Part of a freehold

tardis_pilot

Presently I am a leaseholder on my current flat and I’m looking to move. Sadly I’m on my own and therefore only have one wage coming in. Happily, my job is secure and relatively well paid. I want to move to the South East Essex coast but with prices as high as they are I might have to settle for another flat. In the course of my search I found a very nice two bedroom maisonette. I would be buying a share of the freehold (three properties with the freehold shared amongst them). Whilst I appreciate it is better than leasehold I’m very unsure. Friends and family have said it’s good or bad but nobody has really been able to explain why in either case.

Can anyone here explain nicely and clearly the pros and cons of buying part of a freehold? I really like the place and would hate to miss out on it but if it’s more trouble than it’s worth I’d rather know now.

davidmcn

It means the freeholder you're dealing with is the community of leaseholders in your block, rather than some third party trying to make a profit out of you all. So certainly preferable.

eddddy

When an estate agent says "share of freehold" flat, you are buying 2 things:

1. A leasehold flat
2. Joint ownership of the building that the flat is in (you'll jointly own it with the other leaseholders)

On the plus side, you and the other owners will be responsible for insuring the building, getting maintenance and repairs done etc. So you can choose when to get work done, which builders to use and try to get good value for money etc.  But sometimes joint owners pay a managing agent to do all that kind of stuff.

If you didn't jointly own the freehold, the freeholder would decide those things - and you would be stuck with the freeholder's decisions.

But the downsides of jointly owning the freehold (i.e. share of freehold) with 2 other people - especially if you don't employ a managing agent - include:

• The 3 of you might have different opinions on maintaining a property e.g. Somebody wants to spend lots of money keeping the building pristine, another is happy to live in a scruffy property to save money.

• There's a leak in the roof that needs repairing, but one of the freeholders doesn't want to pay their share to get it fixed

• When repairs or maintenance need doing, between the 3 of you, you'll have to find builders, get quotes, choose the builder etc - and agree on everything. (e.g. One of the freeholders wants his mate from the pub to do the work, somebody else want's the cheapest possible bodge job, somebody else wants a high quality expensive repair). 

In short, joint ownership of the building (i.e. Share of Freehold) usually works very well, but it can also be a nightmare for some people.

greatcrested

When the three joint owners get on well, communicate well, and tend to agree on what & when things need doing, it works well and can be much cheaper than having to pay for whatever a 3rd party freeholder does (or does not!0 decide

If one or more is a pain in the ****, or you get 2 absent joint owners (eg they let out their flats) and just don't care, then getting anything done/paid for can be a nightmare.

As a starting point,knockon the doors of the other flats and see what kind of reception you get, and what you can find out (far more than asking your seller who has a vested interest in making you feel happy!)

hazyjo

It has been said above,but to make it very clear, share of freehold is still 'leasehold'. You would still have a lease and would still likely have restrictions and obligations.

NameUnavailable

As said you are still buying a leasehold property and you need to check the lease to see what it dictates in terms of maintenance of the property. Also the length of the lease and I would check that all are for the same term (if the others have long leases and yours is shorter you may have to pay a premium to the other parties to extend your lease).

Ask if there is a management company (unlikely) or what arrangements they have for regular maintenance. Does the building look like it's being maintained? If it looks like it's being neglected then I would have concerns about the other parties willingness to spend money on it.

That said, at least you have some control over what happens, unlike with a freeholder/landlord who owns the building as an investment and can earn money out of the leaseholders with every job carried out on the place.