joint freeholder of leasehold flat

Woooodsy18

there are 4 flats in our block of flats.  each flat owns 25% of the freehold and they are leasehold flats.   the 2 flats on the top floor are owned by 2 separate individuals (me being one) and the the 2 ground floor flats are owned by one /the same person.  we (the 2 top floor) flats have offered good money to buy the freehold share of the two ground floor flats in order to build into the loft.  they have refused the money and have not asked for more just refused to give it to us!   the owner of the 2 downstairs flats is in the process of selling ONE of the two flats and i have just had a message from them asking for my lawyers details?  why?  as you can probably tell its not been a great relationship with them and there have been a few other issues with garden access etc.

questions:
1). why do they want my lawyers details - i can do any paperwork
2) can i stipulate that i want the freehold to be owned by a company and managed before I sign over the freehold to a new buyer?
3) also can i stipulate that we need to get a joint freehold buildings insurance otherwise our separate ones will be void 
4)i am worried that part of the garden boundary that was moved during lockdown has not been put back to its original
5).does the seller need to offer us ROFR of the freehold before selling the flat to the new buyer with the freehold?
6) any suggestions as to how I can get that freehold share!!!

please let me know any experience or advice

BarelySentientAI

Welcome to the forum.  Some answers for you to consider:

1)  Because most people use a solicitor to act for them in transactions.  Especially if there is already "not a great relationship".
2)  You're not signing over the freehold to a new buyer.  See also 3)
3)  You can stipulate whatever you like, and they can choose to refuse.  Stipulating things by holding a transaction to ransom is unlikely to result in any sort of sensible resolution.
4)  Then the freeholders between them need to apply whatever procedure is documented to get it sorted.
5)  No, they have no reason to offer you first refusal (or any refusal) in selling the flat.
6)  I think you might come across to them as if you are entitled to it.  They don't have to sell it to you.  Being aggressively demanding about it and trying to 'stipulate' how other people should be acting will not get you the result you want.

Woooodsy18

thanks BarelySentientAI
Its not that i think I am entitled to it (the freehold) its just that its useless to them - no ground rent or s/charges etc so no income and they obviously cant extend into the loft from the ground floor so neither of us can understand why you wouldnt take some extra cash lump sum!  but they have been incredibly stubborn and awkward during their time so its not really surprising - I was just enquiring to see if the ROFR on the freehold before selling the flat on with it - it would seem to me to be the decent thing to do but different strokes etc !

you dont mention anything about having a ltd co / management co for the freeholders as I have been advised by my lawyer and insurers so just wondering if this is normal

BarelySentientAI

Woooodsy18 said:

thanks BarelySentientAI
Its not that i think I am entitled to it (the freehold) its just that its useless to them - no ground rent or s/charges etc so no income and they obviously cant extend into the loft from the ground floor so neither of us can understand why you wouldnt take some extra cash lump sum!  but they have been incredibly stubborn and awkward during their time so its not really surprising - I was just enquiring to see if the ROFR on the freehold before selling the flat on with it - it would seem to me to be the decent thing to do but different strokes etc !

you dont mention anything about having a ltd co / management co for the freeholders as I have been advised by my lawyer and insurers so just wondering if this is normal

Sort of two ways of doing it - each of the flats own 1/X of the freehold, or a company owns the freehold and each flat 1/X owns the company.  Not exactly like that, but it's a useful way to think about it.  The first is more common when X is small (there are less flats in the building) and the second more common when X is big (large blocks etc).

If I owned a share of freehold for a building that I lived in, I wouldn't sell it either.  Nothing to do with being stubborn.  As a joint freeholder, I have a say in what goes on with the building, I get consulted on things that affect the building, I am part of the structure that approves changes to the building and to leases, I am a voice in the enforcement of the lease terms and don't have to rely entirely on someone else's interpretation...  Nowhere near as simple as "I can't use the loft so I might as well sell".

You have completely misunderstood what a share of freehold is and does, hence why you are thinking that someone selling it to you would be "the decent thing".  Whether this is coloured by your perception of the individual, I don't know.

ThisIsWeird

Won't the relevant quarter-FH be sold to the new ground floor flat owner? 
In which case, a democratic decision should decide what can be done with the loft?
My only experience of this was in my first property, one of four flats in an old house. We managed to buy the FH, and set up a management co of which each was a 'director'. All decisions were then based on discussion and a vote. Buildings insurance should be a single, communal, event. It also makes sense to have a maintenance fund to which all contribute.
I cannot see the new flat owner buying if their immediate neighbour is holding on to 'their' 25% of the FH, when the other two flats each have their own.
Could you clarify, Wooodsy?
A separate - but potentially connected with the sale - issue is this garden boundary. How certain are you - how easy is it to determine - that there has been a 'breach'? And who is the guilty party?! If the ground floor dude, then hopefully they've done the right thing and declared this in their SIP.

eddddy

Woooodsy18 said:

...obviously cant extend into the loft from the ground floor so neither of us can understand why you wouldnt take some extra cash lump sum!

