How to confirm if flat is shared freehold.

NameUnavailable

I viewed a flat the other day and put up an offer which is acceptable. It has a 999 year lease (remainder of) and I was told was shared freehold, which I see as a major benefit.

I have asked for details of maintenance arrangements/service charges if any and am still waiting for that info, but the agent is pressing me to get solicitors instructed.

I have downloaded the land registry leashold and freehold titles but the freehold is owned by a Ltd company who appear to be a property development company - none of the shareholders are leaseholders from what I can see.

I can order a copy of the lease to see what that says but is there any other way to confirm what the ownership is? I assumed as I was told it was shared freehold that there'd be zero ground rent and minimal charges, now I'm feeling uncertain as I don't want to buy somewhere with any potential complications with bad management co's or high charges/ground rents and don't want to pay for solicitors until I'm clear as to what exactly I'm buying  -  but at the same time don't want the vendor to think I'm a time waster and put the place back on the market!!

NameUnavailable

BTW the property is empty and I think it's a probate sale so the vendor probably doesn't know the answers at this stage.

anselld

If none of the leaseholders are Directors or shareholders of the freehold company then it is not "share of freehold".   It might be Right-to-Manage.

 You can get a copy of the lease from Land Registry by completing form OC2 which is worth doing anyway although the ground rent should be listed in the leasehold title if I remember correctly.

AdrianC

Remember that the property itself isn't some third kind of tenure, "share of freehold" inherently - the property itself is just a normal leasehold. You are simply buying two things, that leasehold flat AND a separate shareholding in the limited company that owns the freehold.

Owning that share in the freeholding company doesn't change the lease - there will still be ground rent, if the lease requires it, but the rent is paid to the company you partially own. If you own BA shares, you don't get free flights, do you?

The service charge is what is spent on maintaining the building... That still needs to be done.
And who organises that...? You and your fellow shareholders? Are you happy to be involved in the day-to-day running of the building, cleaning the gutters and changing bulbs in the hallways, liaising with trades, getting quotes for work, etc? Without any recompense for your time...? Liaising with your neighbouring leaseholders, all working as a team with everybody pulling their weight, happy to pay as required?
Or are you going to pay somebody to run that? That's a management company...

If the vendor doesn't know the answers, then your only choice is to pay a solicitor to determine the accurate position. But if the vendor doesn't know they're selling the shareholding, then how will they sign the shares over...?

greatcrested

The lease will not answer your question. It will simply show you the names of the original seller of the lease (the freeholder at that time), and the original buyer of the lease.

Both the freehold and/or lease may have been sold multiple times since then, but that will not be reflected in the lease itself (though the lease will be useful in determining the ground rent, and responsibilities of each party).

If the freehold is owned by a development company, and the current leaseholders have no stake/ownership in that company, then it is not share of freehold.

eddddy

A good approach would be to say to the EA...

The property is being marketed as 'share of freehold', however here's a copy of the freehold title that I downloaded from LR, and it shows a development company as the freeholder. Can you ask the seller to clarify, and perhaps provide some documentary evidence that the property is share of freehold, before I commit to paying solicitor's fees.

But I guess you might end up looking daft, if you've made a rookie mistake - like downloading the wrong title.

Also...

• The lease will specify the ground rent. It may or may not be zero and it may or may not be collected.

• The service charge covers things like insurance, maintenance and repairs. These will have to be paid for, whether or not it is 'share of freehold'

• The joint freeholders may have instructed a Management Company to look after the building. If they have, the service charge will include their annual fee as well.

NameUnavailable

Thank you for the comments. I understand what a share of freehold means and how service charges etc. work. Having had a very bad experience with a freeholder and their management co's I'm loathe to get into a similar situation again. At least with a shared freehold there is some influence over what happens and the leaseholders aren't (presumably) going to fleece themselves.

I will see what the agent says next week but it does appear that they've given me the wrong information unless perhaps the freehold was sold recently and the land registry is not yet updated.

greatcrested

as suggested earlier, it could also be that the freehold is owned separately but the leaseholders have control of the building's management via Right to Manage, which is pretty much just as good.

Or better, since it implies acive participation by the leaseholders which is not always the case with shared freehold.