Freeholder very keen to sell freehold

Parisse

Hi 

i am looking to buy a property and was thinking about making an offer on a leasehold flat.

Before even placing an offer the estate agent is repeatedly calling out that the freeholder is very keen on selling the whole building freehold at a discounted price. In fact there is another flat in the building who has been recently bought. 

Estate agent is pushing i should take advantage of the offer. They said even when the flat was initially bought by the current owner the freeholder made the same offer to both flats owners but they were not interested in buying it. 

I am a bit wary of the agents behaviour and i am not sure why a freeholder would be so keen to sell the freehold? Could that potentially be a red flag? 

propertyrental

Being a freeholder can be a hassle if you are not a) a resident in the building or b) a professional investor with a portfolio of freeholds. You have to manage the repairs, the insurance, collect the service charges from leaseholdrs, produce annual accounts etc.

That may be why he wishes to sell.

As a leaseholding living in the building, yes you'd be taking on those duties but it means you' have control over the maintenance of your own building which can be a huge benefit.

NameUnavailable

How manhy flats, what kind of building, how much do they want for the freehold?

Generally owning the freehold would be a great thing, but at the moment you need to be careful with regards to building safety issues and freeholders obligations.

Parisse

propertyrental said:

Being a freeholder can be a hassle if you are not a) a resident in the building or b) a professional investor with a portfolio of freeholds. You have to manage the repairs, the insurance, collect the service charges from leaseholdrs, produce annual accounts etc.

That may be why he wishes to sell.

As a leaseholding living in the building, yes you'd be taking on those duties but it means you' have control over the maintenance of your own building which can be a huge benefit.

thanks for the reply! i am definitely considering.. It seems that the current lease terms are pretty strict in terms of internal alterations (ex:wood floors on the first floor not allowed etc) so i must assume i would still inherit that lease terms owning a share of that freehold?    

Parisse

NameUnavailable said:

How manhy flats, what kind of building, how much do they want for the freehold?

Generally owning the freehold would be a great thing, but at the moment you need to be careful with regards to building safety issues and freeholders obligations.

NameUnavailable said:

How manhy flats, what kind of building, how much do they want for the freehold?

Generally owning the freehold would be a great thing, but at the moment you need to be careful with regards to building safety issues and freeholders obligations.

indeed, it's 2 flats, ground floor recently bought and new owners are interested in buying the share of freehold too. 10k, as i was commenting above also the current lease clauses are pretty strict in regards to internal alterations (no wood floor allowed on first floor etc) those conditions would still stay the same even if i bought a share of freehold? Unless myself and the other owner would agree to amend specific clauses in the lease? 

NameUnavailable

Yes, buying the freehold doesn't change anything in the leases. But you can, as joint freeholders, decide to amend the lease - you would need to get that rewritten etc., or just agree stuff between yourselves but that is OK until one of you wants to sell and a new leaseholder doesn't agree with your non adherance.

annetheman

I would absolutely take the offer; maybe they're keen to offload as there is new building safety legislation coming in (currently ping ponging) that will better define the fire safety responsibilities of the freeholder, making them liable in a way they currently aren't hence the whole building safety scandal. It shouldn't be a problem for a building with only 2 units, you will be able to decide what you do and don't amend in the building and procure the cheapest suppliers where needed. This is much MUCH preferable to the alternative external freeholder. I'd see if the other flat wants to co-own now on in future.

ThisIsWeird

Another vote for 'buy'.
You can keep the lease terms the same as they are, but if you wish a change - such as allowing wooden floors - then all the two if you need to do is 'agree' this. You can 'breach' lease terms until the cows come home - or until someone obliges the FH to act.
And I'll be blunt - if I were buying the ground floor flat, and discovered the lease had been changed to allow timber floors, I'd be worried. I would fear a very strong chance of the noise being intolerable, and with nothing I could do about it. So hopefully you'll be considerate, and will discuss and agree this with the ground floor occupants?
Sharing a FH between just two parties can also be tricky as there won't be a majority on tricky issues, so some decisions could end in stalemate. Like wooden floors...
But, overall, having the FH gives full control over maintenance, choice of insurers, etc, but also over any significant changes such as adding an extension, changing the garden layout, adding parking, extending lease terms, whatever. Generally, a huge plus.

pieroabcd

I thnk that as far as housiung goes the only safe approach is: share absolutely nothing!
In your place I'd try to buy the whole FH and make the rules that suit YOU. If they suit the other leaseholder much better..

gm0

Can't make rules with whole or share.  If they contravene existing lease.  Without the agreement of the leaseholder to the change as well as winning the vote of freeholders. 

Or you wait until the lease ends and is not extended on current terms via that process.  Good luck with that.

No sane ground floor flat leaseholder would agree to remove a restriction like that without something really good in return.  Rear extension permission for ground floor springs to mind as an example which adds real value to their lease and thus provides an incentive to agree a basket of new terms in revised leases.

Welcome to democracy.  See also BTL absentees vs owner occupiers, pet policies, running a business policies, AirBNB etc.

propertyrental

no wooden floors on the 1st floor is actually a very sensible lease term - I wouldn't change it!