Is it possible? Owning entire building with lease

[Swallow34]

Extracted from the property introduction:
"the flat comes with full freehold (not shared with the flat upstairs) and 109 years left on the lease"

Is that means the current owner sold the upper floor to others but still owns the entire house and land for another 109 years?

I understand how share of freehold works, but this is not...🤔 Would like to hear some advices before calling the EA , thank you 🙏

We had this on a flat that we at one point were interested in buying - it was a terraced house that had been converted into two flats and we as the potential ground floor purchasers would have owned the whole freehold. In the end we didnt go ahead with the purchase due to other reasons but we werent put off by the freehold issue. In my experience estate agents arent very knowledgeable about this so I spoke to a friend who had done similar. A lawyer will be able to give you the specific legalities of it.

If you go ahead with the purcahse you would effectively own two properties: a leasehold flat and the freehold to the building.

The leasehold flat is what the mortgage company will be interested in as this is the property in which you are buying and in which you will live. As this has 109 years left on the lease you will have no problems getting a mortgage; and effectively you can grant yourself a new lease at any time with only legal costs due.

You as the freeholder will be responsible for the maintenance and upkeep of the external structure of the building and shared internal bits. For this you can charge the other flat owner a maintenance fee. You will also be responsible for getting building insurance for the whole building and then charging half to the other flat. If the other flat wants to extend their lease they will need to come to you to grant the extension for which you can charge a small amount. You may want to check the lease as there may be obligations on the freeholder -- it may specify that the external and shared areas will be painted at a regular interval, say every five years etc.

Its perfectly fine as long as you are in contact with the other flat owner - you will need to be able to ask them for their contributions. I can see problems if they are renting out the flat etc and may not be there on the ground.

If it were me once the sale has been completed I would look into possibly talking to the other flat owner about them buying half the freehold and then owning it on a shared freehold basis. It should be fairly easy to do and will give them more security as well as giving them a stake in the house and making their flat more valuable. You will need legal advice about all this of course but it shouldnt be too expensive.

@Camberst Thank you very much for the explanation, super clear and helpful !! 🙏🙏🙏 I'll arrange a viewing then see how things go.

May worth checking with your mortgage advisor whether that flat will be mortgageable. The technical term for it is a "freehold flat" which I heard may be more difficult to get a mortgage for.

Also you will be the freeholder and have freeholder's responsibility, so need to make sure you are happy with those as well.

We've just pulled out from something similar because our mortgage lender wouldn't lend on it.

@Okigen need to learn more about "freehold flat" 👀thank you 🙏

@dottypencilcase I hope you have found your dream house, thank you for sharing your experience🙏🙏