freehold/leasehold insurance question...(2 Posts)
I am selling a ground floor garden flat of a two storey Victorian conversion property. I own the freehold over the whole property and there are two leases for each flat so the owner of upstairs pays ground rent every year. At the moment we are each paying our own insurance for our own flats to the terms of the lease.
Now both flats have 79 years on the lease which is a problem as most lenders will not mortgage anything with a lease less than 80 years. I contacted a surveyor about setting terms for a new lease and he has advised me to keep hold of the freehold and just to extend my lease and sell my flat as a leasehold flat with a 99 year lease on it. This would obv be advantageous to us when each leasee would want to extend their lease.
A cash buyer is interested in our flat and wants to know the cost of ground rent and the insurance terms. The surveyor has gone on hols until 16th so I can't find out from him whether we would be pay the insurance and the leasees pay us in turn (then I can organise a quote) or whether each leasee would pay their own insurance to the terms of the lease. Can anyone help me with this one so I can get back to my potential buyer quickly??
I'm in the same situation as you but i arrange the insurance and then charge the upstairs flat. I dont have a seperate lease from my flat.
Im a bit confused as to what your question actually is? surely you know what your insurance is each year?? and its very, very odd for flats to pay buildigns insurance seperately, you are probably each wasting a lot of money.
as for keeping the freehold, yes there is value in this but you'll also have to collect ground rent, arrange insurance and will be totally responsible for overall upkeep which is easier said than done particularly if you arent living there.
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