Buying my flat's freehold - any advice?

MissCreative

Hello! :hello:

I'm looking at buying the freehold of my flat (1 of 4 flats) and this is a big unknown area for me and my husband.

It's going to cost £9,600, plus solicitor's fees etc (so probably around £14,000 total - £3,500 per flat) and should save us at least £750 a year in management fees and ground rent costs. As we will be living at the flat for at least another 4 years (most likely 5-7 years) it seems to be a good deal as our lease only has only 108 years left anyway, and would increase the appeal of the flat when selling.
We're looking to create a company first, and then buy the freehold through the company, and all flats will have equal shares.

I was just wondering if anyone has gone though it before and has an advice or tips?

Anything we need to look out for legally or anything tips with how to manage the freehold after we've bought it?

Also wondering if it's good/bad being the managing director, and how much work there is when doing the company's taxes and annual balance statements?

Basically freehold-buying 101 :rotfl:

Thanks in advance for any help

Hoploz

You're still going to have to manage the block one way or another, either a willing volunteer from the owners or (independent) still use a managing agent.

That's a lot of money to spend up front, when your lease is still plenty long enough. What has brought this one, is everyone else up for splashing that cash as well? Are you being given first refusal before the LL sells to another company?

But you would save on the ground rent.

eddddy

You also need to think about how the new company will make decisions. Will it be a majority vote?

What happens if two leaseholders want the communal hall repainted and the other two don't?

Or if rainwater is leaking into your flat (and nobody else's), will the other three readily agree to contributing their own money to fix the leak into your flat? (Assuming that's what on what the lease requires.)

hazyjo

It's not always more appealing (although I like it).


Don't try to label your flat a 'freehold flat' as they're usually unmortgageable.


It will still have a lease. It is very basically a leasehold flat with a share in the company that owns the freehold.


It works well in small blocks/conversions. My first flat was like that, but one of 10. We used to get together over dinner in someone's flat to discuss anything. It gets tricky if one's let, or if someone doesn't want to pay, or thinks they can get away with a botch job or patch up. What common areas do you have?


Cheers,


Jx

MissCreative

Thanks everyone. Sorry I forgot to check back for a while!

The communal area I have is just a stairwell, nothing else. It's a 1920s conversion with only 4 flats - 1 flat with it's own separate entrance at the back.

Thanks for raising the dividing up money issues - I'll be sure to mention that at our next meeting and we'll look at how we'll decide on who will pay for what.
I'd guess if it's a building problem (namely outside or structural) we'll all chip in for the repairs.