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jimmylau8080

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zagubov

Hopefully someone more knowledgable about this precise situation can add some input, but first thoughts are: this seems like one of the more objective methods of assigning value, as it's based on factual aspects of the properties rather than people's subjective preferences and tastes.

I'm not sure there's an obvious better system of comparisons that wouldn't be even more likely to start arguments.

cattie

When owners of flats in my development purchased the freehold, the cost was worked out by size of properties. We have a mix of 3 bed, 2 bed & 1 bed. The majority of flats are 2 bed. Whenever flats are sold the price is based on size, so bigger flats cost more, so I think it's a pretty logical way of working out who needs to pay what.

Tom99

As part of the freehold purchase have all the participating purchasers agreed to extend their leases to say 999yrs?

Are all 17 current leases the same outstanding term? If you are proposing a free lease extension for the 17 but some have shorter leases the clearly that need to take into account when splitting the purchase price.

Also since you will be buying the whole freehold including the 9 non-participating properties then the effective lease extension price for the 9 also has to be split between the 17.

Whilst floor area might be a fair way to split a service charge the fair way to split a purchase price should be based on valuation principles.

Presumable you have set up a company to buy the freehold? Are you each getting 1 of 17 shares in the company?

jimmylau8080

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eddddy

jimmylau8080 said:

If I still like to proceed, may I know what is my right?

The law doesn't specify a way of splitting freehold purchase cost between leaseholders - so you don't have any 'rights' as such.

The leaseholders have to agree/negotiate amongst themselves.

As you and others say, splitting the cost based on the valuation of each flat/maisonette (or more accurately, based on the increase in value of each flat/maisonette from owning the freehold) would seem the fairest way.

BUT... as you mention, if you can't reach agreement with the other leaseholders, they might decide to exclude you, and buy the freehold without you participating (as long as at least 50% of them are involved).

zagubov

I reckon that the freehold for the maisonettes, while it looks expensive to some, is actually a bargain at any of the prices you've quoted. What you don't want to do is get so carried away with other people's perceived better bargains that you don't take advantage yourself and therefore really lose out. The best's the enemy of the good, as they say.

DCFC79

Well another thread has half the story missing.

davidmcn

DCFC79 said:

Well another thread has half the story missing.

Luckily still cached on Google:

We currently in progress of purchasing the freehold from the freeholder. We already have our ‘Acceptance Notice Served’ and we have a majority (17 out of 26 leaseholders served an acceptance notice).

Now, we work on ‘Nomination Notice Served’. Currently, we have 4 different types of properties like below

•             2 bedrooms flat

•             2 bedrooms maisonette

•             1 bedroom flat

•             1 bedroom maisonette

Since we have 4 types of property in order to ensure everyone pays fairly to their share. We get a local RICS surveyor to work out how much each property cost to extend the lease. I did some research I found the valuation should be based on the criteria below:

•             The current value of the freehold

•             The annual ground rent

•             The number of years remaining on the lease

But, our RICS surveyor worked out on a floor area basis. i.e. the larger properties pay more than the smaller ones. This is the first time I heard people using this method to calculate how much each of us should pay. As a result, the maisonette is far more expensive to buy their freehold compare to the flat. The price difference is around £1,500 between 2 beds flat (£5,400) and 2 beds maisonette (£6,900). But, if I based on the current value of the freehold (like https://www.freeholdcalculator.com/freehold.php), the annual ground rent and the number of years remaining on the lease. The price between 2 beds flat (£5,450) and 2 beds maisonette (£5,990) is just £500.

Personally, I feel unfair for 2 beds maisonette owner. I did raise this issue to the participants. Since they are more flats owners than maisonette owners. They insist to use the floor area basis method compare to the value of the freehold property.

So, the choice that they have given to us is either we will process with the method based on the floor area. If not, they will process without us. I like to proceed because this is a good opportunity to buy the freehold, but feel very unfair for the freehold price. May I know what is my right? And what I should do.

Hope to hear any feedback and suggestion.

elsien

Clearly not enthused about hearing any feedback or suggestions after all.