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Original poster

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

63 replies

SarfEast1cated · 18/02/2017 15:37

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?

OP posts:

Original poster

SarfEast1cated · 19/02/2017 09:16

blankscreen why precious? Surely living underneath a flat where an attic conversion is taking place will be intrusive and noisy? I don't really want my garden wrecked by scaffolding either.
Unless you know better of course? (Genuinely interested in your view although I realise that this may sound snarky.)

OP posts:

needmoregin · 19/02/2017 09:54

How is OP being precious? Who would want to live under building noise and not gain from it ? Believe me i have been in that situation and it was a nightmare.

unfortunateevents · 19/02/2017 13:35

OP, if you are planning on putting your flat back on the market again in June surely this is hassle you don't need? At the speed these things move, you will be partway through the process while in the midst of selling. This doesn't make you particularly attractive to buyers - well obviously, buyers would probably like a freehold, rather than leasehold, property but you are going to be only half-way there while also trying to sell.

mashpot · 19/02/2017 21:49

So lucky we have the downstairs neighbours that we do having been in a similar situation a couple of years ago and having to amend our freehold to be able to convert our loft! How selfish to say why let them do it just because you won't benefit, no other neighbours would have the power to stop neighbours doing building work, really horrible attitude.

madeleinecreek · 19/02/2017 21:59

Could you come to an agreement where you both buy half the freehold, and then they pay you for the right to convert the attic, but that amount will be half the freehold? You would then not be or of pocket, own half the freehold but have the conversion upheaval?

Indaba · 19/02/2017 22:45

Forgetting all the legalities etc etc....I think your phrase that the other side is getting nasty by email tells you everything you want to know. If you know are going to be selling why put yourself through all this when you will walk away in a few months. Dealing with neighbours with all the freehold/leasehold stuff can be an agro. I'm really not sure if your current freeholder works well for you why you would put yourself through it if you are leaving in a few months. I hope I don't sound uncharitable as I really really don't mean to be but I have had my brother go through all sorts of bad blood.

Bufferingkisses · 19/02/2017 22:55

Freehold flats are a pita to get a mortgage on. Having just sold one and had it fall through several times because of this I'd advise caution. Get proper advice but, given that you are selling, I'd suggest you tell them that you do not want to change things when you are selling but he is welcome to discuss it with the new owners when they arrive. In fact get your solicitor to send a letter saying that and that you wish to have no further dialogue on the subject.

Spacecadet14 · 20/02/2017 09:17

I would find out how much the freehold is worth before you decide against buying your share. The way it works, having just been through this ourselves, if the council agrees to sell the freehold they legally have to offer both leaseholders - i.e., you and upstairs neighbour - first refusal on buying it. If you say no, your UN can indeed buy the entire freehold without having to give you anything. From what you've said, I suspect your UN doesn't know that and will be very happy when they realise they can cut you out of the loop. Them buying the entire freehold means they can do whatever work they want, subject to planning permission. And if there are other flats in the area that have been allowed loft conversions, it's very unlikely your objection will stop it happening. Also, if they do buy entire freehold, they will be your landlord. So you'll have to pay ground rent to them and, if you need your lease extended, it'll be them you'll have to negotiate with. In the long run it might be better to buy your share. This is a good website for info on leases and freehold: www.lease-advice.org

Spacecadet14 · 20/02/2017 09:20

Sorry, missed the bit where you said you might be moving in the summer. You could make it a condition of the sale - that whoever buys the flat buys the share of the freehold at the time of completion. That way you include it in the price and you don't pay a penny. I don't know what it's like where you live, but here freehold flats are worth more than leasehold.

JoJoSM2 · 20/02/2017 09:56

You will certainly benefit from owing the freehold - your flat will be more valuable and more desirable. In addition, when the other owners convert the loft, they will probably replace the roof so you won't be charged for any repairs on it.

If you're unsure about possible scaffolding in the garden, I would just confirm how long it would be for (probably not that long).

Bringmewineandcake · 20/02/2017 10:03

I wouldn't do it in your position. You want to move, you don't want a potentially very noisy and messy conversion going on as it might put people off and would also be very stressful for you while you live there.
Unless it is very much worth your while I would say no.

peukpokicuzo · 20/02/2017 10:12

This sounds like a massive minefield.
You want to move anyway - so propose this to the neighbour:

You jointly buy the freehold with him (borrow what you need to do so, you will get this money back when you sell).

Ask him to please wait until your sale has gone through before starting his improvement works so that he can deal with your successor because you will have difficulty selling while there is work pending or in progress. In acknowledgement of the inconvenience caused by this delay, offer him a sum of money which is some proportion of the increased value that you get from the sale by following this plan.

The purchase of the freehold needs to be managed carefully with each of you having your own solicitor looking out for your best interests. Specifically the owner of the downstairs flat has equal ownership and claim on the currently unoccupied attic.

