Offered freehold by landlord.

eddddy

Deleted_User wrote: »

...
Also as there are three of us buying the freehold and it leaves 1 person that hasn't what is the situation with this?

Does the 4th person get away with just a peppercorn rent and maintenance etc as and when like us the freeholders or can we charge her more?
...

The terms of the 4th persons lease doesn't change just because 'you three' (or anyone else) buys the freehold.

So the 4th leaseholder will have to still do whatever the lease says they must do - including paying ground rent as specified in the lease, a share of maintenance as specified in the lease etc.

Similarly the freeholder ('you three') will also have to do whatever the lease says - like maintain the building, insure it, charge whatever ground rent it specifies in the lease.

Plus you will be bound by all the relevant legislation. For example, if you want to do 'major works' (i.e. repairs), you three as freeholders would have to go through a section 20 consultation with the 4th leaseholder.

(The terms of your 3 leases don't change either, but as freeholders and leasholders you can allow yourselves to vary the leases - or allow yourselves to just ignore some of the terms if you want.)

[Deleted User]

OK agreed thank-you.

The point is the management agency will be no more as we have to give them notice(as there charging £895 to 'manage the property' we will now be freeholders and can expel the high fees etc. I realise this is more complex(setting up a company etc...)and I also presume the 4th lessee will be on the same terms as previously stated in the lease?
Obviously 'us three' would like to include the 4th lessee but she has no available funds so this is the only way forward.

I realise this is more complex and obviously will be seeking legal advice.

eddddy

Deleted_User wrote: »

...
The point is the management agency will be no more as we have to give them notice...

That's unusual.

The managing agent's contract will be with the current freeholder, not with you. So the current freeholder would pay them any termination fee.

Or is there some special clause in the sale that says you have to take over the contract with the managing agent?

Or is the freeholder just arbitrarily separating out the £895, to make it look like you're buying the freehold for £895 less?

(In the same way as he might sell you the lease for £50 less, but also say that you have to pay him an extra £50 to buy a new pair of trousers!!!)

[Deleted User]

eddddy wrote: »

That's unusual.

The managing agent's contract will be with the current freeholder, not with you. So the current freeholder would pay them any termination fee.

Or is there some special clause in the sale that says you have to take over the contract with the managing agent?

Or is the freeholder just arbitrarily separating out the £895, to make it look like you're buying the freehold for £895 less?

(In the same way as he might sell you the lease for £50 less, but also say that you have to pay him an extra £50 to buy a new pair of trousers!!!)

Sorry my mistake, I just presumed we would have to give a months notice etc.

No the offer is unconditional.£15250.

But like I stated before if 'we'put an offer in at £14k and he refuses are we possibly out of time as there is a week to go?

Anyway as discussed if 'us three' buy it we can charge the 4th tenant that has no dosh a 'reasonable' rate as specified in the lease?

Am I correct?

anselld

Deleted_User wrote: »

Anyway as discussed if 'us three' buy it we can charge the 4th tenant that has no dosh a 'reasonable' rate as specified in the lease?

Am I correct?

As far as service charges are concerned, as freeholder you need to account for the services provided and charge them fairly to all leaseholders.

Thus, whatever you charge her you must charge yourselves the same and that must be correctly reflected in the accounts. If you can provide services cheaper that is fine, but all leaseholders benefit regardless if they share the freehold.

The only benefits of owning a freehold share are control over decision-making and recovering your ground rent (which you paid in the first place).

princeofpounds

If there is a provision for a service fee in the lease then yes you can.

But you do not technically charge the fourth tenant alone. You charge the leaseholders, including yourselves.

Now I am sure that many in this situation simply don't invoice themselves, but it's not *strictly* the right way to think about it and it is important to be clear that's you are both a freeholder AND a leaseholder. Two legally separate statuses.

[Deleted User]

princeofpounds wrote: »

If there is a provision for a service fee in the lease then yes you can.

But you do not technically charge the fourth tenant alone. You charge the leaseholders, including yourselves.

Now I am sure that many in this situation simply don't invoice themselves, but it's not *strictly* the right way to think about it and it is important to be clear that's you are both a freeholder AND a leaseholder. Two legally separate statuses.

OK thanks.

Just was thinking I don't feel its fair that 'the 3 residents' stump up the cash and the fourth resident has no funds and also benefits.(although I guess the freehold is an investment hopefully)

But I get the idea of 'strictly' thanks.

At the end of the day we are all paying 4x£200 ground rent £1200 a year which includes water rates and building insurance. So say £5600 divided by 4 flats.

Now 'we 3' residents stump up the cash for the freehold and the 4th resident gets a decent deal without paying £1400 a year service charge(i appreciate there is a sinking fund) and maintenance when we invoice her and the £200 ground rent..So probably maybe £500 a year and at least a grand better off..

Maybe I'm getting confused lol.

Thanks everyone.Much appreciated.

anselld

Deleted_User wrote: »

Maybe I'm getting confused lol.

Yes. You seem to be making up random numbers which make absolutely no sense.

[Deleted User]

anselld wrote: »

Yes. You seem to be making up random numbers which make absolutely no sense.

At the end of the day we are all paying 4x£200 ground rent £1200 a year which includes water rates and building insurance. So say £5600 divided by 4 flats.

4x£1200 a year (service charge)
4x£200 a year ground rent

=£5600

Correct?

anselld

Deleted_User wrote: »

At the end of the day we are all paying 4x£200 ground rent £1200 a year which includes water rates and building insurance. So say £5600 divided by 4 flats.

4x£1200 a year (service charge)
4x£200 a year ground rent

=£5600

Correct?

Yes, if you say so.