Buying a flat with share of freehold

loulou41

I am interested in buying a flat with share of freehold. Pl can somebody explain it to me? I understand you owe the freehold with the other flat owner only 2 owners. Who will be responsible for the maintenance and do you have to buy buildings insurance for the whole flat, it can be tricky if you do not get on with them. It does not work that way that each flat owner is responsible for its own flat. Thanks

G_M

It can vary, but by the sound of it, you will be buying two Titles:

1) the lease for 1 of the flats
2) a share of the freehold for the building

You will therefore be a leaseholder, AND a freeholder.

The lease will specify what you can and cannot do as a leaseholder, and what repairs are soley your responsibility.

It will also specify what you, as leaseolder, must pay to the freeholder (ie you+the other person).

The lease(s) will also specify what you (jointly) must do as 'the freeholder'. eg
* insure the building
* pay the elecrtricity bill for the shared hallway
* repair the roof
etc

As you say, a lot depends on cooperation between the joint freeholders. When they work well together, it is an ideal set-up. Where one of you is obstructive, refuses to accept the leaking roof needs repair etc, it can be a problem.

In some set-ups, the 2 (or more - there could be dozens in a big building!) joint freeholders decide to appoint a professional management company to manage the building, collect the annual payments frome leaseholders, arrange repairs, pay the bills etc. Obviously this is more costly as the management Company makes a charge - sometimes a large charge!

Richard_Webster

Usually if you get on with the other flat owner it is a good set up.

However please be aware that if the Land Registry title is in both your names then if the other flat owner decides to be difficult, disappears, or has his flat repossessed then you will have dificiulty in selling because you will not be able to transfer the freehold so it is held by the other flat owner and your buyer, because you will need the other flat owner's signature to do this

You can get round this by having a deed of trust which includes a clause that allows only one of you to transfer the freehold if the second one doesn't sign. Difficulty with this is that most people do not want the trouble of paying a solicitor to draw up such a deed and the other flat owner won't see why it is needed!

Having the freehold held by a company that is in turn owned by the two of you is better in some ways. The Land Registry title stays vested in the company and you simply make the buyer a member of the company.

Downside of this is that you have to file some annual returns at Companies House. People move away and forget to tell Companies House the change of name/address of the company secretary and the company gets struck off for not filing returns because reminder letters have been ignored or not received.