Opportunity to purchase a headlease

sazzlelondon

The Treasury has written to me and my neighbour saying the owners of the Headlease dissolved and we can now express interest to buy the headlease. I am confused as i pay ground rent yearly to a completely different company to the one that has dissolved. Can anyone help with these questions: 
1. Why am paying ground rent to a company who is not the headlease?
2. If i purchase the headlease do i still need to pay ground rent?
3. By purchasing the headlease does the property effectively become a shared freehold? What’s the difference between owning the lease and headlease, but not the freehold (we are flats in a much larger building, but the other flats are owned by a different headlease.) 
4. The other headlease owner (ie the other flats) is interested in purchasing our headlease if we decline - any implications to think about?
5. Is it a good thing to own the headlease?

eddddy

sazzlelondon said:

The Treasury has written to me and my neighbour saying the owners of the Headlease dissolved...

How many properties are covered by the headlease? Is it just yours and your neighbours? (For the purposes of answering your questions, I'll assume it's just 2 properties.)


So there is

• a freeholder who owns the freehold of, lets say, 100 properties
• a headlease holder who owns the headlease of 2 of those 100 properties

Are you thinking of buying the headlease by yourself, or jointly with your neighbour (maybe 50/50 split)?


1. The owners of the headlease might have hired an agent to collect ground rents for them (because the owners of the headlease don't want the hassle of doing it themselves).

2.

• You and your neighbour each pay ground rent to the headlease holder (let's say £100 pa each)
• The headlease holder (probably) pays ground rent to the freeholder (let's say £150 pa)

So the headlease holder is making £50 per year profit from ground rents.

If you and your neighbour jointly buy the headlease, - you will owe yourselves £100 pa - so you normally would just forget about that.

But you would now owe the freeholder £150 pa in ground rent.


3. You need to read your leases (and the headlease) to find out the benefits, if any. For example, if the headlease holder is responsible for repairing the building, if you buy the headlease, you will become responsible for repairing the building.

But if the freeholder is responsible for repairing the building, that won't change.


4. If somebody else buys your headlease, they will become your landlord. You need to read your lease to find out what rights that gives them. (e.g. They might become responsible for repairing your building.)

sazzlelondon

Thanks, the headlease in question is for 2 flats only. But we are in a building split by 3 private entrances and therefore 3 addresses (even though its just the same building). One half is social housing and its the social housing company who are interested in our headlease.

We have a management company that is appointed by some of the flat owners for my part of the building and the 3rd part which is also private properties.

Mine and my neighbour are in a selfcontained ground floor section. No elevator or stairs. The flats above us are social housing accessed from a different door, and next to us is the other set of private flats across 4 floors. 

Im therefore very confused who is liable for what type of repair as there is merely our outer walls and one shared corridor, currently still managed through our service fee to the management agent.

I need to find out if the other set of private flats (approx 25 flats) have had the same offer, to buy their headlease. If they decline and the headlease for them is bought by the social housing co, im sure management of the building maintanence will change and i need to understand what that means for our 2 flats.

As for the ground rent. If the headlease company dissolved in 2013, im wondering how the ground rent company had been charging me all this time and if that was legitmate?