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

@ScribblingMilly will do.

We have a second viewing on the flat tomorrow so definitely doing whatever it takes to get this sorted.

He is a funny character, older gentleman very very set in his ways, retired a long time ago and lived here 30+ years. I wish he would agree to it but it was a straight no. He said he has been offered to buy the freehold before quite some years ago and declined then too 🤷🏻‍♀️

Bless him. I guess he doesn't have inheritance in mind, so it's not an issue to him. Doesn't help you though, especially if it's the length of his lease that is inflating the price (I'm assuming).

[quote MinnieMountain]@FluffySunshineBunny the solicitor wasn't negligent. An indemnity policy is accepted by most lenders.[/quote]
As I explained up on the thread, we discovered while reading the lease of the flat we were due to buy that HALF the kitchen was not part of the flat we were trying to buy. This would have been discovered if our solicitor had not requested and reviewed the lease. There was also an absentee freeholder and a bunch of combined issues, led our solicitor advised us to drop out of the purchase. From my perspective, even with a indemnity policy that would not be sufficient for me to have peace of mind to buy the flat the OP is selling.

I said freehold lease by accident. I understand the difference between the responsibilities as the leaseholder and the responsibility of the freeholder. We own a freehold of our flat, which means we are directors of a company that actually owns the freehold.

It may be worth you buying the freehold as a long term investment if he has no intention of extending his lease! In 50 years the flat will revert to the freeholder so could be a very good investment to pass on, if someone else buys it and extends the lease it will be a great premium that will probably more than pay for the freehold investment anyway. A win/win to me.

Even if selling, you can still keep hold of the freehold. We own ours in a ltd company and are currently selling the flat we own. We are going to hold on to it for a little while and then offer it to the leaseholders but as 2 leases are low (in the 60s) if they don't want to buy it we will keep hold of it. We have already made three quarters of the purchase price back from 1 lease extension, so no real loss if we keep it.

@ramblingsonthego I didn't know it reverts to the freeholder when the lease runs out that's really interesting thank you.

The neighbour is in his 60s so likely wouldn't be around when the lease runs out, so i guess it would be up to the Freeholder to extend the lease to sell on again to the next buyer?

[quote readysaltedplease]@ramblingsonthego I didn't know it reverts to the freeholder when the lease runs out that's really interesting thank you.

The neighbour is in his 60s so likely wouldn't be around when the lease runs out, so i guess it would be up to the Freeholder to extend the lease to sell on again to the next buyer?[/quote]
Thats what leasehold means. You are basically leasing the property for the length and terms of the lease. When that lease runs out the property reverts to the freeholder.

For your neighbour it would be who ever inherits the property after he dies. Depending on the price of the property (what is worth with a long lease) and the ground rent and any marriage value (as it is below 80 years) will be the price of a lease extension for that flat. Also they will have to pay the freeholders legal and valuation fees. It could be sent to auction by whoever inherits it, as it won't sell very easily as it is unmortgable with that lease length.

I mentioned online calculators to you before, OP. Just google 'lease extension calculator'. By using one, putting in the rough value of your neighbour's flat (if it had a long lease) and the length of the lease now you can see how much he would have to pay for an extension if it was done formally. Do yours too and add the two amounts together. Then you have a better idea of how reasonable/unreasonable the £19,000 request for the freehold is and how good an investment it would be. Don't forget that figure is negotiable, not set in stone.

We bought the freehold of our 3 flats and we are very glad we did so.
The freeholder had used his mates for the insurance (we went elsewhere and got our premiums reduced by 50%).
He also got the outside painted as cheap as possible and it cost
us much more to do it later.
You are still a leaseholder as there is no such thing as a freehold flat
but you just get so much more say in how it is run.
All in all you need £1000 pa per flat saved a third of which will go
on buildings insurance.
The Leasehold Advisory Service are the main body for these queries
so give them a call or an email

I really don't think I can do any more to get this lease

After be fucked around all morning by the agent selling the lease I finally got contact details for the Freeholder's solicitor.

She forward my email to the Freeholder and he has just replied with a copy of the lease, was almost jumping for joy when i realised it's for the upstairs flat not ours

He confirmed it's the only lease he has and they are 'similar'.

Surely nobody would buy a freehold without seeing a copy of the lease?!

