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Selling a Freehold flat

BlakeClaridge
BlakeClaridge Posts: 14 Forumite
in House buying, renting & selling
I own the freehold to a building along with my flat, which is 1 of 3 flats in the building.
The two flats that I don't own are leasehold with a head-lease.

I am looking to sell my property to a new buyer, but do I have to offer up the freehold to the other leaseholders or headlease?

Or would it be easier to keep the freehold and designate a new lease to the new buyer?

Then possibly deal with the freehold later?

Any help, would be most appreciated.
Many Thanks

Blake

Comments

  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    You can do what you like!

    * Sell the freehold (flat and building)
    * Create a new lease for the flat, sell that, and keep the freehold to the building

    Not sure where the Headlease comes in.
  • BlakeClaridge
    BlakeClaridge Posts: 14 Forumite
    The headlease was put in place to a relative of the seller of my flat, as their solicitor advised, in order to hold onto the future leaseholder renewals.

    I wondered if I offered up the share of the freehold if it would have to go to the headlease before the leaseholders?

    Im assuming if I keep the freehold, then I am responsible for the building, even though each flat would be responsible for the cost.
  • eddddy
    eddddy Posts: 16,431 Forumite
    First Anniversary First Post Name Dropper
    I guess the first comment would be - don't refer to it as a freehold flat, you might scare buyers off.

    You're selling a leasehold flat. And you might also be selling the freehold of the building.

    If you want to sell the freehold, you have to give the leaseholders the right of first refusal (I believe that's the case even when there is an intermediate head-lease).
  • BlakeClaridge
    BlakeClaridge Posts: 14 Forumite
    So would I offer it to the 2 leaseholders or the 1 headleaseholder?
  • eddddy
    eddddy Posts: 16,431 Forumite
    First Anniversary First Post Name Dropper
    Actually, I think I was wrong - it seems you don't have to give any right of first refusal...

    2.3 Immediate landlord

    The RFR only applies when the immediate landlord of the tenants decides to sell. The immediate landlord is the one to whom the rent or ground rent is paid and who will be entitled to vacant possession of the flat when the lease expires. Where a landlord has a lease for less than seven years (or longer, but which is terminable within the first seven years) his landlord is also subject to the RFR in relation to those premises.

    For example, a block of flats is owned by a freeholder, Smith. He grants a lease of the whole building to Brown for a term of 100 years. Brown then grants leases of 99 years for each of the separate flats. In this case, Brown is the immediate landlord of the individual leaseholders of the flats and would have to provide the Right of First Refusal where he intended to sell his lease of 100 years (known as a headlease). Smith, as freeholder, is not the immediate landlord of the flats and would be free to dispose of the freehold (even to Brown) without offering it to the flat-owners first.

    Link: http://www.lease-advice.org/advice-guide/right-of-first-refusal/

    So it seems you can sell the freehold to anyone you like, without any Right of First Refusal.
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    eddddy wrote: »
    I guess the first comment would be - don't refer to it as a freehold flat, you might scare buyers off.

    You're selling a leasehold flat.
    My understanding (maybe wrong) was that this is one of the minority freehold flats.

    The building is freehold. There are two leases for two of the flats. The third flat is owned as part of the building's freehold.

    :huh:
  • BlakeClaridge
    BlakeClaridge Posts: 14 Forumite
    thanks so much for your help, quoting you:
    "The building is freehold. There are two leases for two of the flats. The third flat is owned as part of the building's freehold."
    You are correct

    I wondered if I would have to get a third lease written up for my flat and sell it along with exchanging the freehold into the new buyers name?

    What I think I have established is that as a live in freeholder I don't have to offer up the freehold to the other leaseholders.

    I struggled to get a mortgage initially, but knowing that the leases have written in to them paying a 3rd of all costs, I knew that there was no risk involved, so hopefully the next buyer sees that.
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