Buying freehold, different lease lengths

AleeHH

Hoping someone might know the answer to this. I think i'm right saying 50% of flat owners can buy the freehold but does the length of only their leases affect the price of the free hold. The situation is we have a 80+ year lease, whereas the other 3 flats are less than 60 years. I'm guessing 'our' freehold price would be quite cheap but obviously its for the whole building, where the other flats might be in the tens of thousands because of 50 year leases. Anyone know how it works?

Thanks in advance.

Tom99

[FONT=Verdana, sans-serif]Yes the total price for the freehold will be a lot more than it might be because 3 flats have less than 60 yrs to run.

[/FONT] [FONT=Verdana, sans-serif]But how that total price is split between the 4 of you (if all 4 want to buy) is a matter of negotiation.

[/FONT] [FONT=Verdana, sans-serif]Also it depends what you all agree will happen to your existing leases once the freehold has been acquired. Typically you might agree that you all get 999 yr leases at £0 ground rent.

[/FONT] [FONT=Verdana, sans-serif]In that case the owners of the <60yr leases should have contributed a lot more than you.

[/FONT] [FONT=Verdana, sans-serif]Alternatively you could all pay an equal share for the freehold but leave the existing leases as they are for the time being.

[/FONT] [FONT=Verdana, sans-serif]Then if a <60yr lease wants to extend they will have to pay the freeholder ( ie the 4 of you) the appropriate lease extension premium applicable at that time.

[/FONT] [FONT=Verdana, sans-serif]You could work out how to fairly apportion the freehold cost by estimating the cost of extending each of the 4 leases individually then apportion the freehold cost in the same ratio.[/FONT]

eddddy

As Tom99 says, one way or another, each leaseholder should contribute according to their lease length and value of their flat.

(Are the flats all similar sizes with similar values? Where leases are less than 80 years, marriage value is a consideration.)

Are you (the leaseholders) planning to calculate the cost split yourselves?

From experience, the challenges you are likely to find include:

• some leaseholders challenging the valuations given for their flats

• some leaseholders not understanding the valuation process, and refusing to agree to pay more than others

It might be easier, to get everyone to agree to pay for a professional valuer to calculate the cost split. (Although even that might not convince all the leaseholders.)

G_M

Tom99 wrote: »

[FONT=Verdana, sans-serif].....[/FONT][FONT=Verdana, sans-serif]

[/FONT] [FONT=Verdana, sans-serif]Alternatively you could all pay an equal share for the freehold but leave the existing leases as they are for the time being.

[/FONT] [FONT=Verdana, sans-serif]Then if a <60yr lease wants to extend they will have to pay the freeholder ( ie the 4 of you) the appropriate lease extension premium applicable at that time.

[/FONT]

Is there not a risk with that of the other 3 leaseholders wishing to extend they leases, and asking to do so at zero cost?

Then with their share-of-freeholder hats on, they could outvote the OP and, say, approve extensions to all 4 flats to 999 years....?

Not sure if some Deed/agreement coud be reached to prevent that.