Buying a maisonette, Share of freehold

Kazkdp

Hi everyone,

This property is advertised as a share of the freehold. I asked the current agent to let me know if there is a lease. Below is the reply.
I'm little confused so just wanted to check with you guys first.

"The property is a share of the freehold which means there will be an underlying lease, currently I believe the lease is 90+ years. This means that you don’t pay anyone to renew the lease as you would the leaseholder, the only costs would be legal fees which are very low compared to paying someone else who owns the least"

Altho it's explained I'm a little lost.

What happens after 90 years etc...is this normal? I was under the impression there was freeholder, leaseholder or share of freehold. I don't know the share of freehold comes with a lease...its more like a share of leasehold?

Thank you!
Kas

george4064

In my flat I am in the same situation as you would be in. Few things to note;

1. Every co-freeheld property has a lease written for each dwelling in the building.

2. Lets say there are 3 flats in the building, you will be one of three named freeholders. Hence you'll be a co-freeholder.

3. There will be 3 leases drawn up, one for each flat, which will be a lease for their flat of the building. So flat 1, 2 and 3 will each have a lease, which will effect be a lease to themselves (as they are a co-freeholder as well as a leaseholder).

Also found this webpage that might help: http://www.mondaq.com/uk/x/525304/real+estate/Share+of+freehold+explained

Hope that makes sense.

davidmcn

There's still a freeholder and leaseholder, the only difference is that you (and presumably the other flat owners) jointly own the freehold, rather than the freeholder being a third party. You can pay yourselves to extend your leases if you like.

SmashedAvacado

davidmcn wrote: »

There's still a freeholder and leaseholder, the only difference is that you (and presumably the other flat owners) jointly own the freehold, rather than the freeholder being a third party. You can pay yourselves to extend your leases if you like.

This is nearly completely accurate. You pay the freehold owning company, so the premium to extend the lease would go to you and the other freeholder. They may have extended theirs already, so be careful to ensure that the deal to extend is agreed already (or that the other flat lease has not yet been extended so they are in the same position as you). The directors of the freehold company (which will be you and the other owner probably) will have to act in the best interests of the shareholders which means you cannot assume you can unilaterally extend your lease for no premium once you have bought as this may not be in the best interests of the other shareholder.

eddddy

Kazkdp wrote: »

This property is advertised as a share of the freehold.

It almost certainly works like this:

The following titles (or things that can be owned) will exist:

• A number of leasehold maisonettes (maybe two or more) in a building
• The freehold of the building

You would be buying two things:

• One of the leasehold maisonettes (with a 90+ year lease)
• Joint ownership of the freehold building (you'll own it jointly with your neighbour)
  

AdrianC

You're buying two different things.

1. You're buying a leasehold maisonette with 90yrs left on the lease.
2. You're buying a 50% share of the freehold of the building.

When you want to renew your lease, you have a little chat with the other joint freeholder (who may or may not be your neighbour), and you agree to extend your lease. They may also want to extend theirs.

SmashedAvacado

AdrianC wrote: »

You're buying two different things.

They may also want to extend theirs.

But if they have already extended theirs then they might want 50% of the going rate for you to extend yours. That's why you need to check the other tenant's lease.

Kazkdp

Hi all,

Thank you so much for all the responses. Makes perfect sense now! You people are just amazing!!!