Flats without leases - is this normal?

cowsnhope

Hi. I'm starting a new thread as my confusion has moved on to another issue :-)

My block has six flats. Three, including mine, have leases. The other three flats are owned by the freeholder and rented out. The managing agent has told me that the freeholder contributes to the service charges which cover shared costs such as fire alarm testing. My lease says what I pay (one third of the total costs for a flat occupying one sixth of the building) but the freeholder does not seem to have an agreement as he has no lease. Is this normal?

Many thanks

davidmcn

Yes, the freeholder owns everything which hasn't been leased. He can't have a lease with himself (and no reason why he would want to anyway).

eddddy

So I guess somebody owned a freehold building containing 6 flats and decided to sell leases on 3 of those flats...

Perhaps that's not typical, but there's no problem with it. (Except that it may make it difficult/impossible for you and the other leaseholders to compulsorily buy the freehold.)


And I think you're saying that your lease states that you're responsible for one third of the maintenance costs of your building, which you think is unfair...

TBH - that's what the lease said, and you decided to buy the lease, and so you chose to accept those terms. To be blunt, if you didn't like those terms, you shouldn't have bought the lease.

AlexMac

Seems OK to me, except for the way you describe the formula for cost-sharing. I was, in effect in the position of your leaseholder, albeit on a smaller scale, when I bought and for 3 years, owned a 3-storey Victorian freehold house, the lower level of which had previously been sold as a leasehold flat. I had no lease on my bit, which I let to tenants.

Assuming your lease is 'competent' (and if it isn't, your solicitor would have advised you when you bought) it will define what service charge you pay, and what the freeholder's (often referred to as 'the landlord' which seems confusing) obligations are; usually at least buildings insurance but often collective maintenance of exterior features or communal areas.

I find it difficult to believe that it would specify that you and the other two leaseholders each pay one third, not one sixth; that is that between you, you pay 100% of such shared costs, so that the freeholder pays nothing? If so, what is the Freeholder paying service charges for?

But if your lease specifies the freeholder's obligations, they are obliged to fulfil them, so that's OK? And you are obliged to pay whatever the lease says about annual contributions - which you were presumably happy with when you bought?

The crunch would come if the lease is imprecise about shared costs for major communal expenditure such as external decor, etc. If the freeholder tried to stuff you with one third of the costs of a new roof I presume you'd appeal or take legal action.

But it might be worth asking the solicitor who you used to buy the flat, or at least re-reading the lease and the original 'report on title' which they would have given you on purchase; after all, that's what you paid them for.

But overall, it seems a good sign that service charges are being collected, that (as you say) the freeholder is chipping in, and that they have appointed a managing agent (rather than bodging the job of insurances and statutory inspections). Good luck

G_M

Why start a new thread?

https://forums.moneysavingexpert.com/discussion/comment/70921487#Comment_70921487

cowsnhope

Quote
''I find it difficult to believe that it would specify that you and the other two leaseholders each pay one third, not one sixth; that is that between you, you pay 100% of such shared costs, so that the freeholder pays nothing? If so, what is the Freeholder paying service charges for?''

Yes this is my confusion - I've been told that the freeholder pays and I don't know the terms of the other leases so I don't know - my worry is indeed about major expenses not the normal charge.

It makes sense that the freeholder's obligation to pay or not is in my lease - I hadn't thought to look there but it's obvious now and I'll check when I finish work. Thank you