Buying freehold from leaseholders

hjf12345

My wife and I own a leasehold flat in a block of 4 flats - flat No.2. About a year before we bought the flat (in 2010), two of the other flat owners (flats 1 and 4) bought the freehold for the block from the previous absentee freeholder after taking it to a tribunal with the council.

Along with the other flat owner (no.3), my wife and I have suggested to the two freeholders that we now split the freehold between all 4 flats. However, they have said they 'do not wish to sell (a proportion of) their share of the freehold' to us.

Can anyone shed any light on what rights we have? I know there is a rule about allowing 50%+ of the flat owners to contest the ownership, but I assume this is generally when the freeholder is not also an owner.

Any advice would be gratefully received!

Thanks

TrickyDicky101

How long is your remaining lease term? Ground rent? Escalation clauses for GR?

G_M

http://lease-advice.org/publications/documents/document.asp?item=11

http://www.lease-advice.org/information/faqs/faq.asp?item=165

There seems to be no bar based on the current ownership of the freehold, but check with LA.

hjf12345

The lease is 93 years. There is no ground rent paid. It all seems to be managed in an ad-hoc way. ie, no service charge but everyone contributes to occasional upkeep of the block (eg, gardening) and goes 4 ways on the buildings insurance.

I've read through the links you supplied - thanks. I guess my next step is speak to LA.

TrickyDicky101

Have the freehold owners explained why they do not wish to sell at this time?

The remaining lease seems reasonably long and with no GR there wouldn't appear to be a huge amount of intrinsic value in the F/H (unless there are other reasons for wanting it ie ability to extend the flats).

Good luck with this.

G_M

Are you sure there's no ground rent? Have you read the lease thoroughly.......?

Or is it that they just don't collect it?

Bossypants

G_M wrote: »

Are you sure there's no ground rent? Have you read the lease thoroughly.......?

Or is it that they just don't collect it?

Echoing the need to check this, in principle you can't have a lease without rent. It may be that it has been reduced to practically nothing, i.e. a nominal sum or 'peppercorn', but it almost certainly will be in there somewhere, and if it is, it is in your best interests to pay it.

Fraise

TrickyDicky101 wrote: »

Have the freehold owners explained why they do not wish to sell at this time?

The remaining lease seems reasonably long and with no GR there wouldn't appear to be a huge amount of intrinsic value in the F/H (unless there are other reasons for wanting it ie ability to extend the flats).

Good luck with this.

A 93 year lease is dangerously short.

Any lease with less than 80 years to run will be difficult to sell. Banks don't like lending on short leases, and 80 years is short.

The freeholders of the other two flats won't want to sell share if the freehold to the OP as in 13 years time they can charge a huge amount to renew the lease!!

So there's a very good reason why they don't want to sell a share if the freehold.

I know once a leaseholder has lived at a property for two years they are entitled to buy the freehold (or maybe share of), but I'm not sure if they can do that if the freeholder doesn't live at the premises. In fact, I've a feeling they can't, but I may be wrong.

The OP needs to contact the Lease Advisory Bureau and they will put him/her on the right path.

TrickyDicky101

Fraise wrote: »

A 93 year lease is dangerously short.

Any lease with less than 80 years to run will be difficult to sell. Banks don't like lending on short leases, and 80 years is short.

The freeholders of the other two flats won't want to sell share if the freehold to the OP as in 13 years time they can charge a huge amount to renew the lease!!

So there's a very good reason why they don't want to sell a share if the freehold.

.

That isn't a reason not to sell a 'share' of the freehold though - but it is a reason to increase the price at which they would sell.

I'd still like to hear why the freeholders don't want to sell a share. It could well be because they expect to make a windfall in however many years' time.

Fraise

TrickyDicky101 wrote: »

That isn't a reason not to sell a 'share' of the freehold though - but it is a reason to increase the price at which they would sell.

I'd still like to hear why the freeholders don't want to sell a share. It could well be because they expect to make a windfall in however many years' time.

Of course it's a reason not to sell the freehold - in just 15 years from now they're going to make a big packet of money extending the OP's lease!

Neither can they determine how much to sell part of the freehold for (IF they chose to sell) as freehold values are determined by property prices.

A leaseholder can buy the freehold after living at the premises for two years, but if the freeholders live at the property they don't have to sell it.

Finally, as I said before it's obvious why they don't want to sell the freehold - the leaseholder has a very short lease of effectively just 15 years, as after that period his place could be unreliable without a lease extension. Banks will advise people never to touch a property that has a lease less than 125 years. If you're REALLY lucky and get a lease for 999 years you're laughing, but they're rare to find and if you do find one you pay a premium.

TrickyDicky101

Fraise wrote: »

Of course it's a reason not to sell the freehold - in just 15 years from now they're going to make a big packet of money extending the OP's lease! If the freeholders chose to sell a 'share' then they would price it to include their expectations of future 'profits'

Neither can they determine how much to sell part of the freehold for (IF they chose to sell) as freehold values are determined by property prices.The price would be determined by the vendor and buyer assessing what benefit the freehold has to them. Part of that assessment would likely include potential future cash flows from any lease extension

A leaseholder can buy the freehold after living at the premises for two years, but if the freeholders live at the property they don't have to sell it.

Finally, as I said before it's obvious why they don't want to sell the freehold - the leaseholder has a very short lease of effectively just 15 years, as after that period his place could be unreliable without a lease extension. Banks will advise people never to touch a property that has a lease less than 125 years. If you're REALLY lucky and get a lease for 999 years you're laughing, but they're rare to find and if you do find one you pay a premium.93 years is not a short lease. It is shorter than 999 years or 125 years but that does not make it short. Hopefully the OP will return and will be able to tell us what the current f/h objections to selling are

Let's hope the OP returns and can enlighten us further.