Buying freehold when already have the right to manage

Askfor

Hi there, would really appreciate some help on this if anyone has the time.

Just bought a flat with a lease of 125 years (it was newly extended when I bought). The other owners have clubbed together and already have right to manage. After I moved in another owner notified me that they were considering buying the freehold and were all going to meet the solicitor to discuss it. I mentioned that I had just moved and do not have the funds to put into that right now. He said if there are some people not willing to join they didn’t have to but if they had majority there would have to be a separate management company formed. I’m getting quite worried about this and not sure why the separate management company would need to be formed for those not owning freehold? Can someone help as I’m worried about the cost of both joining and not joining the freehold.

Thanks!

Tom99

If you don't participate in buying the freehold then the management of the block should continue much as it does now.
Maybe he meant that a separate company would be set up to own the freehold?

eddddy

Askfor wrote: »

Just bought a flat with a lease of 125 years (it was newly extended when I bought).

So that must have been an 'informal' lease extension. What are the ground rent terms?

I suspect that this could get extremely messy, because it's possible that everyone has different lease lengths, different ground rents etc.
Because:

1. Some people have done statutory lease extensions
2. Some people have informal lease extensions (with different end dates and different ground rents)
3. Some people have no lease extensions

So everyone should be contributing a different amount to the cost of the freehold.

People in group 1 (above) should probably pay least, and people in group 3 should pay most.


I don't follow the comments about the management company.

I'd guess a new company would be formed to own the freehold, and responsibility for managing the block would be transferred from the RTM company to the freehold company.

(Maybe the issue is that the transfer of management from the RTM company to the freehold company needs approval by the majority of flat owners.)

itwasntme001

Why are your fellow leaseholders wanting to go through collective enfranshisement after they have right to manage already? Who is the freeholder, is he also a leaseholder? Does the freeholder also have votes on decisions made by the right to manage company?


What is the value of your property and ground rent schedule?


Answer to the above questions will enable more useful and concise answers to your query.

eddddy

itwasntme001 wrote: »

Why are your fellow leaseholders wanting to go through collective enfranshisement after they have right to manage already?

presumably as an alternative to paying to extend their leases.

The cost might be about the same, or even cheaper because of lower valuation and legal fees.

Askfor

Hi,

Thanks I think for many it would be cheaper than extending. My ground rent is 350 a year but I’m I. London.

Askfor

I was worried that I might have to form a separate management company myself if i didn’t agree but as a reply above stated I don’t think it’s the case.

Socajam

Why don't you find out the cost of buying the freehold?
How the cost will be split - would be it by length of lease or evenly?
What are the pitfalls of not being part of the freeholders?
Are there going to be new rules from the proposed freeholders - like renting out your if flat or the number of rentals allows?
I would try to find out some of these questions and then go from there.
Being a freeholder will be more beneficial in the long run if and when you want to sell.