Share of freehold confusions

[ShannonG]

Hello, I wonder if anyone can offer me any advice because my head is in a spin and I’m all a bit confused.

I live in Europe but own a leasehold apartment in London.

The building is divided into four separate apartments, all of different sizes. Mine, No 4, is the smallest. The current Freeholder ‘B’ lives in Flat 1.

At the moment ‘M’ the owner of Flat 3 will buy Flats’ 1,2 and 3 shares of the Freehold and I’ll purchase my share, Flat 4. The sum now agreed payable to B (the freeholder and owner of Flat 1) is £25000 plus her and our costs incurred from the valuers and solicitor’s fees.

I’m happy if the total costs are apportioned with regards to the values of the freehold of the different flats as I feel this is fair. I feel that this is particularly fair as both flats 2 and 4 have now shown an interest in purchasing their share of freehold. Flat 4’s new owner has approached ‘M’ (the owner of Flat 3) to see if this is possible.

M’s advice is to get the sale done as above and then Flats 2 and 4 can approach him to buy their share should they wish to.

I’m wondering if this is in my best interests.

And…

I’m also wondering at what stage should the allocation of parking and the roof spaces demised to individual flats take place? Should this be before or after the share of freehold is agreed? I assume new leases will have to be drawn up presumably by our solicitor so perhaps it is then. At present Flats 1 and 3 have a parking space allocated to them at the front of the house in their lease but the other flats don’t. There is room for 4 or 5 cars. At the moment Flat 1, (the present Freeholder) has been parking a car and a large decrepit work van that takes up more than one space, while Flats 3 and 2 each park one vehicle. I really would like a parking space.

Any advice would be really appreciated!!

No advice other than to join National Leasehold Campaign (NLC) group on Facebook. Loads of advice on there and if you don't want to post you can read others posts instead

Get a solicitor and negotiate. The freehold isn’t just the building I assume. So it should be divided up fairly. Get legal advice though.

You're buying the freehold - if it is anything like ours, you're effectively buying shares in the freehold company. M will have 3 shares to your 1. Personally, I'd rather ensure all flats have a freehold interest than one owner have majority control of the freehold. It is possible that she / he could overrule decisions because they have a controlling interest in the freehold.

Buying the freehold and varying the leases (to incorporate a parking space) are different things. The freeholder would have to give consent to amend the leases. You'll then need a deed of variation and updated title plans. Those plans need to be submitted to the Land Registry.

It is easier to try and remember that the Freehold and Leaseholds are different things. You are a leaseholder. You are bound by the terms of your lease. You will still need whatever consents are detailed in your lease from the freeholder. The difference is, you now earn a share of the freehold company. You get a say in varying the lease but the other freeholders also get a say and won't necessarily agree with you.

There is value in share of freehold but it is still complicated I'm afraid. If you are varying the leases, check the lease length and extend it. We insisted on that when we purchased our flat.

Forgot to say, there is no need to automatically update a lease just because you own a share of the freehold. Don't assume anything. You need to specifically make these requests and instruct your solicitor to negotiate a deed of variation with the freeholder.

Thanks you so, so much. You have been really helpful and it has helped me to sort of crystalise what I'm thinking. It's always good to have another head thinking about things :-)

Following.