Peppercorn 999yrs

Eee21

Hello all I am new to all this and this site so if anything sounds silly I apologise.


I own a downstairs shop and it has a flat above which I do not own but am looking at purchasing. The landlord for the flat also owns the freehold to my shop, so I am leasehold on the shop even though I have bought the shop outright a while ago. The shop has a peppercorn rent from 1990 for term 999yrs. If I were to buy the flat above I would then own the freehold on the whole thing. I am wanting to purchase the flat as a long term investment to rent out and was wondering if there is any issue I need to be aware of that could bite me in the butt or am I good to go. I am intending to purchase the flat cash without a mortgage. Thank you in advance.

Cakeguts

You have to buy the freehold not just the flat. The flat will be leasehold.

00ec25

Eee21 wrote: »

Hello all I am new to all this and this site so if anything sounds silly I apologise.

OK, but you need to learn when to use certain technical words correctly

I own a downstairs shop and it has a flat above which I do not own but am looking at purchasing. The landlord for the flat also owns the freehold to my shop, so I am leasehold on the shop even though I have bought the shop outright a while ago. The shop has a peppercorn rent from 1990 for term 999yrs. no, "outright" usually implies you purchased the freehold, since that is the only way to own something "outright". You have not, you have purchased a lease, albeit one on the "ideal" 999 year term, you have not purchased the freehold If I were to buy the flat above I would then own the freehold on the whole thing. I am wanting to purchase the flat as a long term investment to rent out and was wondering if there is any issue I need to be aware of that could bite me in the butt or am I good to go. I am intending to purchase the flat cash without a mortgage. Thank you in advance.

if you buy the freehold then you will need to check the rules about SDLT and "mixed use" properties since your freehold comprises both a commercial shop and a residential flat

Eee21

The person I would by the flat off has said I would then get the freehold to both if purchased.

G_M

Eee21 wrote: »

The person I would by the flat off has said I would then get the freehold to both if purchased.

That's fine then. But the point is you have to buy both the lease to the flat AND the freehold. These are seperate purchases , but povided he's selling bboth, you're fine. as for the letting business:



** Tenancies in Eng/Wales: Guides for landlords and tenants This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.

Topics covered:

* Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015)

* Deposits: payment, protection and return

* Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

* Rent increases: when & how can rent be increased?

* Repossession: what if a LL's mortgage lender repossesses the property?

* New landlords: advice, information & links

* Letting agents: how should a landlord select or sack?

Eee21

Iv been informed that I would have the leasehold and the freehold for the shop but the flat is only freehold there is no leasehold for it.

Jack_Johnson_the_acorn

Eee21 wrote: »

Iv been informed that I would have the leasehold and the freehold for the shop but the flat is only freehold there is no leasehold for it.

The freehold will be for the entire property.

Eee21

Is it possible to get a leasehold attached to it ?

G_M

Eee21 wrote: »

Is it possible to get a leasehold attached to it ?

????

* There is a freehlod to the building, owned by Mr X
* there is a flat which is probably leasehold, also owned by Mr X
* It is possible the flat is not leasehold - it may be included within the freehold to the building(edit - I see you've said this is the case here)
* There is a lease to the shop (peppercorn) owned by you
* you wish to buy the flat. You also wish to own the freehold. So
a) if the flat is leasehold, you need to buy the lease and the freehold
b) if the flat is not leasehold, you need to buy the freehold
* if b) happens, you could not " get a leasehold attached to it" as that would mean granting yourself a lease. A lease can only be granted by one person to a different person.

* why would you want/need a lease on the flat, given you will own both units and the freehold?
* As mentioned previously, SDLT may be an issue.
* what has your solicitor said when you asked?
* Other issues relate to tenancy law - see my earler links

00ec25

Eee21 wrote: »

Is it possible to get a leasehold attached to it ?

so you will end up owning:

a) the freehold of the entire building which comprises a flat and a shop
b) a lease for the shop. That lease is then meaningless since you own the freehold of the building anyway so, as mentioned above, you "cannot" lease something to yourself.

In respect of the flat, you can get a solicitor to create a lease for the flat, and that would then enable you to sell the lease for the flat to a buyer. Creating a lease is something you really should pay for professional legal advice to do.

on the other hand if you merely want to let the flat ("rent it out") then you do not need to create a lease as you own the freehold of the flat and are therefore able to let the property to whoever you wish

Eee21

When you rent out the flat do you not have to give the tenant the lease hold to the flat ? My main concern is if I were to sell down the line and someone wants to borrow to buy it, a lease hold flat would be easier to get a mortgage on than a freehold flat, so I don't want its value to be effected.