Just to clarify this - are you taking into account the development value of the loft, in making your offer for the freehold?

Is part of the issue that the other joint freeholders think the loft is worth more than you are offering for the freehold? (Plus they don't want to lose control/influence over management of the building.)


Another approach would be to offer the joint freeholders a lump sum for the loft, and for consent to convert it. (So they continue to be joint freeholders of the building, but the loft is added to your flat).

Woooodsy18

ThisIsWeird said:

Won't the relevant quarter-FH be sold to the new ground floor flat owner? 
In which case, a democratic decision should decide what can be done with the loft?
My only experience of this was in my first property, one of four flats in an old house. We managed to buy the FH, and set up a management co of which each was a 'director'. All decisions were then based on discussion and a vote. Buildings insurance should be a single, communal, event. It also makes sense to have a maintenance fund to which all contribute.
I cannot see the new flat owner buying if their immediate neighbour is holding on to 'their' 25% of the FH, when the other two flats each have their own.
Could you clarify, Wooodsy?
A separate - but potentially connected with the sale - issue is this garden boundary. How certain are you - how easy is it to determine - that there has been a 'breach'? And who is the guilty party?! If the ground floor dude, then hopefully they've done the right thing and declared this in their SIP.

thank you.
yes the new buyer of the flat has share of FH inc in purchase.    I have been trying to get all shared freeholders to get a joint building insurance but they insist on being happy with theirs!  i have said its not really a question of being happy its that if something goes wrong we will have 4 x insurance companies and mine  has said it will probably be void!  so am trying to make them understand this.

Ideally i would like a co set up with us as directors to manage it but dont think this will be wanted as have mentioned it before!

not sure what an SIP is sorry!  but yes its the dude selling his flat that moved boundaries so hoping that he either declares this as we will need to approve it or has just put it back as previously so he wont need approval of other FH and change of land registry

Woooodsy18

eddddy said:

Woooodsy18 said:

...obviously cant extend into the loft from the ground floor so neither of us can understand why you wouldnt take some extra cash lump sum!

Just to clarify this - are you taking into account the development value of the loft, in making your offer for the freehold?

Is part of the issue that the other joint freeholders think the loft is worth more than you are offering for the freehold? (Plus they don't want to lose control/influence over management of the building.)


Another approach would be to offer the joint freeholders a lump sum for the loft, and for consent to convert it. (So they continue to be joint freeholders of the building, but the loft is added to your flat).

hi Eddy thank you
we offered £20k so not full development value no but its not the amount as we have asked and they have said its not the amount - they just will not sell.    maybe offering this money for consent to convert the loft and they continue as joint FH but loft is added to the top 2 flats?  maybe this is an option - not sure how this works re roof maintenance etc as cant imagine they would want that??

RHemmings

Woooodsy18 said:

eddddy said:

Woooodsy18 said:

...obviously cant extend into the loft from the ground floor so neither of us can understand why you wouldnt take some extra cash lump sum!

Just to clarify this - are you taking into account the development value of the loft, in making your offer for the freehold?

Is part of the issue that the other joint freeholders think the loft is worth more than you are offering for the freehold? (Plus they don't want to lose control/influence over management of the building.)


Another approach would be to offer the joint freeholders a lump sum for the loft, and for consent to convert it. (So they continue to be joint freeholders of the building, but the loft is added to your flat).

hi Eddy thank you
we offered £20k so not full development value no but its not the amount as we have asked and they have said its not the amount - they just will not sell.    maybe offering this money for consent to convert the loft and they continue as joint FH but loft is added to the top 2 flats?  maybe this is an option - not sure how this works re roof maintenance etc as cant imagine they would want that??

As a buyer, I would not want to be in a situation where I'm in a building with four flats, and the other three own 100% of the freehold and I own none. 

eddddy

Woooodsy18 said:

maybe offering this money for consent to convert the loft and they continue as joint FH but loft is added to the top 2 flats?  maybe this is an option - not sure how this works re roof maintenance etc as cant imagine they would want that??

Remember that it's leaseholders who have to pay for building maintenance - not freeholders. Extending flats can be a 'can of worms'.

You have to negotiate / agree maintenance terms for the roof with the other leaseholders - and update the leases accordingly.


For example:

Assuming that each leaseholder is currently responsible for 25% of building maintenance costs... 2 options might be:

Option 1

• The larger top floor flats each become liable for 35% of the building maintenance costs. 
• The smaller ground floor flats each become liable for 15% of building maintenance costs

Option 2

• Every flat continues to be responsible for 25% of the maintenance costs of the original building 
• The top floor flats become responsible for 100% of the maintenance costs their converted lofts

Woooodsy18

thank you Eddy
option 1 might be appealing to the ground floor flats - i know if i was in there and offered cash and less maintenance I would prob go for it!