Leasehold extension or freehold, which one should I sell?

Atari99

There are two flats in the building (converted house). I own only one of the flats, but we own the freehold for both. The owner of the other flat is looking for a lease extension or a share of the freehold. There are 69 years unexpired on the lease.
Do you think it would be better for us to sell a share of freehold instead of the lease extension for a little bit extra?
Do you think the buyer would be covering all the costs regardless?

Thanks for your advice, it's much appreciated.

eddddy

I'd say it boils down to whether you want the freedom (and responsibilities) of being a sole freeholder.

As a sole freeholder, to some extent you can make decisions about when maintenance is done, who it's done by, what colour the front door is painted etc.

As a joint freeholder, you'll probably have to reach agreement (compromise) on all this stuff.

If your joint freeholder (current or future) has different opinions from you, or just can't be bothered, it could get stressful.

Hoploz

Presumably they are looking into this because they are wanting to sell. So the people you'd be sharing with wouldn't be the person you know, it could be anybody. Sharing responsibility is all fine if you know the other person is reasonable and reliable but if they aren't then you could find you've put yourself in a position where you no longer have the freedom you have now. Who knows who would end up owning it after 10 years.

Just do a simple extension would be my advice.

Atari99

Hoploz, Eddddy, thank you very much for your very reasonable advice. Much appreciated.

deFoix

Atari99 wrote: »

Do you think it would be better for us to sell a share of freehold instead of the lease extension for a little bit extra?
Do you think the buyer would be covering all the costs regardless?

What is the ground rent, service charges, other charges etc? It is impossible to value a lease extension or freehold without this information.

Notwithstanding you need to get competent professional legal advise on this. If you are happy managing the lease arrangements I would keep the freehold for myself.

Atari99

Hi Boler1985.
Thank you for your reply. We have already valued the leasehold extension and the ground rent is only £50. It's quite valuable extension and most sources I have ever checked say that leasehold extension and the freehold are usually same price, and I was offered extra 5% for a share of the freehold.