Buying freehold?(10 Posts)
I have seen an interesting looking flat. It's in a large Victorian house that's been split into two. But it's leasehold and I don't want leasehold. Mainly because the flat is in bad condition and I would want to fix it up etc etc. (Is: it's a great fixer upper.)
What's the deal with buying the freehold? Who is likely to own it in this case?
Anyone could own it - could be the other flat owner even or just a random person who inherited it / development company. You would have the right to purchase the freehold @market price provided both flat owners wanted to and had owned their leaseholds for at least 2years so you can't enforce this alone or immediately. You need to make enquiries with the estate agents to ask the current owner the set up. The length of the current lease will massively impact the cost of the freehold purchase.
You can find out the current owner by searching on Land Registry website - will cost £3. If the other flat owner owns the freehold you will never be able to buy it unless they wanted to sell and have less rights if you're not happy with how they manage it.
If it's an absent freeholder that could also cause problems of not being able to get repairs done.
The fact of it being leasehold should not make any difference on doing it up, providing you are happy with the current extent of the flat. If you wanted to extend or make structural changes you would typically need the freeholders permission and they can charge for this. But if it's just a case of interior stuff then leasehold is not a problem. Obviously you'd need to check the least carefully, and you can also ask the EA if there are any unusual restrictive covenants in the lease - they should have this info from the seller at the outset.
Bear in mind that if you bought the whole freehold you would then be wholly responsible for external and common repairs, and complying with all relevant legislation wrt collecting service charge contributions. This is a complicated legal minefield and if you do it wrong can cost you thousands and land you in lengthy court battles.
In some respects a well managed freehold owned by someone else is much simpler and lower risk.
Before you make any offers need to ask how long the lease is, who is the freeholder, how much the ground rent is and how much the annual service charges are (pay for repairs to fabric of the building and buildings insurance. Estate agent should tell you this.
Legally you can't enforce buying extending the lease until you have been leaseholder for 2 years. (I don't know about freehold). You may be able to persuade the seller to start the process for you (section 42?).
If the lease is less than 80 years, it gets expensive. If less than about 64 years you will have difficulty getting a mortgage.
If the freeholder owns the other flat, they may not want you to extend lease or buy freehold (they may be waiting to get the other flat cheap) and may make things difficult.
If you wanted to extend into the loft for example, it may not be part of the demise of the upper flat, and in that case you would have to pay the freeholder.
Having dealt with the sale of a flat as executor, and owned a leasehold flat many years ago, I would personally rather buy a small freehold house than a large leasehold flat.
I agree with lenina, I would always choose a freehold house over a flat if any sort if possible. Even if you jointly own the freehold with the other flat owner(s) there can still be hideous and potentially legally extremely costly problems if anyone doesn't want to play ball. Look at the leasehold advisory service website - it had lots of info on lease/free hold law. Also the long leaseholders board on Landlordzone is a great source of info.
I'm with Lenina too, I had a grim experience trying to sell a leasehold flat, with the management company blackmailing me and repeatedly halting the sale. I wouldn't touch one with a very long bargepole now.
Gosh great advice, thank you! Yes I'd want to extend.
The lower ground is partially done - it's a lower ground and first floor flat. The flat is big, has huge garden, but an absolute mess inside. I've by no means fallen in love with it, just think it has great potential and is very cheap (for a reason!), so a bit put off by the trickiness of freehold / leasehold!
Yes I had a nightmare selling my leasehold flat. I also would not have bought it with hindsight.
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