Leasehold property - what happens to old ones?

always_sunny

I have a question about what happens to old properties that are leasehold, what happens to them? I understand that the leaseholder doesn't own the walls but the right to use for x amount of years. Leases can be extended (statutory/informal) adding more years to the lease.

What happens to say an old building that is LH, flats in it still have decades left as lease and/or extension but the building itself is beyond repair?

Freeholder will keep repairing and charge back or does it happen that leaseholders are 'bought out' and replaced with a new building?

Soundgirlrocks

always_sunny wrote: »

I have a question about what happens to old properties that are leasehold, what happens to them? I understand that the leaseholder doesn't own the walls but the right to use for x amount of years. Leases can be extended (statutory/informal) adding more years to the lease.

What happens to say an old building that is LH, flats in it still have decades left as lease and/or extension but the building itself is beyond repair?

Freeholder will keep repairing and charge back or does it happen that leaseholders are 'bought out' and replaced with a new building?

It would be highly unlikely that a leasehold with flats would be allowed to get into that state. It would take several people to not care about their investment for that to happen. The freeholder has an obligation to maintain the building, the leaseholders have an obligation to pay for it.

If the Freeholder goes AWOL there are legal mechanisms in place for leaseholders to take over the management and repairs directly.

There is an obligation to insure the building (again charged onto the leaseholder via service charge) so a sudden event that renders the building "beyond repair" (Fire etc) would normally be covered by that with a rebuild cost.

The only time I can think where that might occur is something like Elephant and Castle, there the council wanted to demolish and start again so they compulsory purchased any properties that that had been sold. Not an option for private freeholders, they could buy at market value if the leaseholder wanted to sell, but they can't force a sale.

eddddy

The freeholder would just keep repairing the building and charging the leaseholders.

If the leaseholders and freeholder all agreed that the repair costs were getting out of hand, they could potentially 'club together' and sell all the leases and freehold to a developer.

The developer would then be free to demolish and redevelop.