Neighbour want us to buy freehold so he can convert his attick - I'm not so sure

[SarfEast1cated]

Hi all, can you help? we live in a freehold Victorian conversion flat and our upstairs neighbours want us to buy the freehold with them so they can convert their attic into three more rooms.
. We don't have a huge amount of spare money so they have said they will pay for the freehold, but want to own the whole thing.
I'm not really keen on it to be honest, as we will bear the brunt of all of their construction work and not get anything in return, and surely when we come to sell it won't be a very attractive prospect for the new owners either.
Upstairs is making me feel really bad about not wanting to do this, so I wanted your opinion - AIBU in saying no?

[DanGleballs]

Who owns the freehold now? Surely you have a leasehold flat at the moment?

[SarfEast1cated]

Our local council own our freehold. They aren't perfect, but I've always found them pretty decent to deal with. They won't allow Him Upstairs to convert his attic though, which is why they want to buy the freehold.

[SarfEast1cated]

Yes - sorry my original post was incorrect.

[Penfold007]

So the current freeholder is willing to sell the freehold, your fellow leaseholder wants to buy it either the whole freehold or a share alongside you? They aren't being unreasonable and are giving you choice. They would still have apply for planning permission and you would be able to object.

[SarfEast1cated]

Thanks Penfold. Yes neighbour is giving us a 'choice' but making me feel bad about not wanting to agree to it. I find dealing with the current freeholder (our local council) pretty good. They are reasonable and I know that they have to go through a certain tendering process to get work done. If our neighbour owned the freehold then my concern is that he could decide that all sorts of work needed doing and we would have to pay for it. He is an OK chap, but I wouldn't want to put myself in this position.

[SarfEast1cated]

and yes the council are willing to sell the freehold.

[Fleurchamp]

I would get some legal advice.

Are there just the two flats in the building? They may need you to be on board to be able to force the council to sell.

The attic is unlikely to form part of their lease as it stands. You may be able to prevent them from carrying out the work if you own a share of the freehold.
Alternatively you could ask them for money for your consent.

[lalalonglegs]

Is the council willing to sell them the whole freehold or a share of the freehold? I suspect it is probably the latter as freeholders don't generally sell the whole entity to a single buyer, in which case, your neighbours would still need the council's agreement to convert the loft.

[Allthebestnamesareused]

I would leave things as they are if I were you. You are correct that if your neighbour owned the entire freehold you would not have a say in works but still be liable for whatever you're liable for under the lease.

As regards the attic conversion if the council as freeholder won't consent it is possible that they may not give planning permission ether (though of course they might as it is a different department).

[SarfEast1cated]

I'll email our solicitor then. They desperately want to extend into their loft to get more room so I understand why they want to do it, but I don't see what we get out of it at all. We are hoping to sell in a few months so don't want to mess up any sale either. The tone of his emails is quite cross now, like he can't see why wouldn't want to agree to it, but I fail to see any benefit in it for us.

[lalalonglegs]

It's also worth looking at your neighbour's lease. Is the attic demised to him? If not, and you were able to buy the freehold, you could then ask for a substantial payment in order to allow him to build into the area since, theoretically, the space belongs to you too even if it is only accessible from his flat. In London, I know people who have had to pay £25-35k to get that permission from fellow freeholders (of course, if you live in an area where values aren't as high, the compensation will be lower too).

[SarfEast1cated]

That's interesting lala. Do I need to go to Land Registry to get that? He would be seriously pi55ed off if we asked for money for our half of the attic!
It's quite stressful being on bad terms with people you can hear sneeze!

[MadameCholetsDirtySecret]

I believe freehold flats are more difficult to get a mortgage on because of the additional risks attached to having responsibility for the fabric of the whole building. I might be wrong, but I think I have heard this in the past.

[paperbattles]

How annoying and upsetting for you.
On a strict legal basis - This seems unfair, and manipulative but it's not unlawful as such. Property rights - ie freehold have a use and a value - the council may wish to sell the freehold to raise money.
You don't state whether the freehold can be transferred only with both flats' permission which is what I think you mean? You need to read your lease and the current freehold documents (if you don't have them I think you can search then download hm land registry and pay £4 for the title documents for the freehold; and your neighbour's lease). Strictly speaking, you bought a flat without control of the freehold and therefore there is a risk that there could be changes you do not want. You cannot control the freehold unless you own it/share.
If you quote the relevant phrases from the lease and freehold we can point you in the right direction (I am not a property specialist but might be able to guide you at least, rather than going straight to your solicitor costing money).
On a practical basis - your upstairs neighbour wants to make changes which you don't want - whatever happens one of you is going to be unhappy. So you have to think of other options or compromise.
Even Joan Collins is fed up with her neighbours' because of their building work. It happens to the best!
One step at a time - look at the relevant parts of lease and freehold to see the legal picture.

