Pick legally wired brains please?

katieowl_2

We are intending to sell up and move this summer. We are downsizing to get rid of our mortgage by moving out of London. I don't have a lot of ££ floating about so want to make sure I get hold of the 'right' specialist advice. If anyone can point me in the right direction I'd be grateful.

My Property is the lower two floors (1000sq ft) of a BIG Victorian house in a desirable road with great public transport links (any offers LOL!) I am the freeholder of the property.

UPSTAIRS is another flat, for which I am the 'freeholder' it's got a lease with 72 years remaining, and the new owners bought it last summer for £300,000. They opted not to renew the lease at the time of buying, an unwise move on their part IMHO, but they were apparently aware what the cost of extending would have been (approximately - as were we all).

Now when I sell, as the freeholder, what would be my best option?

To sell outright as a Freehold and hope to get extra on my property to cover the 'benefit' of the lease for upstairs? Will the lease on upstairs be seen as an investment? Is there a price differential between freehold and leashold properties these days?

Can I sell their lease on to my new purchaser? Do I have to offer them the freehold or a share of the freehold?

Do I Sell my flat as a leashold in it's own right and keep both leases? Hoping to thereby at some future point the leaseholder upstairs will extend the lease? (I think they will possibly not stay too long, I'd be surprised if they could sell without extending)

Would I be liable for Tax of any kind if I retained the two leases? (to be frank I'd be glad not to have the responsibility as I have to cover the insurance on upstairs and claim it back)

What sort of person should I be asking these questions of? A solicitor? an Estate agent? Both?

Can anyone give me some pointers?

Regards

Kate

Doozergirl

I don't think you'd see the benefit of the upstairs lease if you were to sell the property freehold. Most buyers would not understand the benefit of being the freeholder of a property with a short lease.

Do you have a lease for your property? If there is no lease then I am sure that you do not have to offer a share of the freehold to the leaseholders.

Very honestly, but perhaps without answering all your questions in depth, I would keep that freehold as it's a beautiful little investment that will actually cost you only the admin of separating the freehold from the flat. Ensure your own flat has a decent length of lease so that isn't an issue with potential buyers and sell it like that. While you are at it, you can set yourself a nice bit of pocket money each year in the form of ground rent. There isn't much, if any, difference in the price of a good lease and a freehold.

You can set the leases so that they self maintain and don't have to worry about service charges etc and you don't have to worry about the admin of organising insurances.

So you definately need to speak to your solicitor before you even put the place on the market and they will run through your options . A little bit spent now will see you reap the reward eventually. Estate agent would be pretty useless, especially if they are a salesperson and not a RICS member (ie. a qualified surveyor)

katieowl_2

Thank you Doozergirl, that is very helpful.

I wasn't sure if anyone would see the benefit of the lease that will need extending either I did look into this a bit last year, and I think that it would be set to pay the sort of sum you wouldn't say no to, especially as according to Kirsty (Relocation) we are set to see a massive rise in the next five years owing to the East London Extension, work on which began this end at Xmas.

We definately don't have a lease for our half of the bulding, just the freehold.

I can see the benefit of a long lease for ours, and also of a repairing lease (like upstairs is already - 50/50 split on externals), and on my flat a decent ground rent (upstairs pays me £50 a year and no service charge, which scarcely covers the expenses!) and even a service charge. Can't get my head around how they'd sort the insurance? But like you say - a job for the solicitor!

I'll give one a ring and see if I can get a fixed fee interview. We've been here 21 years, and never actually sold a property before so we are somewhat elderly novices! LOL!
Thanks again

Regards
Kate

Doozergirl

Good Luck Kate. It's a good, albeit slightly complicated position to be in