Bought building's Freehold, incidentally becoming flat below's landlord.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82122709#Comment_82122709

Thanks. I agree that gradually building a buffer is probably preferable to suddenly facing 50% of a £40k roof replacement.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82122775#Comment_82122775

Thanks for your input.
Good point about pausing contributions after reaching a predetermined amount (e.g. new roof cost).

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82122794#Comment_82122794

Very good points, including whether the lease precludes building the sinking fund (not in our case).
I like the "asking nicely" approach. In the reverse situation, I'd probably agree to pay contributions, particularly if the new freeholder's service charge bills are cheaper than previously under the Council, sinking fund or not.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82122846#Comment_82122846

Thanks. I agree that transparency is key.
We are saving ourselves the Council's overpriced major works, but not major works altogether. They will happen, and all leaseholders, past and present, should contribute. Partly, I understand that way the spirit of the sinking fund. Think the Council's cyclical works scheme runs every 7 years (when they come up with high bills). The sinking fund could aim to reach a target over a similar period, knowing that major works in a Victorian building are unavoidable.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82123421#Comment_82123421

Good point about trusting others.
Thus far, I have put myself on the line, including paying conveyancers' expensive fees (mine and the seller's), for all leaseholders - of course, including myself. No more cowboy contractors ripping off residents in broad daylight, acting on behalf of the Council. That alone is already saving the other leaseholder money. Then, I already found a way cheaper building insurance offering the same cover - savings which I'll pass to my neighbour.
Therefore, if trust isn't a given thing and must be earned, I'd like to think that hitherto I'm doing a pretty good job. Of course, I can turn into a compulsive gambler (never gambled in my whole life), squander the whole fund on taking the family to Disneyland every year, etc. But that's the whole thing about trust. I trust my bank that they won't misuse their customers' life savings, as if that scenario were completely unprecedented, right?

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82123521#Comment_82123521

Thanks, you're raising very interesting points.
In order to operate within the law, I plan to collect some information from Lease-advice.org
If a ring-fenced trust account is required, so be it. Under Section 42 of the Landlord and Tenant Act 1987, it appears that a sole individual landlord managing their own block can open a statutory service charge trust account directly with a high-street bank as the sole trustee, with all leaseholders of the block as the beneficiaries.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82123792#Comment_82123792

https://www.samconveyancing.co.uk/news/conveyancing/extending-lease-share-of-freehold
Apparently, there's an informal route to achieve this "virtual freehold" (i.e. 999 years). As you mentioned, I'll speak to my solicitor. Perhaps the much-overdue leasehold and freehold reform can help too, but who knows.

eddddy

NorthernSt4r said

But that's the whole thing about trust. I trust my bank that they won't misuse their customers' life savings, as if that scenario were completely unprecedented, right?

That's not really a fair comparison.

1) Banks are regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Amongst many other things, they make sure that the people running the banks are suitable people.

2) The Government's Financial Services Compensation Scheme would repay you, if a bank loses your money / steals your money etc, up to a limit of £120,000

That hugely reduces your risk for you

However in your case.

1) Nobody regulates you. Nobody has checked that you're a suitable person.

2) Neither the Government or anyone else will pay your neighbour compensation, if you lose / steal their money

So the risk to your neighbour is much bigger.

NorthernSt4r said

https://www.samconveyancing.co.uk/news/conveyancing/extending-lease-share-of-freehold
Apparently, there's an informal route to achieve this "virtual freehold" (i.e. 999 years). As you mentioned, I'll speak to my solicitor. Perhaps the much-overdue leasehold and freehold reform can help too, but who knows.

That article is about co-freeholders. You suggest that you are a sole freeholder - so the process described in the article won't work.

In simple terms, if you are co-freeholders, the law allows you to create a deed like this:

• "Mr NorthernSt4r and Mr A.N.Other grant Mr NorthernSt4r a lease extension"

But if you are the sole freeholder, the law doesn't allow you to create a deed like this:

• "Mr NorthernSt4r grants Mr NorthernSt4r a lease extension"

You cannot make a deed with yourself.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82123852#Comment_82123852

can open a statutory service charge trust account directly with a high-street bank as the sole trustee, with all leaseholders of the block as the beneficiaries.

As already mentioned in an earlier post, nearly all main banks have stopped offering accounts for trusts. It comes up quite often in other threads/forums with people struggling to find providers willing to accept all kinds of trust accounts. IIRC, Metro bank and Skipton BS do offer them.

NorthernSt4r

https://forums.moneysavingexpert.com/discussion/comment/82123864#Comment_82123864

Taxpayers recently bailed out banks due to not very prudent behaviour, which is a reminder that these crucial institutions could do with more suitable, principled people leading them.
That being said, you're quite right that the Government Financial Services Compensation Scheme acts as insurance that provides some reassurance, if this one is limited.
Again, for the benefit of all leaseholders, my neighbour would be taking the risk with someone already prepared to dethrone a not-very-just Freeholder operating in a tendentious system. That should count for something, something very good in my opinion. If after that an individual remains distrustful, I guess there's not much anyone can do about it.
"You cannot make a deed with yourself." Very good point, which I'll take to my conveyancer. As not in a hurry on that front, I might wait and see if anything positive comes after the renewed appetite to deliver the overdue Leasehold and Freehold reform, in case the lease extension is a process that becomes redundant.