Creating an additional 1 bedroom self contained flat in my leasehold maisonette

Slithery

alikorkmaz123 said:

@Slithery I think you may be wrong there, he can’t ask for what ever amount he wants. There’s a calculation method and if he asks for too much, then you get a independent surveyor to get the price. From what I read as well, you will need 50% of the flats in the building to come together to buy the freehold and me by myself is 50% of the flats as there is only 2 flats. So I don’t see why I can’t buy the freehold and he can’t just charge whatever he wants, there’s a way or calculating the value of the freehold. 

I'm afraid not. If there are only two flats then you both need to agree to purchase the freehold otherwise the freeholder has no obligation to sell to you at all.

alikorkmaz123 said:

@HampshireH From the couple of online calculators I’ve used, for my share is around £1-3k But for the other flat is around £20-23k because they have only 57 years left on the lease, so the total freehold price is around £21-26k

You haven't taken into account the uplift in value that your proposed development will add to the property. The current freeholder is going to want at least 50% of the profit you expect to make on top of your already low estimates before even considering your offer. Sorry.

NameUnavailable

The OP needs to understand that they only currently own a lease, which is basically a long term rental agreement. They have no rights to do anything at all to the property other than regular decorating. Any changes (new kitchen/bathroom etc.) need freeholder approval.

The best bet is to speak to the neighbour, get them on board for a freehold purchase and if they can't afford it you'd have to basically gift them their share in exchange for agreement to do the alterations you are proposing - they might go for that!

alikorkmaz123

@bolwin1
@zagubov
From what I have understood, if when I ask the freeholder and the freeholder wants to sell then I can purchase the freehold even if the other leaseholder doesn't want to buy a share and I can purchase the whole freehold. But if the freeholder doesn't want to sell, then I would need to get the other leaseholder involved to want to buy there share, to be able to force the freeholder to sell. Is this correct? Thanks for your replies 

NameUnavailable

alikorkmaz123 said:

@bolwin1
@zagubov
From what I have understood, if when I ask the freeholder and the freeholder wants to sell then I can purchase the freehold even if the other leaseholder doesn't want to buy a share and I can purchase the whole freehold. But if the freeholder doesn't want to sell, then I would need to get the other leaseholder involved to want to buy there share, to be able to force the freeholder to sell. Is this correct? Thanks for your replies 

No. The freehold must be offered to both leaseholders. If the other leaseholder doesn't want to buy then the freeholder doesn't have to sell to you, although if you agree terms (after the other leaseholder has been offered the option and refused) then you can come to an agreement yourselves and you will then be the overall freeholder with the responsibilities that entails to the other leaseholder (their lease conditions continue regardless, so if any of your proposed works affect them in any way you can't proceed without their agreement and variations to the lease).

NameUnavailable

Just to add, if the freeholder is in a position that they don't have to sell and they know you want to buy, then of course they're going to want more than market value....

[Deleted User]

I was just wondering, if the previous owner had to pay £32k to just extend the leasehold on your maisonette, I'm not sure your calculations on buying the freehold (including the upstairs maisonette) can possibly be correct. It seems very low compared to what has already been paid just to extend the leasehold on your property only. Plus the leaseholders and your legal fees.  I think you are being very very optimistic.

warby68

Chances of upstairs leasholder wanting the level of disruption proposed?
Might just want status quo/quiet life

AdrianC

alikorkmaz123 said:

I think the freeholder is an elderly gentlemen and he has already made good amount of money from my purchase because he charged the previous leaseholder 32k from the money I paid to the previous leaseholder for an 99 year add on to the current lease and reduced the ground rent to peppercorn.

What's any of that got to do with the price of fish?
So he's elderly? So what? Perhaps he wants to leave the freehold to somebody in his will?
So he's "already made good money"? So what? He owns an asset - why shouldn't he be entitled to a return from it?

So if the other leaseholder isn’t interested in buying a share of the freehold and the current freeholder is willing to sell the whole freehold, can I purchase it?

That bit there is the important bit. IF. If he isn't, then that's where you hit fun.

alikorkmaz123 said:

@Slithery I think you may be wrong there, he can’t ask for what ever amount he wants. There’s a calculation method and if he asks for too much, then you get a independent surveyor to get the price. From what I read as well, you will need 50% of the flats in the building to come together to buy the freehold and me by myself is 50% of the flats as there is only 2 flats. So I don’t see why I can’t buy the freehold and he can’t just charge whatever he wants, there’s a way or calculating the value of the freehold. 

Oh, but he can... The only time there's any restriction is if you go down the statutory route. And, yes, that requires 50% of leaseholders - unless there's only two leaseholders, in which case it requires both.

Same for your lease extension. You got +99yr, so it must have been a non-statutory extension, in which he could ask whatever price he wanted. Statutory is +90yr.

Even then, the freehold value will take your neighbour's short lease into account. If they were to go down a statutory extension, they would hit a major marriage value hike for a short <80yr lease. That is going to be priced in to a statutory freehold purchase - because the freehold purchase won't itself extend your neighbour's lease (any more than it will vary yours), so the new freeholder would still be due that marriage value income...

Your worst possible outcome is you splitting the purchase of the freehold 50/50 with your upstairs neighbour, who then digs their heels in and refuses to grant you permission to modify the building so drastically.

But we're getting ahead of ourselves here.
Let's go back to the initial driver for this.
You want to extend your 1-bed flat and convert your basement into another 1-bed flat.
Can you show us the numbers you think will allow that to make more sense than simply moving?
How emotionally tied are you to staying in this particular flat?

wilfred30

OP - there really is no point prolonging this thread until you have spoken to the freeholder to ask if he is prepared to either sell the freehold to you or, failing that, he gives you permission to undertake the structural changes you want. 

zagubov

AdrianC said:

Even then, the freehold value will take your neighbour's short lease into account. If they were to go down a statutory extension, they would hit a major marriage value hike for a short <80yr lease. That is going to be priced in to a statutory freehold purchase - because the freehold purchase won't itself extend your neighbour's lease (any more than it will vary yours), so the new freeholder would still be due that marriage value income...

Your worst possible outcome is you splitting the purchase of the freehold 50/50 with your upstairs neighbour, who then digs their heels in and refuses to grant you permission to modify the building so drastically.

I presume there's no legally watertight way that the OP and their upstairs neighbours could agree on the split cost of freehold and granting permission for the development via contract(s) drawn up by solicitors?