what to ask when buying share of freehold

daniesto

silvercar wrote: »

Maybe the cost of the ground rent collection is prohibitive. Or they want all the flat owners to be on an equal footing.

I believe this is their ultimate goal, every flat to have an equal share so when it comes to any major works everyone gets a fair share.

Bluebonnie

Without having a share in the freehold company, you would not be able to attend the annual general meeting, let alone offer your services to the committee if you have any relevant skills or experience.

If the previous leaseholder of your flat had bought a share in the freehold company himself, he may not be obliged to offer it to you: it depends on the terms on which the company is set up.

daniesto

Bluebonnie wrote: »

Without having a share in the freehold company, you would not be able to attend the annual general meeting, let alone offer your services to the committee if you have any relevant skills or experience.

If the previous leaseholder of your flat had bought a share in the freehold company himself, he may not be obliged to offer it to you: it depends on the terms on which the company is set up.

I am more concern about financial effect on me, if any, than attending to meetings. TL has given management to HE Management so offering any services are irrelevant. The person who has most responsibility is the TL director, she over sees pretty much everything.

I have 100 years left on the lease, should I need to sell flat in 20 years or so then would it have an impact as my lease only has 80 years remaining? Ground rent per year is £100 which is minor compare to £4000. The service charge of £2000 will remain as it is. I am looking to understand if there are any true benefits at all, should I go ahead with the purchase.

When TL bought the freehold they took a mortgage loan bank to pay for the freehold. There are some outstanding balance of course. With interior decor coming as the next major project, will I have to put the bill as part of a shareholder. In an unlikely event of TL dissolves, will the shareholders be accounted by the bank? or bank will take over the freehold?

sorry if I am asking nonsensical questions.

daniesto

Bluebonnie wrote: »

Without having a share in the freehold company, you would not be able to attend the annual general meeting, let alone offer your services to the committee if you have any relevant skills or experience.

If the previous leaseholder of your flat had bought a share in the freehold company himself, he may not be obliged to offer it to you: it depends on the terms on which the company is set up.

And no, previous owner did not buy a share of freehold.

Tom99

[FONT=Verdana, sans-serif]Say you don't buy the freehold share and wait until the lease has 90yrs left and extend it.[/FONT]
[FONT=Verdana, sans-serif]Using this calculator:[/FONT]

[FONT=Verdana, sans-serif]https://www.freeholdcalculator.com/leasehold_extension.php[/FONT]

[FONT=Verdana, sans-serif]You will pay £1,660 to buy out the ground rent and a further £1,255 per £100,000 current leasehold value. So £2,915 plus both parties costs, where I think if you got away with £2,000 you will be lucky. Also a lot of agro. Therefore that's £5,000 even, if your flat is only worth £100,000, but you still don't own a share of the freehold.[/FONT]

[FONT=Verdana, sans-serif]So the Quote G_M '[/FONT][FONT=Verdana, sans-serif]No brainer[/FONT][FONT=Verdana, sans-serif]'[/FONT]

george4064

If you haven’t already, I would definitely give this page a read: http://www.moneysavingexpert.com/mortgages/buy-freehold-right-to-manage

eddddy

kuratowski wrote: »

Why are they so desperate to recruit more owners? Is there some big bill coming you would then have to share in?

daniesto wrote: »

They had roof work done in spring/ summer. Their next project is interior decorating. This is what I gathered from their meeting documents.

These costs will be paid by leaseholders - not shared freeholders.

So the cost to you will be no different, whether or not you own a share of the freehold.

... Although as a shared freeholder, you might get to influence some of the decisions (but with 60 of you, your influence will be very, very slight).

getmore4less

I would look at the company structure and what is happening to your money.

Did they create the company with 70 shares and only issue 60 to shareholders keeping back the other 10 to be sold.

What did they pay for the freehold and was that initial £2kpp enough how have they decided £4k is the new value of each share?

If they borrowed money to pay for the freehold how has the interest been paid.
etc.

Will your £4k be capital raising, debt reduction or paid out to the other owners.

daniesto

Thank you for all your answers! Have a lovely Christmas!!!

daniesto

getmore4less wrote: »

I would look at the company structure and what is happening to your money.

Did they create the company with 70 shares and only issue 60 to shareholders keeping back the other 10 to be sold.

What did they pay for the freehold and was that initial £2kpp enough how have they decided £4k is the new value of each share?

If they borrowed money to pay for the freehold how has the interest been paid.
etc.

Will your £4k be capital raising, debt reduction or paid out to the other owners.

I am not sure how many owners were there to create the company at first but what I do know is there was a management company that played a role buying the freehold. This management company does own some of the shares and not to my surprise one of the owners was a director of this company. They took a loan from a bank to pay for the Freehold. I am yet to find the amount outstanding balance owe to the bank. I know they have £143k share holders fund. £2600 per person was until end of 2017. From 2018 it was increased to £4000 and now it will be increased again from 2019. Paying £4000 would benefit me when it comes to renewing a lease in 20 years time and ground rent not required to pay. That is pretty much it.

When it comes to meeting and having your say, they do take your opinions seriously but how far it is mattered to them I do not know. So far these folks have done a pretty good job maintaining this place and keeping to bang tidy (for £2000 service charge it's pretty damn good).