Buying Freehold

[readysaltedplease]

Received a letter today from our freeholder offering us, and our upstairs neighbour to purchase the freehold.

Our flat is currently on the market so our initial reaction is we wouldn't get the money spent on purchasing the freehold back as part of the sale so a bit pointless.

However does anyone know, if we both declined to purchase the freehold and they sold it to someone else, could the new owner alter the lease at all?

Ours is a bit unusual that although the property is leasehold we don't have any service charges or ground rent, we just pay a yearly amount for insurance to the freeholder which is one of our key selling points so it could potentially affect a sale if charges were imposed.

Thank you in advance

You always get first dibs when the freeholder wants to sell. Share of freehold is more valueable and desirable than leasehold.

If you decide not to, the new freeholder could do things such appointing a management company and introducing service charge.

How do you pay for any property maintenance? Some mortgage companies are weary about lending on flats that have no service charges as it could mean minimal maintenance is getting done, or you will end up with a stonking big bill when it all catches up with you.

They cannot change the terms of the lease, but it will depend if the lease has terms regarding maintenance and who's responsibility it is , as they could introduce service charges that way.

@ramblingsonthego we own the front and rear gardens (not communal) so maintenance for that is down to us there is a shared courtyard that belongs to the freeholder but that's not needed any maintenance since we have lived here. The roof needed a couple of roof tiles once which we split the bill with the upstairs neighbour.

The lease can't be changed by a new freeholder without your consent or them applying to a tribunal. So look at your lease and see what it says about maintenance etc. Don't imagine that things would go on as before; look and see what would be allowed according to your lease. Is there anything a new freeholder could do that would mess up things for you, eg selling permission to build above the building. Is there anything that would put off a potential buyer of your flat? And are you sure it wouldn't be a good selling point? Personally I'd always prefer a freehold flat by far.

[quote readysaltedplease]@ramblingsonthego we own the front and rear gardens (not communal) so maintenance for that is down to us there is a shared courtyard that belongs to the freeholder but that's not needed any maintenance since we have lived here. The roof needed a couple of roof tiles once which we split the bill with the upstairs neighbour. [/quote]
But who would pay if the roof caved in or there was some structural movement? Who pays if the guttering needs replacing or you had a blocked drain? What does your lease say on maintenance and who is responsible for it?

We own the freehold to the building which we currently live in. There is a lot more to being a freeholder than just maintenance though. Insurance, fire assessments, asbestos assessments, electrical assessments etc.....

Personally I would be speaking to your neighbour and seeing if you go halves on the cost of the freehold and each own a share in it. You can then extend the term of both your leases, be more in control of the maintenance.

As it stands a lot of people and mortgage companies may be weary of buying a flat which has had very minimal maintenance done on it, and no reserve fund to pay for any major works that may be needed in the future.

You also need to separate being a leaseholder and a freeholder. They are completely separate entities.

So you don't have a sinking fund available in case the roof needs a big repair or there's another maintenance issue? That might put some buyers off.

As a vendor of a leasehold flat I also had to pay a fee to insure against any large claim for repairs between the date I sold and year-end for the freehold accounts.

We were in a similar situation and bought the freehold with the others as it gave us more control to change things like shared front door, fixing the roof, maintenance of parts of the building which were shared. Etc. It's worth it to have the peace of mind to know we have a say and a vote with all that happens in our building

@ScribblingMilly annoyingly we don't have a copy of the lease apparently it couldn't be located when we purchased so need to try and get a copy from somewhere. It could be a good selling point and the agent has added it to the listing today but I guess it depends what the lease says about changes

@ramblingsonthego our neighbour isn't interested in buying the freehold, he has lived here over 30 years and will be leaving here in a box!
I'm pretty sure the insurance fee we pay covers the structural side of things, but i think guttering etc would be down to us. I need to request a copy of the lease as it couldn't be located when we purchased.
Do you as the freeholders have to pay for those inspections to be done? How often are they required?

@PragmaticWench was that fee to protect the buyer incase anything happened after you sold?

@FluffySunshineBunny there is only 2 flats in the building, it looks like a house from the outside so own front doors etc but it is purpose built flats.
How do you decide as the freeholders what needs doing? Does one flat say "we should repair this" and everyone else has to agree?

@readysaltedplease yes, it was to protect the buyer. I wasn't too pleased but apparently it's common.

