Extending leases when owning the freehold

jbt

Hello,

I own the freehold to two flats, and i know i have the lease on the ground flat. i live in the top flat. I was looking at the the title deeds last night when i noticed that my flat has a lease on it, There is 69 years left,

If i want to extend the lease then would i just be paying for solicitor fees?

Is it possible to extend with using a solicitor?

Thanks
J

anselld

Are you sure you personally own the freehold? I could be wrong but I thought it was not possible to own the freehold and lease to yourself.

Most leaseholders who own the freehold actually own a share of the freehold via a Limited Company etc.

jbt

Thanks,
This is the confusing part, if i own the freehold do i lease to myself?
the ground floor flat is leasehold and i definitely own the freehold.
the ground floor flat pays me ground rent annually.

In the future i will want to sell my flat, i was thinking to get the freehold what would be the best way, set up a company or use and company that looks after leases.

G_M

anselld wrote: »

Are you sure you personally own the freehold? I could be wrong but I thought it was not possible to own the freehold and lease to yourself.

Most leaseholders who own the freehold actually own a share of the freehold via a Limited Company etc.

The freehold and the (2) leaseholds are entirely separate legal entities. They can be owned by totally separate people (or companies), or a single person/company can own two or more of them.

I own the freehold to two flats, and i know i have the lease on the ground flat. i live in the top flat. I was looking at the the title deeds last night when i noticed that my flat has a lease on it,

So if you look up the address on the Land Registry website, there is
* a freehold to the building, in your sole name?
* a lease to the lower flat, in your sole name, but lived in by...... a tenant?
* a lease to the top flat, in your sole name, lived in by you?

Is it a two flat building?

If you wish to extend your lease I would recommend using a solicitor, but then I am no expert and have never done this. Perhaps it is possible/easy to DIY. Go to the library and get a book out on the subject.

edit:

This is the confusing part, if i own the freehold do i lease to myself?
the ground floor flat is leasehold and i definitely own the freehold.
the ground floor flat pays me ground rent annually.

In the future i will want to sell my flat, i was thinking to get the freehold what would be the best way, set up a company or use and company that looks after leases.

You are definately confused about free/leaseholds - so do not DIY!

KiKi

jbt wrote: »

Thanks,
This is the confusing part, if i own the freehold do i lease to myself?

In effect, yes!

Freeholds and leaseholds (as the other poster mentioned) are completely separate, legally. I used to live in a property with three flats. The three owners (inc me) owned 33.3 of the freehold each. And we effectively leased to ourselves.

the ground floor flat is leasehold and i definitely own the freehold.
the ground floor flat pays me ground rent annually.

Just to check, you do know that as the freeholder you have to purchase buildings insurance for the whole property (not just your flat because you can't buy buildings insurance for your flat alone)? And you have to charge the relevant proportion to the ground floor flat (the amount you charge to them depends on the percentage written in their lease, eg 50%). And any work you have done to any communal areas, usually including the roof, walls, windows (unless your / their lease specifies otherwise) needs to be split cost-wise between the proportions set out in the leases?

In the future i will want to sell my flat, i was thinking to get the freehold what would be the best way, set up a company or use and company that looks after leases.

If it's only two flats, I wouldn't do that. As you're the only freeholder, what I'd do is just keep a record of ALL freehold costs relating to the building. This should include buildings insurance, any fire alarm costs / tests if relevant, any works done which are chargeable (read the leases to see what each flat is responsible for). Then if you sell it on with the full freehold, you can hand over the spreadsheet of costs, that's perfectly acceptable. It's what I've done in the past and it's worked well.

However, if you don't know what you're responsible for as a freeholder, maybe you're better off getting someone else to manage it for you - but you'll have to pay. And then whoever is managing the freehold for you, they will charge YOU and the downstairs owner as the leaseholders for all the relevant costs, inc any charges for managing the freehold.

eddddy

If you own the freehold of the building and you also own the leasehold of one of the flats, you are free to extend the lease, or vary the lease in any way you wish.

