Help with transfer of Share of Freehold

kanna12

I'm currently in the process of buying my first property which is a share of freehold with the flat above. 

I flagged an issue with my conveyancer when I saw 'Purchase of Share of Freehold' in the financial statement draft. When I explained that the current owner has a share of the freehold already and we just want to have that transferred into our names during the purchase process, she told me that this would be done after completion, but it would require further legal advice to do this and it commonly costs around £1.5k to transfer. 

Is this correct?

We were under the impression that if you buy a house that is share of freehold, this should be transferred to you with the deeds. 

Any help would be much appreciated!!

eddddy

The term "Share of Freehold" is a bit misleading. 

So the situation as it stands at the moment is very likely to be this:

1. Mr A owns a leasehold flat (Flat 1)
2. Mr B owns a leasehold flat (Flat 2)
3. Mr A and Mr B jointly own a freehold building (which contains flat 1 and flat 2)

Assuming you buy Flat 1 from Mr A... the final situation will be 

1. Kanna12 owns a leasehold flat (Flat 1)
2. Mr B still owns a leasehold flat (Flat 2)
3. Kanna12 and Mr B jointly own the freehold building (which contains flat 1 and flat 2)

So it sounds like your original quote was for transferring ownership of the leasehold flat (Flat 1) from Mr A to Kanna12

And there's an extra fee of £1.5k for transferring ownership of the freehold building from "Mr A and Mr B" to "Kanna12 and Mr B".




Or there's an alternative possibility where the current situation is:

1. Mr A owns a leasehold flat (Flat 1)
2. Mr B owns a leasehold flat (Flat 2)
3. A company called XYZ ltd owns the freehold building (which contains flat 1 and flat 2) - and Mr A and Mr B are shareholders (i.e. owners) of XYZ ltd

And the solicitor is quoting you £1.5k for making you a shareholder (i.e. joint owner) of XYZ ltd - and Mr A will stop being a shareholder.

kanna12

Thanks so much for your response, it's very helpful! 

Our situation would be the first circumstance you outlined. Do you know why this would not be done until after completion and at an extra cost?

I have read online that the transfer of the freehold would be included in the TR1 form. Whereby the Mr A and Mr B
would be required to sign along with us. Everything seems very unsure when it comes to share of freehold online, so this may not be the case! 

Thanks again for your help!!

eddddy

I'm not sure if I understand all your questions, but maybe the following comments will help...

There will be two TR1 forms...

• One TR1 for dealing with the transfer of the leasehold flat (From Mr A to Kenna12) signed by Mr A and Kanna12

• Another TR1 one for dealing with the transfer of the freehold building (from "Mr A and Mr B" to "Kanna12 and Mr B".) signed by Mr A, Mr B and Kanna12 (usually).

Presumably, there is an extra cost because the solicitor originally quoted you a fixed price for just transferring a leasehold flat.

And he later found out that there is a freehold building to transfer, as well. So he is charging you extra money for the extra work involved in doing the second transfer.

If that's not the case, and your original quote was for doing 2 transfers - you should challenge the extra £1.5k charge.



I guess the solicitor is completing the 2nd transfer a bit later than the 1st one - just because he's very busy on that day. (If it's a Friday, there are often lots of completions on Fridays.)

But you can ask the solicitor if there are any risks associated with completing on different days.

kanna12

Thank you again for your response.

The conveyancer said that transferring the freehold is something they usually do on completion and would require a different solicitor. She said that fee was an estimate of what would be charged. I assume this is excluding further solicitors fees. 

They have always known that the property was share of freehold, hence the confusion. We would expect this could be done at the same time as the transfer as we’re in no rush.

The reason I questioned it was because they included ‘purchase of freehold’ in our financial statement. This was around £400 and done during the sale process.

i suppose it’s really one to chat with the conveyancer about, but we’re a bit concerned as communication hasn’t been amazing so far. 

Thanks again for your help. It’s really appreciated! 

kanna12

Sorry, when I say this ‘This was around £400 and done during the sale process’ it hasn’t been done yet, but is in the quote I guess. Thanks again! 

loubel

£1500 is a lot just to transfer the freehold and it is not normal for this to take place after completion. Usually it would be in the contract that the seller transfers their share in the freehold on completion and their solicitor arranges for the co-freeholder to sign in preparation. I definitely think you need a conversation with your solicitor to find out why they are not prepared to deal with this for you and why you weren't told earlier. 

kanna12

That makes sense.

Thank you so much for your help it’s really appreciated.