How the hell did your solicitor let you purchase a property without seeing a lease? Sorry but that is totally inept of any legal professional to do this. I think you may have a strong case if a nasty surprise comes out of the woodwork.

What if the freeholder comes to you now and says he wants to replace the roof? Without your lease you do not know who is responsible for that ie. You, neighbour or a joint thing.

No insurance that I know of will pay for roofs etc.... that are at the end of their natural life. All the inspections we have done are the legal part of being a freeholder. You have a legal duty of care to maintain the fabric of the building and this is passed on to the leaseholders via the service charge.

Before you put the flat on the market you need to get these sorted. Did you get a mortgage on the property without a lease? Have you bought this years and years ago? No mortgage company or solicitor (a normal decent one not the cowboy you used!) Would allow a sale to go through without seeing the lease. Its absurd!

If the freeholder sells on the freehold and they have a copy of the leases you and your neighbour could be in for some nasty surprises.

@ramblingsonthego we purchased it in May 2019 with a mortgage so I'm guessing someone saw the lease, well i hope they did or like you say we could be in for a nasty surprise.
Do you know who to contact to get a copy?

Wow, this situation is a mess. Rambling is right - you need to get it sorted before you can sell. You were very badly advised to buy your flat without a lease and you need to track it down asap. Find a good - different! - solicitor to get going on this. I'm also astonished a mortgage company gave you a mortgage without one. Are you absolutely sure that's the case? I'm a freeholder too and could imagine a ruthless one rubbing their hands over your situation.

Your solicitor should just be able to get a copy from the land registry if they don't hold one. Your mortgage company might hold a copy too.

Get on to the land registry website and order a copy of all your documents. I would order lease, title plan and also purchase the freehold documents as well.

It should show something like

123 High Street (freehold)
123A High Street (first flat leaseholder)
123B High Street (second flat leaseholder)

It costs something like £3 a document but let me assure you, it is going to save you a whole heap of pain and money.

This is a complete mess for you if the lease has got lost and if you find a buyer before you have this sorted they will undoubtedly pull out of any sale once legals have commenced. No solicitor (other than yours!) will let them buy a leasehold flat without seeing the lease. Who's to say it doesn't say you have to pay 10k a year in service charges in that lease? Whats to say it doesn't say you can have no TV or music playing at anytime of the day or night? It was ridiculous for your purchase to go ahead, I am utterly dumbfounded.

In your situation I would purchase the freehold just to protect yourself for the time being! You have no idea what is written.

[quote readysaltedplease]@FluffySunshineBunny there is only 2 flats in the building, it looks like a house from the outside so own front doors etc but it is purpose built flats.
How do you decide as the freeholders what needs doing? Does one flat say "we should repair this" and everyone else has to agree?[/quote]
Yes pretty much, we have quarterly meetings. There's been an issue with subsidence in the building next door, it requires a lot of meetings and calls with our insurance etc. This could only be done because we own the freehold. We also had to push the council to fix trees on the street which was damaging the house.

Ours is a also a converted house, 4 flats. We have communal front garden which is managed jointly, we have guttering issues which are paid jointly etc. There's been things to fix, from the small (broken tiles in the front path) to the very large a whole roof last year.

Wow just saw that you don't have a copy of the lease! The lease shows responsibility of things and shows who owns what in the building.

For a flat we didn't buy: when we saw the lease we (us and our solicitors) noticed that half the kitchen was NOT included in the flat. So there's plenty in the lease you can find out and discover. You can buy the freehold yourself if your neighbour doesn't want to participate.

[quote readysaltedplease]@ramblingsonthego we purchased it in May 2019 with a mortgage so I'm guessing someone saw the lease, well i hope they did or like you say we could be in for a nasty surprise.
Do you know who to contact to get a copy?[/quote]
Go back to your solicitor!! They should have a copy, and if not, they were negligent during the conveyancing process.

Thank you will ring solicitor today and get this sorted asap

Your solicitor must have found some solution in order to request your mortgage money.

The freeholder might have a copy. That's who I've asked on the purchase with a missing lease that I title checked yesterday.

And those saying ask the Land Registry for a copy, they don't always have one. Which appears to be the case here.

@MinnieMountain thank you i will contact the freeholder solicitor and mortgage company, someone must have seen it at some point.
Yes land registry don't have a copy for some reason