House divided into two flats - leasehold confusion

eddddy

JeffMason said:

eddddy said:

JeffMason said:
So the £3 version won't give me details of how the lease is split, who is responsible for what etc? 

You could ask the seller if they'll show you a copy of their latest annual service charge accounts. That would probably give you far more helpful information than a copy of the lease.

However, I suspect the problem might be... if you don't fully understand how service charges work, and the EA might not fully understand how service charges work, and the seller might not fully understand how service charges work -  so you might all end up confusing each other. (That's the type of situation I come across very frequently.)

So how do I avoid that? 

Do you mean: How do you avoid everyone getting confused about how the service charge works for a particular flat?

If so, the answer would probably be to show the service charge accounts to somebody who understands how leasehold service charges work.

(It's a bit like buying a car. If you don't know much about cars, and the person selling the car doesn't know much about cars - you might want find somebody who does know about cars to take a look at the car.)

If you start the buying process, your solicitor will look at the service charge accounts and lease, and probably write up a summary for you.

bouicca21

When I bought my flat, I was as clueless as OP on matters relating to Leases and service charges.  This forum has been a great learning experience.

Whether share of freehold is or is not better is down to the individuals.  The freehold to my block is still owned by the company that built it.  The managing agent is reluctant to spend money even though the majority of residents would like him to some cosmetic work (like painting the hall).  But the day to day stuff gets done.  

A friend is secretary to a share of freehold company for her block.  She doesn’t chase a non paying absentee resident ‘because it’s not worth it’, expenditure includes regular provision of flowers in the communal hall, very nice but I’m willing to bet there is no provision for it in the leases.  The place is well kept and attractive; the residents get on.  Service charge is high because of the non payer plus there is a lift which requires lots of maintenance.  

Another friend is also in share of freehold.  The residents mostly get on, 2 (of 4) recently  mucked in together to decorate the communal areas and buy new stair carpet.  They split the cost between them rather than add it to the service charge as they felt that (a) it would be a hassle and (b) the layout of the building meant that their flats benefitted most from the work. 

I’d love to own the freehold of my block, or to do right to manage, but the only other person interested is seriously obnoxious.  I’ll take the parsimonious managing agent over him any day.

All three of these leases have very different conditions.  So any buyer needs to make sure they can read the lease (if only to check the length of it) before going too far.  No point in spending money on conveyancing if at the last minute you discover the lease is only 47 years, there is a no pets clause and you have a German Shepherd.  And if you search these forums for JB Leitch you might think it is also a good idea to know who the freeholder is. Never believe what the EA tells you.

JeffMason

bouicca21 said:

When I bought my flat, I was as clueless as OP on matters relating to Leases and service charges.  This forum has been a great learning experience.

Whether share of freehold is or is not better is down to the individuals.  The freehold to my block is still owned by the company that built it.  The managing agent is reluctant to spend money even though the majority of residents would like him to some cosmetic work (like painting the hall).  But the day to day stuff gets done.  

A friend is secretary to a share of freehold company for her block.  She doesn’t chase a non paying absentee resident ‘because it’s not worth it’, expenditure includes regular provision of flowers in the communal hall, very nice but I’m willing to bet there is no provision for it in the leases.  The place is well kept and attractive; the residents get on.  Service charge is high because of the non payer plus there is a lift which requires lots of maintenance.  

Another friend is also in share of freehold.  The residents mostly get on, 2 (of 4) recently  mucked in together to decorate the communal areas and buy new stair carpet.  They split the cost between them rather than add it to the service charge as they felt that (a) it would be a hassle and (b) the layout of the building meant that their flats benefitted most from the work. 

I’d love to own the freehold of my block, or to do right to manage, but the only other person interested is seriously obnoxious.  I’ll take the parsimonious managing agent over him any day.

All three of these leases have very different conditions.  So any buyer needs to make sure they can read the lease (if only to check the length of it) before going too far.  No point in spending money on conveyancing if at the last minute you discover the lease is only 47 years, there is a no pets clause and you have a German Shepherd.  And if you search these forums for JB Leitch you might think it is also a good idea to know who the freeholder is. Never believe what the EA tells you.

I can't beleive that people are letting some of the freeholders get away with not paying anything towards the shared costs! I wouldn't be happy with that at all, especially as the ones who do pay end up paying more. That would drive me insane. 

This is all so helpful though - thank you all. It's terrifying too though!

JeffMason

eddddy said:

JeffMason said:

eddddy said:

JeffMason said:
So the £3 version won't give me details of how the lease is split, who is responsible for what etc? 

