Buying freehold to flat (s)

Filthylucreuk

Hello All!

I have a flat that I own that I have discussed before on this forum. It has a rising ground rent which is currently 100 pa. it rises every 26 years by double e.g : 200, 400, 800, 1600.

I have been invited to purchase the freehold for my flat and another for 9000 ( the other is on the same land).

I am confused about one thing in particular :- assuming I buy it do I have to keep it as company ? If so, do I pay myself ground tent and do I also have to pay a lease extension to the company that I own to extend my own lease? Or can I effectively just wipe my term away and only deal with the logistics of maintainance and the term on the flat below?

I hope this makes some sense ... does 9k even sound like a fair price or am I better lettting an investor take over and save the hassle

Any advice appreciated

Cheers

Tom99

[FONT=Tahoma, sans-serif]If there are two leasehold flats under the same freehold I am not sure if the freeholder has to give you both jointly a right of 1st refusal. You can probably look that up here:-

[/FONT] [FONT=Tahoma, sans-serif]http://www.lease-advice.org[/FONT]

[FONT=Tahoma, sans-serif]If the other leaseholder is not interested than I think you can go ahead and purchase the freehold as a sole owner. You can then merge the freehold and your leasehold interest so you would only own a freehold interest subject to the long lease of the other flat.

[/FONT] [FONT=Tahoma, sans-serif]You would then act as any freeholder would towards the other flat, arranging insurance and repairs etc and charging the ground rent and service charge.[/FONT]

eddddy

So it is a building that comprises of two flats, and you are contemplating buying the freehold.

On the plus side, you can extend your own lease to 999 years and reduce the ground rent to zero - if you want. You can arrange the maintenance, choose the contractors you want to use etc.

On the minus side, being a freeholder brings duties and responsibilities - they will be documented in the lease. And you have to collect ground rent and service charge from your neighbour.

eddddy

Tom99 wrote: »

[FONT=Tahoma, sans-serif]You can then merge the freehold and your leasehold interest so you would only own a freehold interest subject to the long lease of the other flat.
[/FONT]

What would be the benefit of doing that - as opposed to buying the freehold through a company?

The OP may have a mortgage on the leasehold, and I imagine it will be more difficult to sell if there is just a freehold and no leasehold.

Tom99

[FONT=Tahoma, sans-serif]To compare with the £9,000 you can get an idea of the cost of extending your lease here:-

[/FONT] [FONT=Tahoma, sans-serif]http://www.lease-advice.org/external-link/calculate-cost-lease-extension[/FONT]

[FONT=Tahoma, sans-serif]Remember, if you solely own the freehold you will be entitled to any future lease extension premium from the other flat as well as the ground rent until the other flat decides to extend.

[/FONT] [FONT=Tahoma, sans-serif]If the leases are getting shortish I would expect the price of the freehold to reflect the potential future premiums from the two flat lease extensions.[/FONT]

Tom99

eddddy wrote: »

What would be the benefit of doing that - as opposed to buying the freehold through a company?

The OP may have a mortgage on the leasehold, and I imagine it will be more difficult to sell if there is just a freehold and no leasehold.

[FONT=Tahoma, sans-serif]Running a company for the benefit of two flats would be an administrative headache.[/FONT]
[FONT=Tahoma, sans-serif]There should be no problem with a mortgage on the freehold when it is sold.[/FONT]

Slithery

@Tom99

Can you post in normal size text like everyone else please.