Offered to buy a freehold of four flats

NameUnavailable

If the other leaseholders don't want to buy your brother could then offer to buy their shares (or if only one other person wanted to buy they could agreed to buy 50% each etc).

The new freeholders can then agree to extend their leases to 999 years and zero ground rent. You also then have control over the maintenance of the building.

However, I wouldn't want to buy the flat without knowing exactly where I stood on the freehold issue first, nor would I want to start spending money on conveyancing for a flat that's tenanted - they may not want to leave until evicted.

ThisIsWeird

cherry76 said:

The freehold will be offered at £2,000 each 25% plus vat and solicitors fees.The freeholder will serve section 5 if there are no takers it will go to auction. The flat has generated loads of interest. EA said similar offers, brother offered asking price but was asked to submit final,offer.He likes the flat but not sure whether he should go above asking price. The freeholder is renting the flat and lives elsewhere. 

£2k + vat each flat sounds incredibly reasonable to me. It would surely cost much more to just extend the lease durations?
Based on this info, it's the ideal scenario, and a 'no-brainer'. Good luck to your bro.

eddddy

cherry76 said:

The freehold will be offered at £2,000 each 25% plus vat and solicitors fees.

I've never heard of vat being charged on a residential freehold - as I understand it, it's exempt from VAT.

As others say, £8k for the freehold is very cheap, if all 4 flats each have £250 ground rent, which increases.


FWIW, if your brother and/or the other leaseholders decline the £8k offer, they'll get another opportunity to buy at the end of the auction - it's called "Right of First Refusal".

i.e. If the winning bid at auction is £6k, the leaseholders can jump in and buy the freehold for £6k.

But if the winning bid at auction is £10k, the leaseholders can still jump in and buy the freehold - but it would cost them £10k