You can even tear up the lease and create a new one, if you want.

Except that...

- if you have a mortgage, the lender will have to approve any changes (but I can't see them objecting to a simple extension).

- you cannot change the lease in a way that breaches/conflicts with the covenants in the other leaseholders lease

But, obviously, the situation is very different if you jointly own the freehold with someone else.

It would be best to get advice from a solicitor. If you mess up the changes, it might make the flat unsaleable.

G_M

OP appears to own freehold and both leases.......

I own the freehold to two flats, and i know i have the lease on the ground flat. i live in the top flat. I was looking at the the title deeds last night when i noticed that my flat has a lease on it,

Having said that, OP does not seem to understand what a lease is and what a freehold is, so may be mistaken. Hence my questions in post 4 above.

jbt

anselld wrote: »

Are you sure you personally own the freehold? I could be wrong but I thought it was not possible to own the freehold and lease to yourself.

Most leaseholders who own the freehold actually own a share of the freehold via a Limited Company etc.

Yes i definitely own the freehold and have the lease with the ground floor flat.

jbt

eddddy wrote: »

If you own the freehold of the building and you also own the leasehold of one of the flats, you are free to extend the lease, or vary the lease in any way you wish.

You can even tear up the lease and create a new one, if you want.

Except that...

- if you have a mortgage, the lender will have to approve any changes (but I can't see them objecting to a simple extension).

- you cannot change the lease in a way that breaches/conflicts with the covenants in the other leaseholders lease

But, obviously, the situation is very different if you jointly own the freehold with someone else.

It would be best to get advice from a solicitor. If you mess up the changes, it might make the flat unsaleable.

This is great info and the answer i was hoping for. Thanks for your help

jbt

KiKi wrote: »

In effect, yes!

Freeholds and leaseholds (as the other poster mentioned) are completely separate, legally. I used to live in a property with three flats. The three owners (inc me) owned 33.3 of the freehold each. And we effectively leased to ourselves.



Just to check, you do know that as the freeholder you have to purchase buildings insurance for the whole property (not just your flat because you can't buy buildings insurance for your flat alone)? And you have to charge the relevant proportion to the ground floor flat (the amount you charge to them depends on the percentage written in their lease, eg 50%). And any work you have done to any communal areas, usually including the roof, walls, windows (unless your / their lease specifies otherwise) needs to be split cost-wise between the proportions set out in the leases?



If it's only two flats, I wouldn't do that. As you're the only freeholder, what I'd do is just keep a record of ALL freehold costs relating to the building. This should include buildings insurance, any fire alarm costs / tests if relevant, any works done which are chargeable (read the leases to see what each flat is responsible for). Then if you sell it on with the full freehold, you can hand over the spreadsheet of costs, that's perfectly acceptable. It's what I've done in the past and it's worked well.

However, if you don't know what you're responsible for as a freeholder, maybe you're better off getting someone else to manage it for you - but you'll have to pay. And then whoever is managing the freehold for you, they will charge YOU and the downstairs owner as the leaseholders for all the relevant costs, inc any charges for managing the freehold.

Thanks for all the info,

Great idea to run a spreadsheet of all the costs for the building, I don't so will start this. I do have a paper trail with all building insurance and all maintenance costs. I like the idea of handing over a spreadsheet to show all the work done and showing what cost are involved in owning the freehold.

All great info thanks again

anselld

jbt wrote: »

Yes i definitely own the freehold and have the lease with the ground floor flat.

So who lives in the ground floor flat and under what arrangement?

"have the lease with the ground floor" is still a vague terminology.

Do you mean ...
You own the freehold for the entire block and live on the top floor.
The ground floor is leased to someone else who lives there, ie a leaseholder.

If so you are the freeholder, you do not own the leasehold.

If not, who lives on the ground floor an how do they pay for that?