Buying freehold of building i own flat in. good idea?

[philv]

I own a flat in a converted 1800s townhouse.
There are 3 flat and 3 owners, including myself.

The owners of the freehold want to get rid of the freehold.
It's too much hassle for them.

The ground rent is 25 p/a which they don't bother collecting.

The lease term is 999 years, so another 970 years to go.

It's hassle for them as one of the owners rents it out through an agency, and both they and their agency are a pain to deal with.
Difficult to get them to pay invoices , respond re insurance, etc.

The value of the 3 flats on't adds up to about 330k in total.

Is it worth me taking over the freehold/buying it for peanuts?
It would be the freehold fo the entire building, so i would be the management company,
I would be responsible for organising work, sendign invoices, etc.
I do a lot of that now, as the freeholder only handles the invoicing really.

Good idea or poison chalice?

Thanks.

[superlightr]

philv said:

I own a flat in a converted 1800s townhouse.
There are 3 flat and 3 owners, including myself.

The owners of the freehold want to get rid of the freehold.
It's too much hassle for them.

The ground rent is 25 p/a which they don't bother collecting.

The lease term is 999 years, so another 970 years to go.

It's hassle for them as one of the owners rents it out through an agency, and both they and their agency are a pain to deal with.
Difficult to get them to pay invoices , respond re insurance, etc.

The value of the 3 flats on't adds up to about 330k in total.

Is it worth me taking over the freehold/buying it for peanuts?
It would be the freehold fo the entire building, so i would be the management company,
I would be responsible for organising work, sendign invoices, etc.
I do a lot of that now, as the freeholder only handles the invoicing really.

Good idea or poison chalice?

Thanks.

As a company when we used to look after the management of blocks of flats we would want to get paid for the time and hassle involved ! I would suggest you will too.
We looked after generally blocks of 30 or 60 or estates of 300 ish.
We wouldn't take on anything less then 30 its just not economical ( as there would be charges we would make for sol enquiries etc) with 3 flats there is limited turnover or chance to make extras.


I would suggest you buying and managing the 970 odd year freehold is worthless and infact will incur you in all sorts of hassle, stress and legal liability. Its a minefield leasehold law.
I would even think when you want to get rid of it you may have to pay out to have someone take it off your hands so it will be a debt to you.



In all honesty I would not have even bought a flat there if the management co is badly run. Can you sell your flat and move on?

Edited by superlightr on Thursday 16th June 14:01

Edited by superlightr on Thursday 16th June 14:02

Edited by superlightr on Thursday 16th June 14:03

[philv]

superlightr said:

As a company when we used to look after the management of blocks of flats we would want to get paid for the time and hassle involved ! I would suggest you will too.
We looked after generally blocks of 30 or 60 or estates of 300 ish.
We wouldn't take on anything less then 30 its just not economical ( as there would be charges we would make for sol enquiries etc) with 3 flats there is limited turnover or chance to make extras.


I would suggest you buying and managing the 970 odd year freehold is worthless and infact will incur you in all sorts of hassle, stress and legal liability. Its a minefield leasehold law.
I would even think when you want to get rid of it you may have to pay out to have someone take it off your hands so it will be a debt to you.



In all honesty I would not have even bought a flat there if the management co is badly run. Can you sell your flat and move on?

Edited by superlightr on Thursday 16th June 14:01

Edited by superlightr on Thursday 16th June 14:02

Edited by superlightr on Thursday 16th June 14:03

Thanks for the reply.
I sort of presumed there would be no benefit.

I am not even sure there is provision in the lease for a management company to charge for their admin fees, etc.

It just says the owners are responsible for repairs etc.
Quiet odd.

Not the right time to move on.
Another 5 or so years and i'll be looking to get shot o it.

Thanks again.

[oldbanger]

I think it can be quite a positive step. I used to own a share of the freehold of my previous home. The freeholders wanted to sell up and we’re, we all felt, charging excessive maintenance fees (including their own arrangement fees on top of direct costs). During my time there was had to replace the roof, replace all windows and also wanted to install gates (we were opposite a primary school and it was carnage at drop off/pic up times). We formed a residents association and all put in an eighth (8 flats in total). This meant that we had control over who we used for maintenance and repair, what we did, and it also gave us control of lease extension. I sold my flat inclusive of my share in the freehold and prospective buyers saw it as a benefit.

[jules_s]

We did the same circa 2001

At the time (not sure if it still applies) the freeholder had a sister buildings insurance co. As the freeholder had free choice of insurance provider they used the sister co - at circa 4x market value - and gave us the bill