freehold flat?!? good or bad idea??

maverickstrike

Can anybody help please? I have recently had an offer accepted on a ground floor freehold flat which is one of 4 in a property. However, this appears to have raised eyebrows with many who I have spoken to about it, including solicitors. Apparantly the other 3 properties are also freehold and I know that they have leases however the estate agent hasn't been able to clarify with me how long their leases are for.
I do know that there is no 'maintenance agreement' as such, and that presently the occupants decide things in an 'ad hoc' fashion?!?
Is this scenario likely to be unwise for me to get into? And are the lengths of the leaseholds relevant and if so, how could that effect me?
sorry, very new to all this.
thanks

poppysarah

ad hoc means trouble. Whoever can't stand the leaky roof most pays. If you're on the ground floor then its prob not as important -

chappers

Now you say the other properties are freehold but you also mention leases they are either freehold or leasehold.
i would run amile if there is no formal management agreement not to mention that most lenders won't lend on freehold flats.

Liney_2

It may be worth speaking to the other flat owners - they may be interested in collective enfanchisement/buying the freehold, you could get some money off the property to put towards the cost of that possibly.
I have just sold my leasehold flat which was in a converted house with 3 other flats.
The people that bought my place want to buy the freehold at a later date and they spoke to 2 of my neighbours before we exchanged to discuss the options. Two out of the other 3 flats also wanted to buy the freehold and I believe once you have done that you can agree a maintainance plan.
one of my neighbours was the pro-active one in getting maintenance done and we just split the cost accordingly. It worked for us but its not without hiccups - are you planning on living there for a long time?
Our place was only going to be a 5 year home before we had a family etc so we wouldn't reap the benefits of paying out for the purchase of the freehold.
Buying a freehold does add value to your property though i believe.

minigirl

Technically there is no such thing as a Freehold flat, a flat can only have a shared interest in a Freehold. I suspect the current owners of the flats put together and bought the Freehold building sometime ago and as such there is no need to employ a Management Company. I expect what they mean by 'ad hoc' is that as and when some works need to be done they split the bill between all the flats whereas a Management Company would levy the charges monthly/quarterly/yearly.

I wouldn't have thought the term left on the other Leases matters but for peace of mind you could just check with your Solicitor.

Your Solicitor should find this out anyway but I would make sure they find out what the last works were to be carried out, when were they carried out, how much was charged per owner and whether there are any works which the owners think will need to be carried out in the near future. The owners should have instructed one of the owners to be Secretary who should be able to answer these questions on behalf of everyone.

Cazza

Sorry minigirl, freehold flats do exist, although not in most parts of the country; they are not too unusual in my part of West Sussex. Usually it happens when a freehold house has been converted to flats and no one has ever bothered setting up a lease.

Maverickstrike, they are difficult to get a mortgage on and this will affect not just you, but anyone that is looking to buy the flat from you in future years. There's a double whammy, because it's a flat your likely purchaser will be a FTB, the people who often need the greatest flexibility in terms of lender choice.

These flats are often significantly cheaper, because of these problems. My opinion would be not to touch it with a barge pole. The housing market is wobbly enough at the moment without buying a flat that has significant potential legal and maintenance problems in the future.

minigirl

Cazza wrote: »

Sorry minigirl, freehold flats do exist, although not in most parts of the country; they are not too unusual in my part of West Sussex. Usually it happens when a freehold house has been converted to flats and no one has ever bothered setting up a lease.

Even if this is the case you wouldn't own the whole Freehold, just an interest/share in it. When you own something Freehold you own everything within your boundary from the ground up into the air. Therefore if you owned the whole of the Freehold on a flat you would then, theoretically, own the flat above you.

I would get your Solicitor to check exactly what the case is. I have come across matters where the owners of all the flats have bought the Freehold interest together and got rid of the Management Company for ease and to save money and it hasn't caused problems. However if it is as cazza says and they just haven't bothered to put enter into Leases then I would stay away.

Cazza

Minigirl, you only have a share / interest of the freehold if the flat is leasehold with a share of the freehold; this situation is fine. In maverickstrike's situation, all the flats in the building are freehold and the problems associated with this just start with the ones you've identified above!

maverickstrike

Thanks to you all for your help. All quite confusing, but as mentioned above; with the 'wobbly' market as it is at the moment, I think I will steer clear.

minigirl

Cazza wrote: »

In maverickstrike's situation, all the flats in the building are freehold and the problems associated with this just start with the ones you've identified above!

But maverickstrike's post does state that the other flats also have Leases.

Either way, if I were you maverickstrike, I would get clarification from your Solicitor exactly what the situation is.