Shared Freeholds and Leaseholds

millardus

Hey all

I'm just abt to put an offer in for a Garden apartment, which I believe the agent has now confirmed is a Shared Freehold and with a 125 year Leasehold on it (Took a few days for this to get investigated!).

I believe, this being the case, that it is not a risky proposition for a mortgage lender and fits into a standard mortgage category. I received the following information, is there anything particularly worrying or risky about this? I know I can pull out if the lawyers find anything odd or the mortgage company don't like the facts, but I'd have spent money by that point! Any advice?


"Hopefully now got to the bottom of the lease situation -it does seem that it is the lease you saw on the Land Registry web-site - 125years running from 1986.

From what I can gather, a company called "X Limited" owns the freehold and there are 8 "ordinaryshares of "1 each", Mr Y holding one of these. (I seem to rememberthe lady who Mr Y put me in touch with saying that although there are 7flats, the top floor flat is two knocked into one, so I guess they hold twoshares). There was a staggered rising ground rent in place but I'm told thishasn't been collected for a number of years, which makes sense as you'deffectively be paying ground rent to yourselves!"

G_M

Perfectly nrmal arrangement.

The only thing worth checking is how effective the company "X Ltd" is at manageing the building. It will only be as eective as the owners of the flats. If they are all absent landlords letting their flats out, or young FTBs with no idea and no money, they may ignore repairs and let the building deteriorate.

they may not bother collecting an annual service charge to cover maintenance and build up a fund for when a major expense arises (eg new roof).

On the other hand, they may be super efficient, keep costs sensible, and act collectively in a responsble manner.

Only way to find out is to ask. NOT the seller Mr Y - he will just reassure you. Knock on doors!

millardus

Thanks G_M, I'll do that.

Another query for you, just in case you have any insight.

It is sold as *Garden apartment*. Everything seems to suggest the garden is entirely ours, in that the person showing us round made that clear when we asked. Also, it is advertised as *Garden apartment* and the details refer to a desirable south-facing garden. Nothing as explicit as *private garden*, but it is sold as Garden apartment.

Anyhow, with a share of freehold arrangement, and this 97 year Leasehold status for the plot, do I need to in any way concern myself that the other 7 apartment holders have some kind of say in managing or accessing the garden?

They don't seem able to get access to it, no side-alleys or anything (well there is a long walk around to the back, and what appears to be a private gate at the back on an embankment)....but when referring to shared-freeholds and leases, I just wonder if legally there is something that allows these owners to *be involved*, or even use the garden through some weird clause?

Hopefully lawyers would know all of this, and I'll ask the question of them too.
M

hazyjo

'Garden flat' often refers to the floor it's on, not just the fact it has a private garden.

Definitely get solicitor to check the lease. Don't bother asking the EA or owner. You need proof of this and unfortunately you can't trust either to give you an honest, or knowledgeable, answer.

Jx

G_M

The wording on the lease will make clear

* if you have right of access to the garden
* if the garden is shared
etc

Read the lease.