Share of freehold red flags

[onthem0ve]

We are considering buying a share of freehold flat and wanted to understand what the best ways are to formulate an agreement with neighbours (we are already aware of the basics, ie having a leasehold at the same time etc). Are there any red flags we should be aware of, and would it just be better to buy outright freehold if we can?

If there isn’t already any sort of agreement between the neighbours regarding the freehold and how the building is managed then I’d avoid this flat. You can’t “formulate an agreement” without the cooperation of the neighbours, who are unlikely to engage with you when you don’t even own the property, and creating a management company or agreement is a lengthy legal process.

If you have the option of buying a freehold house then many people would say that’s preferable to owning a flat - but presumably you’re considering flats because you’re restricted by budget? In which case, millions of people own flats perfectly happily and problem free in either share of freehold or leasehold tenure. As long as there’s already an establishment process for building management it’s fine.

We live in a share of freehold flat. There are 14 flats and 13 have a share of freehold.
We have a managing agent who does a limited amount. We have 4 directors of the block who have meetings. We have block meetings where we vote on things e.g. shall we have the car park resurfaced?

It works pretty well. Although things take a long time to get done.

If you get on with the other freeholder/s then great, but if not then it's bad news. We are absent freeholders of a flat we had to sell leasehold only (at a loss) due to a neighbour dispute. They wouldn't sign to transfer the freehold over to a new buyer without us agreeing to some ridiculous demands (e.g. them owning the shared area/access to the flat ). They are now giving hell to the new owner. We just got unlucky I guess...

The actual freehold itself was fairly meaningless as it was pretty old. There was a ground rent of a peppercorn and some things about maintaining the shared area.

I wouldn't buy a share of freehold again

Previously, .i had this in a building of 6 flats. We all got on well but even then, there were issues. Mostly they were determined to keep costs as low as possible - to the point of neglecting things.

Also, the results of neglect led to water leaking into my flat from the roof - at which point I was told I had to get three different quotes for the repair, while water was still coming into my flat. I wasn't working at home and trying to find three roofers who would do a quote wasn't easy.

It's partly why I left. They were clearly going to neglect and avoid basic stuff.

We did all get on really well but when it came to a problem that didn't affect their home, they were useless.

Also, in terms of running the building, only two of us took responsibility.

I do have higher bills now but the leasehold flat I live in is run by a management company who act on things according to their responsibility, and if need be, work is done without having to clear it with the neighbours.

Same as EmmaH2022. I would advise against it. Four flats with one share each of management company. Nobody ever wanted to do the necessary paperwork. Wanted to keep service charge as low as possible but when something went wrong there wasn't enough money in the pot to rectify it. Also one flat got rented out and they were completely inconsiderate with parking and kept blocking the drains which due to the set up only really affected my place. I would only ever buy a freehold house ever again.

Its important to make sure the LPE1 property information form is completed by the seller, and this will disclose if there have been an disputes with other freeholders, if so, probably avoid the property as it can be a nightmare to sell it if you fall out with another freeholder. There's more info here on share of freehold set-ups