Favourable new Leasehold under Share of Freehold

Alanisakiwi

Hi House Buying Guru's

I'm looking to buy a property with the following details

• The owner originally owned the full freehold, then split the house into two flats, kept the freehold, but assigned Leaseholds to each of the two flats (and lived in one of the two). 
• He is now selling all interests - so is creating a share of freehold for each Leasehold owner to sit with the Leaseholds for the property. 

What this means is that the Leasehold I am signing up to, I understand, can be a whole new Leasehold, with much more favourable terms than if I had no say in the freehold. 

For example, there is a term that says "there is no right for the leaseholder to do any alterations". 

Naturally, I'd like to remove this clause. Which then begs the question - what other clauses should I negotiate out. 

Has anyone had any experience or examples of leaseholds that are favourable to the share of freeholder? 

Big thanks in advance!

Mark_d

So if you buy, then you would own a 50% share of the freehold.  You would effectively be a joint Lessor as well as being one of two Lessees?

I assume the lease conditions were written to be fair on both leaseholders and protect the value of the property for leaseholders as well as the freeholder.

Allowing a leaseholder to add an extension/conservatory would benefit the leaseholder of the ground floor flat but not necessarily the other flat.  Adding a satellite dish might benefit a leaseholder wanting Sky TV, but only service to spoil the appearance of the building for the other leaseholder.

loubel

Owning (a share of) the freehold does not alter the terms of your lease. If you wanted to change these you would need the consent of the other freeholder/leaseholder. What alterations are you considering?

DullGreyGuy

Alanisakiwi said:

Hi House Buying Guru's

I'm looking to buy a property with the following details

• The owner originally owned the full freehold, then split the house into two flats, kept the freehold, but assigned Leaseholds to each of the two flats (and lived in one of the two). 
• He is now selling all interests - so is creating a share of freehold for each Leasehold owner to sit with the Leaseholds for the property. 

What this means is that the Leasehold I am signing up to, I understand, can be a whole new Leasehold, with much more favourable terms than if I had no say in the freehold. 

For example, there is a term that says "there is no right for the leaseholder to do any alterations". 

Naturally, I'd like to remove this clause. Which then begs the question - what other clauses should I negotiate out. 

Has anyone had any experience or examples of leaseholds that are favourable to the share of freeholder? 

Big thanks in advance!

If you are buying the flat he lived in then you'd assume it already had favourable terms however what was more the case then but isn't the case now, anything that previously required him to get freeholder permission was only him asking himself. 

Going forward as it'll be a shared freehold you will need the joint permission of yourself and your neighbour and the two of you may not see eye to eye on matters. With only two equal freeholders you need to ensure there are mechanisms to resolve disputes else people can get petty and end up refusing each other everything which puts you in a worse position than a third party freeholder potentially. 

Your neighbour is likely to have mirror terms too so saying you can do anything you like means they can too which is why it's more common to retain the requirement for approval of the freeholder in the lease. 

NameUnavailable

The leases will be the same but should have an amendment to 999 years and peppercorn ground rent.

The freehold should be owned  50/50 by the two leaseholders - this could be via a company with 1 share each. It's a good idea to have a deed of trust drawn up to cover things like agreeing to co-operate with each other if selling the property and how you resolve any dispute over works that may need doing in the future.

Alterations to leasehold properties are usually not allowed unless the freeholder permits - so in this case you'd need the other freeholder to agree to any works (as would they too) so you can see where the deed of trust helps.