You could ask the seller if they'll show you a copy of their latest annual service charge accounts. That would probably give you far more helpful information than a copy of the lease.

However, I suspect the problem might be... if you don't fully understand how service charges work, and the EA might not fully understand how service charges work, and the seller might not fully understand how service charges work -  so you might all end up confusing each other. (That's the type of situation I come across very frequently.)

So how do I avoid that? 

Do you mean: How do you avoid everyone getting confused about how the service charge works for a particular flat?

If so, the answer would probably be to show the service charge accounts to somebody who understands how leasehold service charges work.

(It's a bit like buying a car. If you don't know much about cars, and the person selling the car doesn't know much about cars - you might want find somebody who does know about cars to take a look at the car.)

If you start the buying process, your solicitor will look at the service charge accounts and lease, and probably write up a summary for you.

Yes, that's what I meant! I really need to find a friend who is an expert in this stuff!

Sapphire

Perhaps try to find a place where, according to the lease, owner of top flat pays for any repairs to top part of building, while (leasehold) owner of bottom half pays for repairs to bottom half. That's how it works with my maisonette – so there's no service charge (or ground rent), and there's a long lease.

eddddy

JeffMason said:

I can't beleive that people are letting some of the freeholders get away with not paying anything towards the shared costs! I wouldn't be happy with that at all, especially as the ones who do pay end up paying more. That would drive me insane. 

If it's a shared freehold, and some flat owners aren't paying their share of the maintenance (leaving others to pay more)...

... that's a sign of incompetence by the shared freeholders.  In many ways the law is biased towards freeholders, so they have no excuse for failing to collect service charges.

TBH, that illustrates an example of the downside of shared freeholds (especially if there's no managing agent). The building is essentially being managed by amateurs, who might be slapdash, and/or might not understand (or abide by) the relevant laws.

bouicca21

“Sign of incompetence”?  Absolutely. And she wouldn’t get away with it if the other residents weren’t too lazy/polite to act.  It would drive me crazy too.

JeffMason

greatcrested said:

Reading the lease should tell you exactly how repairs and other costs are managed and paid for. It may be that the current 'owners' (of the leases?) simply arrange things amicably as and when, which may work fine whilst they cooperate, but you need to know what the actual legal requirements are in case there's disagrement, or a change of ownrship to someone less lexible.

The lease may be obtainable from the Land Registry (form OC2 £7), or will become available during conveyancing.

It's unlikely costs would fall on the freeholder, though responsibility for undertaking the repairs (eg new roof) probably falls on him, with th cost then passed on to the leaseholders in a way specified in the lease.

I'm going to try this for a place I am interested in. I've downloaded the OC2 form but it asks for the "title number" which I don't have and am unlikely to get a straight answer out of the estate agent. Any ideas if I can find this elsewhere or if it can be left blank?

I am also a little confused about section 7 "I apply for official copies of the documents listed below" - am I just putting 'lease' here or is it more complicated than that? 

EDIT - figured out - thanks!

JeffMason

I've found a property that is of interest and am attempting to get as much information about lease arrangements as possible before making an offer. It's a house split in two with an upstairs and downstairs flat. The EA says it's leasehold with over 100 years remaining and no service charges with maintenance done ad hoc.

I've looked up details via land registry and found mention of a seperate freehold for whole property, which makes sense. But then there is also seperate freehold and leasehold documents for both A and B flats. Does this mean that the EA is wrong and the lease is actually share of freehold or do the Land Registry just list both even if one isn't applicable? Pic of details below.

greatcrested

JeffMason said:

greatcrested said:

Reading the lease should tell you exactly how repairs and other costs are managed and paid for. It may be that the current 'owners' (of the leases?) simply arrange things amicably as and when, which may work fine whilst they cooperate, but you need to know what the actual legal requirements are in case there's disagrement, or a change of ownrship to someone less lexible.

The lease may be obtainable from the Land Registry (form OC2 £7), or will become available during conveyancing.

It's unlikely costs would fall on the freeholder, though responsibility for undertaking the repairs (eg new roof) probably falls on him, with th cost then passed on to the leaseholders in a way specified in the lease.

I'm going to try this for a place I am interested in. I've downloaded the OC2 form but it asks for the "title number" which I don't have and am unlikely to get a straight answer out of the estate agent. Any ideas if I can find this elsewhere or if it can be left blank?

No the EA won't know (or care!!).

Yes, without the Title number I doubt the Land Registry will send you the (right) lease.

Search online here and download the leasehold title (£3) for the property. Bingo. Title number.