 2000. Our online Practice Guide 7 explains this in more detail

You can check online or by post - details of how to do so are here. If the freehold register is available online then it costs £3 to view/download (£6 by post).

pbrichard

Naf wrote: »

Not necessarily. The OP has a point that knowing this might help them negotiate. If 50k was paid for the freehold, then at least they know what the bottom line is as far as 'cost price' (I'm sure there's a better term that's just not coming to me...) is concerned. If 50k was paid, then between them they paid 10k for the OP's current leasehold so its reasonable to assume they won't go below that; and could potentially be bartered down to that, or close to it, regardless what they want.
You could, of course, be right and it will do the OP no good in the end; but its certainly an avenue worth pursuing given the potential money it could save.

Exactly. There's an analogy with buying a house. Some people put it on the market for £200k and won't budge. Others will accept less because they need the money quickly, etc. If the house next door sold for £180k, that knowledge could give you leverage with those prepared to negotiate. A few quid investment in that knowledge could save you a lot of money. And that's the point, right? I saved £25k when I bought my flat by not paying the asking price!

(And incidentally if someone says, when asked how much they want, that "it's up to you to make us an offer", then that is an open invitation to haggle in my view.)

OP: the land registry is definitely worth checking. Any time a property is sold it is updated with details of the owner and purchase price. It'll probably cost something like £7 to get the information you want from their website.

With regards to the Land Registry, and the comments of the person who works for them, I wonder if we are discussing at 'cross-purposes'? I understand that the Land Registry records the sale price of the property (if available) when ownership of the property changes, but would it also record the sale price of a freehold on the property if the owner of the property has not actually changed?

Again, I may be confusing matters - when I say 'owner of the property', I mean the person who was the leaseholder who, by a legal transaction, becomes the freeholder. Although technically they don't become the freeholder, because actually a company of which they are a director becomes the freeholder...

Admittedly it would only cost me a few pounds to find out, but are two things getting mixed up? It may be that I wasn't clear in my original post.

In any case, I checked on the Land Registry website and there are 6 entries for my building (one for the whole address, the other 5 for each individual flat) - each offering information about leasehold and freehold tenure. However, while the entry for each Leasehold says "Price Paid/Value Stated Data: Yes", for each Freehold it says "Price Paid/Value Stated Data: No". Which suggests to me that the price they paid was not reported to the Land Registry...?

Thanks again for taking the time to reply!

Land_Registry

pbrichard wrote: »

With regards to the Land Registry, and the comments of the person who works for them, I wonder if we are discussing at 'cross-purposes'? I understand that the Land Registry records the sale price of the property (if available) when ownership of the property changes, but would it also record the sale price of a freehold on the property if the owner of the property has not actually changed?

Again, I may be confusing matters - when I say 'owner of the property', I mean the person who was the leaseholder who, by a legal transaction, becomes the freeholder. Although technically they don't become the freeholder, because actually a company of which they are a director becomes the freeholder...

Admittedly it would only cost me a few pounds to find out, but are two things getting mixed up? It may be that I wasn't clear in my original post.

In any case, I checked on the Land Registry website and there are 6 entries for my building (one for the whole address, the other 5 for each individual flat) - each offering information about leasehold and freehold tenure. However, while the entry for each Leasehold says "Price Paid/Value Stated Data: Yes", for each Freehold it says "Price Paid/Value Stated Data: No". Which suggests to me that the price they paid was not reported to the Land Registry...?

Thanks again for taking the time to reply!

Sorry if we ended up at cross-purposes. I was really referring to the original purchase of the freehold you mentioned which was prior to your own purchase but you mention a company.

If they, as in individual leaseholders, bought it after 2000 then there may well have been a price paid entry on the register. However as your search result states No against the freehold then you are correct that no entry appears.

However if there is a company set up to own the freehold then that company name will remain on the register and each new leaseholder takes over as a director and the share certificate or similar is passed to them - is that what the situation is here?

A copy of the transfer whereby the freehold was purchased may be available which in turn contains the purchase price - however I suspect this will be too old to be of any relevance now?

NB the property listings you received when searching will refer to leasehold/freehold tenure in each case and should also contain a Note re duplicate entries, namely the freehold is repeated against each

Naf

pbrichard wrote: »

Exactly. There's an analogy with buying a house. Some people put it on the market for £200k and won't budge. Others will accept less because they need the money quickly, etc. If the house next door sold for £180k, that knowledge could give you leverage with those prepared to negotiate. A few quid investment in that knowledge could save you a lot of money. And that's the point, right? I saved £25k when I bought my flat by not paying the asking price!

(And incidentally if someone says, when asked how much they want, that "it's up to you to make us an offer", then that is an open invitation to haggle in my view.)

With regards to the Land Registry, and the comments of the person who works for them, I wonder if we are discussing at 'cross-purposes'? I understand that the Land Registry records the sale price of the property (if available) when ownership of the property changes, but would it also record the sale price of a freehold on the property if the owner of the property has not actually changed?

Again, I may be confusing matters - when I say 'owner of the property', I mean the person who was the leaseholder who, by a legal transaction, becomes the freeholder. Although technically they don't become the freeholder, because actually a company of which they are a director becomes the freeholder...

Admittedly it would only cost me a few pounds to find out, but are two things getting mixed up? It may be that I wasn't clear in my original post.

In any case, I checked on the Land Registry website and there are 6 entries for my building (one for the whole address, the other 5 for each individual flat) - each offering information about leasehold and freehold tenure. However, while the entry for each Leasehold says "Price Paid/Value Stated Data: Yes", for each Freehold it says "Price Paid/Value Stated Data: No". Which suggests to me that the price they paid was not reported to the Land Registry...?

Thanks again for taking the time to reply!

Just to try and get straight what's happened; someone owned the whole building and leased five separate flats out within the overall property. At some point before your lease began, four of the leaseholders (the four still remaining in the property other than yourself) banded together, formed a company with themselves as directors and purchased the freehold for the building, becoming the outright owners. They continue to offer leasehold that you currently hold pretty much as it was before their purchase?
If that's right, then it looks like you're just unlucky that LR doesn't have the sale price listed. I'm not aware of any other method of getting it other than to ask. Unless you can find details of the previous owner of the freehold (not certain if this is on LR?), and see if they will tell you.