freeholder giving it away to leaseholders

Chapperss

Hi all,

Some advice needed.

Looking at purchasing a flat that is in a old 1930s block with12 others. The estate agent informed us during the virewing that the freeholder is giving the freehold to the leaseholders (share between the 12 flats).

I've been told this is his only property but I'm struggling to understand why he is doing this. Am I over thinking (as of course the EA is saying how amazing a thing that is) or is it as good as it sounds?

Current leaaee is 107 years.

Any help greatly appreciated.

Cheers

steve2005

Does sound odd, considering he (his family) could offer to renew the lease at all the flats at any time for an income boost.

cattie

Perhaps he doesn't have any family & is finding being responsible for the upkeep & maintenance of the block too much for him, especially if he is getting on a bit.

By handing over the freehold, the leaseholders will need to form themselves into a company with each leaseholder holding 1 twelfth of a share each & then be responsible collectively for buildings insurance & all upkeep/maintenance of the block.

Estate agents don't always get things right, especially when relying on the vendor for information, so this would be something your solicitor would look into if you decide to buy.

Chapperss

Yes. I've read about the ramifications and how getting 12 peeps to agree on something could be a pain.

As some extra detail they ate planning to build 6 extra flats either side of the development and redo the roof, Pointing's on chimneys and redo the indoor communal areas.

Its all quite confusing and a lot to make sense of as to how it will affect the value and regular outgoings of the flat..

Richard_Webster

There won't be any serious money in charging for lease extensions for 25-30 years.

The ground rents could be low and not worth collecting. There could be wording in the leases that puts onerous obligations on the freeholder. For instance, some early flat leases obliged the freeholder to maintain and insure the structure and allowed him to charge for doing so in arrears, after work was done and insurance paid, giving the freeholder cash flow problems.

So there could be all sorts of reasons why freeholder decided it was just too much hassle. Maybe he had offered the block on the open market and had no takers?

Chapperss

Interesting, something to check cheers.

propertyman

Chapperss wrote: »

As some extra detail they ate planning to build 6 extra flats either side of the development and redo the roof, Pointing's on chimneys and redo the indoor communal areas.
.

So there is your answer :money:

I get to build my new flats and I give you the freehold to buy you off and not object to planning or the noise.

Chapperss

propertyman wrote: »

So there is your answer :money:

I get to build my new flats and I give you the freehold to buy you off and not object to planning or the noise.

Now that makes sense! Cheers