Maisonette freehold

asantarai

I suppose it does essentially yes, but it is written into our lease that the owner of each individual flat has their own buildings insurance.

eddddy

asantarai wrote: »

Yes, that is the exact set-up. I think the lease says somewhere that the freehold has to be for the entire building of four flats, but will double check as sharing the freehold for 'our side' with one other person would be preferable.

The Leasehold Reform Housing and Urban Development Act will override anything that it says in the lease.

Here's an an interpretation of the legislation by LEASE:

Collective Enfranchisement (buying the freehold of your building)

....

The Building

• Building must be a self-contained building, or part of a building. If part of a building it must constitute a vertical division of the building, with services either independent to that part, or could be so provided without significant interruption to the remaining part.
  
• There must be at least two flats in the building and at least two-thirds of the flats must be owned by qualifying leaseholders.

link: https://www.lease-advice.org/fact-sheet/collective-enfranchisement-buying-freehold-building/

So it sounds to me like just two maisonettes would constitute a 'building'.

eddddy

asantarai wrote: »

Each of the flat owners already pays their own buildings insurance, so we would just continue to do that and not have it go through the Ltd. company we set-up right?

Yes - by default the insurance arrangements would stay as they are.

But if you become joint freeholders, you could vary the leases to make the freeholder responsible for insuring the whole building. That would probably work out cheaper.

And future buyers' solicitors would probably be happier.

(Currently, there is the risk that you insure your maisonette, but the person underneath you doesn't insure theirs. So if the whole building burns down - you're stuffed!)

NeilCr

eddddy wrote: »

So it sounds to me like just two maisonettes would constitute a 'building'.

Eddddy

Genuine question

OP says that the freeholder owns the land the maisonettes are on. Assuming these blocks are very close together would that be a problem for those buying only one of the “Maisonette blocks”

G_M

asantarai wrote: »

I would ask that as our current freeholders do not charge us for anything and do not do anything towards repairs or maintenance for the properties (the only thing we pay them is a very small nominal ground rent charge each year), do you suggest that once we set-up a Ltd. company and obtain the freehold, should we start charging ourselves service charges etc., or should we keep it exactly as we have it now?

Each of the flat owners already pays their own buildings insurance, so we would just continue to do that and not have it go through the Ltd. company we set-up right?

In order for the freeholder (whether the existing one, or a new company jointly owned by the 4 of you) to start charging for maintenance, insurance, or anything else, all 4 leases would need to be either varied, or cancelled and re-issued.

(if the leases currently have only a short life remaining, granting brand new, longer leases on new terms might be better).

But to either vary or re-issue the 4 leases, all 4 leaseholders, and the freeholder would have to agree.

If you all plan buy the freehold, I would have a discussion first about this, so that you all go into this with your eyes open, and with a common intention - you don't want to jointly buy the freehold and then immediately start a squabble between yourselves about whether, and how, to vary the leases!

eddddy

NeilCr wrote: »

Eddddy

Genuine question

OP says that the freeholder owns the land the maisonettes are on. Assuming these blocks are very close together would that be a problem for those buying only one of the “Maisonette blocks”

The Leasehold Reform, Housing and Urban Development Act deals with that (or tries to!) - it refers to "appurtenant property", which can be included in the enfranchisement (freehold purchase).

I haven't studied the act, so I don't claim to know the details - but here's a couple of references from the act:

Subsection (2)(a) applies to any property if F1. . . at the relevant date either—

(a)it is appurtenant property which is demised by the lease held by a qualifying tenant of a flat contained in the relevant premises

....

“appurtenant property”, in relation to a flat, means any garage, outhouse, garden, yard or appurtenances belonging to, or usually enjoyed with, the flat;

Link: http://www.legislation.gov.uk/ukpga/1993/28

So it seems that demised 'private gardens' can be included in the freehold purchase.

I'll leave others to decipher the rules about communal gardens which are shared with other blocks.

TBH, I think that's the sort of thing that often ends up being decided by a tribunal.

AlexMac

asantarai wrote: »

Thanks for that AlexMac - really helpful.
I would ask that as our current freeholders do not charge us for anything and do not do anything towards repairs or maintenance for the properties (the only thing we pay them is a very small nominal ground rent charge each year), do you suggest that once we set-up a Ltd. company and obtain the freehold, should we start charging ourselves service charges etc., or should we keep it exactly as we have it now?

Each of the flat owners already pays their own buildings insurance, so we would just continue to do that and not have it go through the Ltd. company we set-up right?

Others above have already helpfully responded on the insurance question, and as suggested, whatever happens will require agreement by all parties... and probably legal advice; so there may be a bill.

It also might depend on when major external repairs might arise and whether your existing lease is clear on how any arguably shared costs such as a replacement roof or external decor would be funded. If it's a newish block in good condition you could just muddle on; there probably won't be big savings on collective buildings insurance on 2 or 4 units and individual flats would need to insure their own contents anyway; separating buildings from contents cover might even cost a bit more?

But if it's an early 20th Century property on its original roof, it would put me off buying an upper flat if a pending replacement was wholly down to me; or worse, if replacement was likely to be the subject of a dispute while water poured in! It will also depend on whether there are shared balconies, fire escapes, guttering and downpipes, etc

The other considerations include how long the leases are, what the freeholder might charge to extend these if they're approaching the preferred red-line of only 80 years, or worse, what would happen if the freeholder sold it on to someone else? I see freeholds up at auction all the time for low tens of £k, and assume the purchasers think money can be made from them; either from future lease extensions or ground rents?

My strong personal preference, when buying, is that stuff like this is clear, with me in at least shared control. But that's a gut feeling rather than a thought-through legal position, and reflects the fact that I've always owned old buildings of over three storeys; so they've needed regular maintenance and even external decor has required scaffolding (I assume if you need to paint windows now, you just shin up a ladder or lean out?).

And as regards sinking fund for future major repairs; that too is a personal preference; you might just hope nothing crops up while you own it?

What do your neighbours think?