Buying a share of freehold

br3andbr2

I am interested in a property which is part of a freehold (larger parade converted into flats and offices). 

I am going around in circles where my LISA provider says that they need the percentage of share of freehold, length of lease etc to check if a lender will consider this.

The vendor states the freehold is is in a name of a company. They will need the name of the buyer so that he can put a share of the freehold in someones name so this would have to be done alongside conveyancing of a sale. 

My concern is that the process can take up to a year? I also worry that in case there's a dispute amongst the vendor's kids, then the sale might fall through.

Would you advise going ahead with this purchase? Shall I make an offer?

gm0

Not without you getting more seriously to grips with what is going on so you can work out what that offer should be.

LISA provider wants to know "facts" about what you are buying.  So do you.  The lease you are assigning is the place to start.  If registered at land registry.  If you don't already have it - this can be downloaded.  

As can - if you wish - adjacent title leases.  This costs money (for the downloads) but can accelerated your diligence while you wait for the other side and any agent to get their papers together.


The conveyancing of "share of freehold" is variable. Based on how the freehold is held. In a limited company by guarantee. One method.  Shares.  Another. And so on. This affects "who does what and when" to some degree.  

But it is entirely normal for a freehold interest to be conveyanced alongside a lease assignment for a sub-unit where the leases have purchased the freehold collectively and are holding it in common in some manner.  And want the shares of freehold to travel alongside the leases.  

Records of this setup can be split across the leases (which may not be written with this share of model originally).  And the Ltd company articles - if a company is used to own the freehold which people own parts of.  Nobody owns their freehold.  They have a share or membership of a company which owns the entire freehold.

All this assumes a "held in common" freehold at some point acquired by the leaseholders.  

There are a number of other possibilities from history of a building on how you get to where this particular one is.  How it was built. Split, reconfigured etc.  Along the way.  So the above could all be completely wrong.  It depends on the title plan (and any lease) you are buying.  And any % share of the overall site that this is associated with.  

Clearly you need to understand what you are buying.  You have a demised space - yours.  And some ownership but also responsibilities for the overall structure and any communal bits.  That comes with being a part owner of the freehold company.  Anything leaseholders would be charged. You pay via service charge.  

Anything not rechargeable to leaseholders - your vehicle you own part of - needs to tap you all up and pay that. There being nobody else providing funding.   Disputes and running out of money vs liabilities can arise.  This can make units/leases unsaleable due to the liabilities, condition and uncertainty.

Understanding what it is - is a clear prerequisite of buying something like this. As is a good hard look at condition - roofs etc.  Proper surveys etc.

If all that sounds very intimidating then you probably ARE looking at the wrong property.

DullGreyGuy

br3andbr2 said:

I am interested in a property which is part of a freehold (larger parade converted into flats and offices). 

I am going around in circles where my LISA provider says that they need the percentage of share of freehold, length of lease etc to check if a lender will consider this.

The vendor states the freehold is is in a name of a company. They will need the name of the buyer so that he can put a share of the freehold in someones name so this would have to be done alongside conveyancing of a sale. 

My concern is that the process can take up to a year? I also worry that in case there's a dispute amongst the vendor's kids, then the sale might fall through.

Would you advise going ahead with this purchase? Shall I make an offer?

It's common for the freehold to be with a company, you will effectively be buying the vendor's allocation of shares in the freeholder as well as the lease on the property. The total number of shares issued is public record and you can check on Companies House. The vendor should be able to tell you how many shares they hold so if you divide the later by the former its effectively what your share would be. 

No matter what property you are looking at others may advise the vendor against proceeding with you.