Fuck! But did he extend the lease? Can he send you the paperwork for that? What about your FIL's solicitor? Did you manage to speak to them?

How did he extend the lease, I meant.

Am i being really thick here? I asked if he knew of anyone that would have a copy of the lease and he said the leaseholder might.. i own the flat am I not the leaseholder?..

It’s utterly baffling how the lease was extended without a copy of the documents. But also baffling as to why your FIL bought it without the lease documents being given (especially if it had just been extended).

This is potentially a big issue and might be expensive to fix. Can you afford to buy the freehold? You could own the freehold for both flats if the neighbour doesn’t want to.

You're not being thick, OP, you are piecing together a very strange jigsaw. Dodgy/incompetent stuff has happened and you need a good solicitor to sort it out. I am wondering if a legally-correct lease extension has even occurred and what your FIL's solicitor saw and thought was acceptable when he bought it. Get all the paperwork that you can on your flat from your solicitor and your FIL's solicitor so a good solicitor can help you without being in the dark.
Please take advice from a solicitor on buying the freehold too as it would allow you to draw up a lease for yourself. And it could be a good investment at the right price - you could sell it on once you've sorted out your situation rather than holding it for years.
The Leasehold Advisory Service will help you too and has lots of info on its website that will help you understand freehold/leasehold. As I said, you get an initial phone call for free with a solicitor so is a good resource.

You are the leaseholder by the way.

With this I would purchase the freehold and then issue a new lease to the property you own. Its not going to be a quick fix, it could cost quite a but in legal fees etc.... but it is really the only way to get a lease sorted.

Purchase the freehold, issue a new lease on the same covenants and conditions as your neighbours and then sell your property.

I've got the name of the solicitor that dealt with the lease extension, left them a message to call me urgently will keep trying.
I also spoke to the Freeholder on the phone he's actually quite a nice guy but sounds as clued up as i am 🙄.

We just don't have £19k to buy the freehold but am going to speak to a solicitor about getting this mess sorted for me.

thank you everyone for taking the time to reply to me i really appreciate all the advice given and will use it to hopefully make progress

@readysaltedplease That's great that the freeholder is nice & you're in contact with him now. It's all sortable if everybody cooperates. The lease protects both you and your freeholder as it sets out the rules you have to follow and the rules he has to follow so it's in both your interests that this is sorted, especially with you both selling something related to it. I hope you come back & say how you've got on - good luck!

I've had a solicitor look at the lease for the upstairs flat and apparently it states in the lease that both properties have identical leases just one states upstairs and ours downstairs.

She is going to write to the solicitor who extended the lease 6+ years ago to try and find out what happened to it because someone has made a big mistake by loosing it (although she has assured me with the lease for upstairs and an indemnity policy we wouldn't have a problem selling)

She will be our solicitor when we finally get a buyer so she will know the background already which is good

She also confirmed our lease states leaseholders are responsible for maintaining the building 50/50 each flat so a new Freeholder couldn't charge us service charge which is a relief

@readysaltedplease

She also confirmed our lease states leaseholders are responsible for maintaining the building 50/50 each flat so a new Freeholder couldn't charge us service charge which is a relief

The freeholder can decide what maintenance needs doing and then that is split 50/50 between the 2 flats so you could get bills that way.

The freeholder has a legal responsibility to uphold the fabric of the building so they can decide what maintenance needs doing. Especially as minimal maintenance is being done.

@ramblingsonthego
Would we have a say in what work needs doing? The building is in really good condition externally (and internally ours, never seen upstairs) and anything that has been needed we have had done (thankfully nothing much has been needed)
So if the Freeholder said we need to replace the roof for example but there's clearly nothing wrong with it could we argue that?

It's good news that you've got a fallback position on the lease - very pleased for you.
With repairs, the freeholder has to follow rules to get expensive work done (more than £250 per leaseholder) - notifying you, explaining why, getting quotes etc. But they decide what needs doing and you would need to challenge them if you disagreed.

The freeholder could decide what work needed doing (say for example a new roof). They would issue the leaseholders a section 20 for any work over £250 per flat, for the works which then has to be followed explicitly. You could take it to the lease tribunal that you feel the work is unnecessary and they would make a determination.

For work below £250 per flat they can do the work without any consultation from the leaseholders.

@ramblingsonthego @ScribblingMilly thank you both