Splitting the Costs of a Freehold flat

JiggerandJolley

My daughters are buying the freehold of their building along with the only other flat in the property.  They have a tiny studio flat which only one of them is able to live in at present, with an uninhabitable, undeveloped basement which they hope eventually they will be able to develop. The flat above is over 2 floors and has 3/4bedrooms.  The valuer determined the freehold split at 35/65.  They are setting up their own management company for the property and are running into difficulties as the people upstairs are adamant all bills should be split 50/50 despite the fact that they have many more windows and part of their flat juts out from the main body of the building and therefore has an extra roof.  Are we being unreasonable in thinking there should be some recognition of this? We're assuming there's no legislation covering this so would be grateful if anyone has come across this problem.

Woodstok2000

What bills are we talking about that would be shared by the owners of different flats?

JiggerandJolley

It would be bills for maintenance and repairs of the outside and shared areas of the property. Each flat would pay something monthly to cover known costs plus some extra for emergency repairs. Similar payments were paid previously to the Freeholder when they were leasehold flats.

Woodstok2000

I'd say everything should be split equally. Everyone has an equal interest in maintaining the building, regardless of the exact square footage of roof space they sit under.

Whenever I've lived in a flat, any costs like that have been split by the number of flats, not by size, number of windows etc.

JiggerandJolley

Thank you, Woodstok, it's good to get another opinion.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81881645#Comment_81881645

I can give you an entirely different perspective.

I live in a 4 floor victorian townhouse, converted into 4 flats ( a flat per floor).

When we established our Freehold reversionary company which owns our inidividual 995 leases , each flat lease required the owner to be responsible for repair and maintenance of their own demised windows and individual front doors into their units and only the brickwork, roof and guttering (as well as buildings insurance) fell to be split in 25% shares by way of future repairs and maintenance.

We had thought this out very carefully when we bought the freehold and created new leases since 1 owner had completely replaced their windows with expensive sash double glazing while others including myself stayed with the original victorian single glazed timber sashes.

Currently the owner with the double glazing, went on to acquire the flat below and installed similar double glazing there. He has now become liable for 50% of general building maintenance/insurance as a result.

In my view your daughter's being burdened with disproportionate costs related to windows of the upper floor unit would certainly not have occurred on my watch. That obligation would sit solely with that owner who in my opinion are seeking to exploit your daughter's lack of negotiating nous.

user1977

https://forums.moneysavingexpert.com/discussion/comment/81881617#Comment_81881617

How are costs currently split in the leases?

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6655051/splitting-the-costs-of-a-freehold-flat

The company would pay the full costs and the leaseholders would pay their proportion of the service charges in line with their existing leases.

What's the current splits?

JiggerandJolley

Re. how the costs have been split in the past: for the past couple of years, since my daughter's bought the flat and before that when the previous owner was there, the charges paid to the council (the freeholder) were divided equally. However, this year the notification of how much each flat would pay came out as a higher amount for the upstairs flat (roughly in line with the freehold valuation split). I think there may have been some recent legislation around leaseholds and wonder if this has had a bearing or if it has been prompted by the application to buy the freehold? The owners upstairs were as keen as my daughters to buy the freehold, but it has been my daughters who have done all the work, finding solicitors, valuers, filling in paperwork etc, and now they are being blamed by upstairs for their bill going up. As this has all happened just as the Freehold purchase is going through my daughters have agreed to pay half the buildings insurance costs, but now have to agree the terms of their leases with the upstairs flat, which isn't going to be easy.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81881725#Comment_81881725

I wssnt totally clear but my comment aligns with this exactly. Costs to be split equally are only those relating to communal areas or structures - roof, building structure, main door etc. Everyone is individually responsible for their own flat, including windows.

Woodstok2000

If your daughters were expecting to pay 50% this year, and in future years, they'd be no worse off by offering to pay the difference for this year and revert to 50/50 for future years. That gesture of goodwill could go a long way to smoothing through any lease agreements and the cost might even be less than all the time and effort spent resolving disputes.