Buying appartment leasehold from miller

padfoot

I moved into a new miller homes apartment 2 years ago and have just received a letter saying that miller are selling the freehold to our apartment block.

Not sure if this is good, bad or indifferent. I know that if we get at least 51% of the flats involved we have the right to buy the freehold ourselves for the same price but was just wondering if anyone has had any experience of this situation and if it would be worth purchasing. More importantly are there any major negative involved with this sale i.e. can the new owner change the terms.

We currently pay £150(doubles every 20 years) a year and to buy the freehold it would be about £3000 each. So financially it only stacks up if people intend to keep for at least 20 years, assuming terms can not be changed by new owner!

Any help and advise would be much appreciated

propertyman

When an offer is made under the right to first refusal, you might ask who they intend to sell to. The identity of the buyer in the wings and their agents may be a key to you deciding to act or not- eg XXXX not them they are *&^%£$£%^ !:eek::)

Owning the freehold means that the upkeep of the building lies with residents, a curse and a blessing in terms of the work that some has to do, along with the benefit of choice and control.

It does not however as popularly believed give people the freehold of their flats or “ we become share of freehold” as there is no such thing. You will all have leases, and in most cases simply have a share in or be a member of a company that owns the freehold.

If your leases are 125 years and up ( or likely 122 odd) the need to extend is one that is far off in the future and while you might still have to pay ground rent, rather than write a cheque to the freeholder, the residents might prefer to simply exercise the right to manage, which passes control into their hands at no cost( save legal costs time and effort etc) and keep their money.

ethank

Normally they will tell you who they intend to sell to, and in very many cases they have a property management company they work with. I know that for Taylor Wimpey - they seem to have work with Trinity.

patman99

You ask is it worth buying the freehold. Well, if the residents all act together and buy the freehold then they can have full control over the management of the site and can set the service charge. They can also set the fee for extension to the lease (and can even agree to extend all leases to 999 years at no cost if they so wish).

If another company buys the freehold, then they will want to make back their money and then some. They can charge several £1k for a lease extension.

Richard_Webster

It is really about you and the others together being in control, rather than possibly some unsavoury property company .

Although there are legal restrictions on this, they find all kinds of ways in practice to up the service charge levels and charge high admin fees for other things like consent to sublet and information packs required when you sell. They can often get away with it because people don't bother to challenge or the cost of doing so is more than the saving that would be achieved.

Also although you should take on board Propertyman's warnings about terminology - "shared freehold", etc., the reality is that flats where the freehold is owned by the residents are worth slightly more than others.

propertyman

My concern was not so much about terminology but that people's motivations are misguided in believing that they are getting a share of freehold flat.

Not only does no such thing exist, but that term is associated with being freed from a lease and the restrictions and obligations that come with it, particularly on service charges and lease extensions, and in many instances a belief that they can act ( or not) without regard to others.

Both lead to considerable problems for owners when they believe that.

Indeed where ownership or control is vested in the residents there is a premium or attractive quality to that, however as I point out it is both a blessing and a curse, in part because owners do not realise how much work is required, what things that need to be done aren't, gotten wrong, and have no concept of the tyranny of "the committee"

Agent's and landlord's reputations can be important as it does add value to a block, in part as residents are comfortable with them in terms of trust, feel that they will be consulted and listened to, and can spend their time living their lives than spending Sunday afternoon dealing with solicitors enquiries....