Share of freehold major issue

Tom99

eddddy wrote: »

The buyer's conveyancing is probably being done by a Conveyancing Paralegal on a fixed fee, who has no specialist knowledge of the Landlord and Tenant act.

The buyer is probably just an "average joe" (maybe even an FTB) again with no specialist knowledge.

Unless the buyer is prepared to find a solicitor with relevant expertise and pay them a hefty chunk of fees for their advice, I suspect things will fall apart.

I'd still say it's far easier just to find another buyer and sell the flat as a leasehold flat (with no share of freehold, and no promise of a share of freehold in the future).

Since it's the buyer's 'solicitor' who has raised the issue they must know something about the Act and it's worth a try to convince them that one leaseholder cannot form a majority.

streetspirit

Tom99 wrote: »

If your buyer agrees you could just sell them your share of the freehold without serving a notice.
In which case only a majority of qualifying tenants can exercise the right to information about the sale and a right to buy it themselves and the one other leaseholder could not do that alone.

Extract from Act:

'In those circumstances the requisite majority of the qualifying tenants of the flats contained in the premises affected by the relevant disposal (the “constituent flats”) have the rights conferred by the following provisions—

section 11A (right to information as to terms of disposal, &c.),
section 12A (right of qualifying tenants to take benefit of contract),
section 12B (right of qualifying tenants to compel sale, &c. by purchaser), and
section 12C (right of qualifying tenants to compel grant of new tenancy by superior landlord).'

Thanks, this is what I have also emphasised to my solicitor and they are saying the leaseholder qualifies. I am still not 100% clear on why, and will ask again.

I have been told that both the freeholder and the leaseholder will be offered it for £1 now. What if they both want it? Do we flip a coin as to who gets it? Ask a number 8 ball? The whole thing is absurd. I can see both of them wanting it. The other freeholder would get the whole freehold for £1 to one day sell to the leaseholders for more; the leaseholder would get it for £1 now.

streetspirit

Tom99 wrote: »

Since it's the buyer's 'solicitor' who has raised the issue they must know something about the Act and it's worth a try to convince them that one leaseholder cannot form a majority.

Just seen these too. Yes, it's definitely getting that way. Although I think my vendor is getting anxious and considering putting it back on the market, which will make it all fall apart anyway.
Buyer is a FTB. I'll try again with the majority angle. Thanks both.

Tom99

streetspirit wrote: »

Thanks, this is what I have also emphasised to my solicitor and they are saying the leaseholder qualifies. I am still not 100% clear on why, and will ask again.

I have been told that both the freeholder and the leaseholder will be offered it for £1 now. What if they both want it? Do we flip a coin as to who gets it? Ask a number 8 ball? The whole thing is absurd. I can see both of them wanting it. The other freeholder would get the whole freehold for £1 to one day sell to the leaseholders for more; the leaseholder would get it for £1 now.

The leaseholder of flat 1 is a qualifying tenant and so (I believe) are you with flat 3. If a notice was served it would be by the freeholder (ie you and the other freeholder) on these two qualifying tenants saying a 1/3rd share of the freehold was to be sold.
Both those qualifying tenants would have to elect the buy your share of the freehold since only one of them would not be a majority. You, obviously would not elect to buy half of the 1/3rd you already own.
The other freeholder is not given any right to buy your share so I don't know who gave you that information.

Two other thoughts:
1 - do you qualify as a resident landlord?
2 - If there are two qualifying tenants notice needs to be served on all but 1. You could therefore just serve notice on flat 3 (you) and not serve notice on flat 1.

streetspirit

Tom99 wrote: »

The leaseholder of flat 1 is a qualifying tenant and so (I believe) are you with flat 3. If a notice was served it would be by the freeholder (ie you and the other freeholder) on these two qualifying tenants saying a 1/3rd share of the freehold was to be sold.
Both those qualifying tenants would have to elect the buy your share of the freehold since only one of them would not be a majority. You, obviously would not elect to buy half of the 1/3rd you already own.
The other freeholder is not given any right to buy your share so I don't know who gave you that information.

Two other thoughts:
1 - do you qualify as a resident landlord?
2 - If there are two qualifying tenants notice needs to be served on all but 1. You could therefore just serve notice on flat 3 (you) and not serve notice on flat 1.

My solicitor said notice must be served to the other freeholder as they are a leaseholder too? Am I allowed to be served notice under the all but one rule?
And in answer to your other question, yes I am a resident landlord and have been for nearly 2 years. I think it may be getting sorted now... particularly regarding the leaseholder not having majority. Will update once it's over. Thank you again!

Tom99

streetspirit wrote: »

My solicitor said notice must be served to the other freeholder as they are a leaseholder too? Am I allowed to be served notice under the all but one rule?
And in answer to your other question, yes I am a resident landlord and have been for nearly 2 years. I think it may be getting sorted now... particularly regarding the leaseholder not having majority. Will update once it's over. Thank you again!

According to your earlier post the other freeholder, unlike you, does not own a leasehold interest.
If you have not already done so, download a copy of the freehold title. that will give you a list of the flats which have long leases and you can check whether there are only two, as you suspect, or three.