[Fleurchamp]

Freehold flats are rare. The OP would still own a lease but would also own a share in the freehold.

lala is right - you possibly could ask that they buy your share of the loft space. It is not automatically theirs.

[SarfEast1cated]

We were due to sell but it fell through a few days ago. It was the removal of the for sale board that caused him to ask again. We will look to go back on the market in June so not long to wait hopefully.

[lalalonglegs]

The OP corrected herself, it is a leasehold flat.

OP, if you are going to speak to your solicitor anyway, ask him/her to get you a copy of your neighbour's lease. Generally, ime, laypeople can only download very limited information from the LR, solicitors have more access.

[mashpot]

If he really wants it you should ask him to pay to buy the freehold from the council but ensure that each of you has share of freehold. This means owners of both flats would need to agree on deceision about maintenance etc and is much more attractive to a future buyer than a leasehold flat so you would benefit. I would never buy a leasehold flat but do own a share of freehold flat.

[JigglyTuff]

I would only agree to this if you own a share of the freehold - having the upstairs flat own the whole freehold is effectively putting you to ransom.

Having said that, I bought the freehold on my flat with my upstairs neighbour and she turned out to be a complete psycho. So I was still held to ransom.

Say no

[kmini]

If you own your share of the freehold, then you might get a premium when you sell your flat. Freeholds are worth more than leasehold.

Also, is there any extensions potential with your flat? Even if you can't afford it, you could apply for planning permission once you own the freehold and therefore sell yours with planning permission to extend.

I would only agree if they pay, you jointly own freehold, they agree to do works post your sale and all common decisions must be unanimous.

[paperbattles]

Worth trying the Land Registry; it should have all the relevant documents - £4 per title and per plan, it's a lot cheaper than a solicitor doing it, and you get an idea of the set up. The plan for the neighbours title should show clearly what is demised - presumably not the attic.
Share of freehold flats have a higher value generally than leasehold flats so if you end up buying the freehold you theoretically haven't wasted money.
However you said you don't have money easily to spare to buy it, but if you don't and your neighbour is allowed to buy the whole freehold title then he may be able to do what he wants (hence read the freehold title).
If he can't buy the freehold title or extend without your permission then he will resent you.
I am trying to think laterally about how to deal with it, outside of legal situation.
Ultimately maybe demand he pays the money for your share of the freehold but you hold it legally for your flat - then you have gained a benefit for when you sell, and ask for some financial compensation for the approval for the attic. It's not what you want but unless you can sell quickly you are going to have to live below him.
Also note that in your property information form you have to declare whether you have any disputes with neighbours - this situation may put buyers off, so you are going to have to do something, whether you like it or not.

[GETTINGLIKEMYMOTHER]

Is there some reason why they can't buy and own the whole freehold?
We have an Edwardian upper maisonette, one of just 2, where there were a lot of problems during the purchase because of a supposedly absentee freeholder. (He wasn't, just hiding because of debts attached to the f/h).

It was a long process, but we bought the f/h of both. The owner of the downstairs one was asked, but didn't want to buy a half share. The solicitors we used didn't seem to think this was at all odd. At the same time we reduced the ground rent - not a lot anyway - to a peppercorn for the other owner.

[Blankscreen]

There is a risk that if you and your neighbour don't buy it that a ground rent company will and they only do it to make money.

Your flat will be more valuable if you part own the freehold. Your repairing and maintenance obligations are set out in the Lease.

Tbh I think you are being a bit precious re his loft conversion

[Spickle]

OP is it a house which has been split into two maisonettes? Have you enquired with the Council how much they will sell the freehold for? Would you and your neighbour then own 50% of the freehold each? Sometimes buying the freehold in this scenario isn't that expensive and you and your neighbour will then get the title deeds to the freehold in both your names which will give you both the possibility to do work/make changes to the structure of the building, subject to discussion and agreement between the both of you. You, for instance may have access to the garden, whereas the upstairs neighbour will have access to the loft. You would be jointly responsible for the upkeep of the structure, i.e. walls, roof, foundations etc.

If buying the freehold merely means a "share" in the freehold management company, then your neighbour may be granted permission to use the loft as storage, but almost certainly will not be allowed to convert it into liveable accommodation because his maisonette will not include the loft as part of its demise and he would be unable to sell it on with a converted loft included as part of the sale.