Then sell your flat as leasehold plus 50% ownership of the freehold for the building. This would usually give you a profit as the additional value is likely to be more than what you paid for half the freehold. Some portion of that profit goes to the neighbour.

Dizzywizz · 20/02/2017 10:25

Pps mentioned difficulty getting a mortgage with a freehold flat - is this true? We didn't have a problem when we bought and sold our f/h flat.

MadamePomfrey · 20/02/2017 10:26

My first flat was share of freehold never again!! It was an absolute pain sorting everything out joint buildings insurance etc and then there's all the jobs one wants the roof doing the other disagrees it was a nightmare!! Then when it came to selling it was worse I needed to get documents signed by the other party with proof of ID etc it took ages and that was with us both getting on! I would seek independent legal advice before you even consider it but also check with the estate agents locally see if it actually would add value but it is a massive hassle in my opinion don't be rushed into it, I imagine his so keen to have share as the council may refuse to sell the freehold to just him.

JoJoSM2 · 20/02/2017 12:20

Madame Pomfrey, Sounds like your experience wasn't great. This is not to say it's always like that. Also, if people don't want to manage the building themselves, they can appoint a management company. As a freeholder you get to choose a good one or change it when you aren't happy. However, you have the benefit of not having to pay for lease extension and you're able to decide what happens in your own building.

Dizzywizz · 20/02/2017 16:54

I would never buy a l/h flat - the freeholders could charge x amount to extend the lease, when we did ours it was solicitor fees only and we did it for 999 years!

Plus I can't imagine not being able to make any decisions regarding my building

Eminybob · 20/02/2017 17:06

I know pps have said this but just want to reiterate, you may struggle to sell as freehold flats are difficult to get mortgages one.
I work for a large mortgage lender and have seen applications declined purely due to the fact the property is a freehold flat.

Original poster

SarfEast1cated · 20/02/2017 17:27

Firstly thankyou to everyone who has taken the time to reply to my post, I really appreciate all of your opinions.

Secondly there were some factual errors in my OP our flat is leasehold not freehold.

Thirdly I realise I used the Olde English spelling of attic!

Fourthly, I will speak to our EA about whether having a share of the freehold will raise the value of our place, but I think we will just ask the neighbour to wait until we put our place back on the market in June. The new buyers will probably be really keen to purchase the freehold with them and they can sort it out between them.

Thanks again everyone.

OP posts:

vickibee · 20/02/2017 17:33

Even if they purchase the freehold they may find restrictive covenants which will not allow this and they will have to pay a fortune to have these modified. I work for a company with peppercorn ground rents, money made of covenant modifications. £30000 recently for an granny annex and we are in north

Alwayscheerful · 21/02/2017 10:28

Tell your neighbour the timing is not good for you as you are selling your property, Scaffolding and building work will be off putting to buyers. Ask him if he is interested in purchasing your flat.
A share of the freehold would definitely add value and prevent future increases in ground rent. If you were intending to stay I would want to own a 50%share of the freehold in my name and be compensated for the inconvenience. It would not be unreasonable to expect a share of the profit on the loft/ attic conversion.
In London freeholders often add a complete floor of apartments at roof level and use the profit to fund work such as re-roofing, win win situation all round.

Spacecadet14 · 26/02/2017 19:03

Have you spoken to your EA yet, OP? I just saw your comment about the new owners probably wanting to buy F/H and wanted to point out that it's usually the case that you have to be a leaseholder for two years before you're eligible to buy it, so they'd have wait. But you could make it part of your purchase, so you buy it, but they pay for it.

Original poster

SarfEast1cated · 01/03/2017 18:11

Thanks space I remember hearing that with our particular borough it's only 6 months. Our EA doesn't think it will add to our sale price either as our lease is pretty long.
Ho hum.

OP posts:

beachbodyunready · 01/03/2017 22:48

Having a freehold flat isn't always a good thing, my grandmother lived a block of freehold flats which was fine as all the residents had bought cash, however as they moved into residential care or died the flats became difficult to sell as apparently only a handful lenders will allow a mortgage on a free hold flat. In the end the residents had to 'sell' there freehold and create long leases which whilst time consuming solved the problem.

Pinbasket · 02/03/2017 04:47

Most potential buyers would be much happier to own a share of the freehold as it gives much more control over decisions, and especially as it means that it's easier to renew the length of the lease.

Pinbasket · 02/03/2017 04:53

ps. You must live in a leasehold flat (not freehold as you say in your original post) as the council currently hold the freehold. You should have a copy of the lease though, and it 's probably worth looking to see how many years left on the lease etc. The value of the property declines once it gets to about 80 years or so left and can be very expensive to renew if you don't own a share of the freehold yourself. You don't seem to understand much about how leases work etc and I would suggest you research it online- there's loads of stuff there!

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