Loft extension on flat: unclear lease / best to buy freehold?

zoothornrollo_2

I own the first floor flat in a terrace and have a 113 year lease - downstairs has a 106-year lease; the freeholder is a third party. We pay £120 ground rent a year and nowt else - although they have just started billing us out of the blue for buildings insurance.

I want to extend into the loft. I have the demise of the roof and sole access to the loft, but property lawyers have warned that - contrary to all sane thinking - that does not necessarily mean that I own the loft void. My lease is poorly drafted - but it does not clearly say that I do own the loft void. Neither does it say I don't. The loft is not included in the floor plan attached to the lease.

It seems I have two choices: 1) approach the freeholder for permission / licence to alter as if I do own the loft and see what happens; or 2) start to try and buy the freehold by serving notice along with downstairs.

Problem with 1) is - it will alert them to my intentions and give the freeholder ammo in valuation negotiations if we were to try and enfranchise. Even if they agree and ask for just a nominal fee: I would presumably want to have something in writing that they have therefore agreed the loft void is mine to prevent any rumpus when I come to sell?

Problem with 2) is, it's expensive and probably not worth it given lengths of leases on the flats. Freehold is probably valued at £4k max but fees will probably double that.

Any advice would be much appreciated.

eddddy

Unless the freeholder is very dopey - I doubt they will sell you a lease on the loft space for only a nominal fee.

(If you do 'buy' the loft space, you will have a formal variation of lease - so you should have no problems when you come to sell. But expect to pay £1k in legal fees to get the variation drawn up.)

If you and your neighbour jointly buy the freehold, then your neighbour would effectively own half the loft space. So you would have to 'buy out' your neighbour's 50%.

If your neighbour is dopey - he/she might accept a low price for their 50%. But equally, he/she could just flatly refuse to let you convert the loft.

zoothornrollo_2

Thank you Eddy.
But in a situation where I say my lease does already include the loft and the freeholder says 'oh no it doesn't', then where does one go from there?
Also does anyone know the downsides (if any) of making a reasonable offer for the freehold direct to the freeholder - without serving notice or having a formal valuation done?
Thanks again.

princeofpounds

My lease is poorly drafted - but it does not clearly say that I do own the loft void. Neither does it say I don't.

For you to own it, it has to say you DO own it. Anything not demised to you remains property of the freeholder, it doesn't have to say that.

Agree it's a bad drafting, and I don't know what a tribunal interpretation would be.

Also does anyone know the downsides (if any) of making a reasonable offer for the freehold direct to the freeholder - without serving notice or having a formal valuation done?

About the only thing I can think of is that it might 'wake them up' if you prefer they continue to be benignly neglectful. But that's normally only a problem if you are doing something that breaches the lease, like occupying a balcony or loft space that isn't yours.

They can make a silly demand, but you always have the LVT route as plan B.

I'd go for the freehold, if you get on with your neighbour and know they won't block a variation. It's not a large amount of money if split 50/50, for a whole new room.

zoothornrollo_2

princeofpounds wrote: »

About the only thing I can think of is that it might 'wake them up' if you prefer they continue to be benignly neglectful. But that's normally only a problem if you are doing something that breaches the lease, like occupying a balcony or loft space that isn't yours.

They can make a silly demand, but you always have the LVT route as plan B.

I'd go for the freehold, if you get on with your neighbour and know they won't block a variation. It's not a large amount of money if split 50/50, for a whole new room.

Thanks PoP - we do get on, and had a v productive chat about it
last night. She is fine to split the freehold and with my plans for the loft.

Just a couple of things regarding your post if I may:

1) I was imagining that if we cannot come to an agreement on price by dealing with the freeholder directly / informally, then we would have to serve notice and get a valuation done - not necessarily go straight to an LVT. Once notice has been served backed by a valuation, then I'd imagine the freeholder more likely to accept a reasonable offer and LVT would hopefully not be necessary.

2) Valuing - I am confused by various online calcs / formulas as to whether they pertain to the value of the freehold as a whole, or the value to me as just one of the flats. For instance on the relevant MSE page it says:

As a rough rule of thumb, the cost of a share of the freehold for one flat (excluding legal fees) is similar to the cost of extending a lease by 90 years. Just plug your details into the Lease Extension Calculator our to see how much that would cost - it automatically assumes you will add 90 years.

That gives me a fig of £3k-4k - but I am sure elsewhere that is the figure I have been given as an estimate for the freehold as a whole!?

We would like to get a decent estimate of how much the freehold is worth before we contact the freeholder - without having to fork out a grand in valuation fees...
Any ideas?

princeofpounds

Once notice has been served backed by a valuation, then I'd imagine the freeholder more likely to accept a reasonable offer and LVT would hopefully not be necessary.

Sure. Just depends on how reasonable your freeholder is.

I am confused by various online calcs / formulas as to whether they pertain to the value of the freehold as a whole, or the value to me as just one of the flats.

Can't comment on every calculator out there!

The value of the freehold could be approximated by cost of 90yrs extension x number of flats. But then as you buy as a group, divide by the number of buyers, which is typically, but not always, the same as the number of flats.

£3-4k sounds like it would only be for your flat.

zoothornrollo_2

OK thanks - we would presumably have to engage a lawyer to oversee the transfer of funds / papers etc; to officiate the actual transaction?

princeofpounds

K thanks - we would presumably have to engage a lawyer to oversee the transfer of funds / papers etc; to officiate the actual transaction?

Yes (although technically no, you probably don't have the skills to do it yourself).

zoothornrollo_2

Or the time.
We would also need to draw up a declaration of trust etc for the new share of freehold arrangements (rather than go down the company route, which seems a bit pointless for two people).
Anyone out there who has knowledge of calculating freehold values please give us a shout - I'm currently looking at guesstimates of anything from £3.5k to £9k for this blasted thing ...
Thanks

zoothornrollo_2

{subtle bump}