Share of freehold in conversion house

loulou41

What are the advantages and disadvantages of buying a share of freehold in a conversion house. Downstairs and upstairs flat only two flat owners. Who will be responsible for insuring the building is it up to individual owners? Also maintaining the property should there some legal document in place to avoid disputes between flat owners. I found out with a management company although you have to pay a monthly fee you still have to a lot of money when they refurbish. Any advice will be greatly appreciated. Thanks

eddddy

You and your neighbour have to agree on who to insure with, and you have to agree which contractors to use for repairs etc.

So you and your neighbour get to jointly decide these things, rather than a 'faceless' freeholder deciding.

But if your neighbour turns out to be unreasonable, uninterested or has different views on property maintenance from you - it could get very difficult.

AlexMac

Shared Freehold is good, but...Ask;
- who is the Freeholder?
- Who manages the block (the Freeholder? An agent? No-one?)
- What is the annual Service Charge and waht does this cover (usually at least Building Insurance for the whole block; maybe communal maintenence or energy or gardens) ?
- Is there a "Sinking fund" for one-off or cyclical maintenance like roofing repairs or external decor?
- Are there any recent or planned maintenance projects such as the above?

(good vendors or Agents will know all this although you won't get binding replies until your solicitor asks for you)

Conventionally, the Block's "Freeholder " will be a Limited Company made up of the 3 leaseholder owners as Directors or Memebers.

The Lease and (if the Company exists- its "Constitution" or Articles" or "Men & Arts" ) should spell out how costs are shared and what the service charge is, what it covers, how shared (e.g. equally, or pro-rata to floorspace or Rateable Value?).

Find out the freeholder's name and google it- the Companies House entry is free to access and may display a "Constitution"; ours does.

Usually, the freeholder (i.e the three of you acting as a Company) insure the building and decide how to mnage and fund maintenence ...

Or asl your solicitor