Flat freeholder wants to sell freehold
Discussion
I live in an apartment block with 8 properties in it, and have just had a letter to state that the current freeholder wants to sell the freehold, and has to give the current leasees first refusal.
I'm kinda interested in the prospect, but have no idea what it really means, apart from having control of our own destiny in some respect. However our lease does have 123 years left to run, so that isn't an issue.
Anybody been through this before and can tell me the upsides and downsides?
I'm kinda interested in the prospect, but have no idea what it really means, apart from having control of our own destiny in some respect. However our lease does have 123 years left to run, so that isn't an issue.
Anybody been through this before and can tell me the upsides and downsides?
We bought the freehold as a leaseholders co-operative (or something) at a previous place. There were 8 flats, with 8 leaseholders, each with an eighth share in the freeholding company/association (I forget the exact legal status, but to be fair this was about a decade ago now).
It was all done through a local solicitor fairly painlessly and didn't cost that much either, as I recall. It helped that the freeholder's agent had been rubbish at administering stuff, and we paid a premium for it in terms of commission on top of fees of work etc, so some of the residents were already actively maintaining the premises. In essence we were halfway there already in terms of organising ourselves. We continued to pay the same maintenance charges etc, except to the resident's association bank account instead, got to decide on our own schedule of improvement works and repairs, and were able to shop around for quotes.
My advice would be to do it, but YMMV
It was all done through a local solicitor fairly painlessly and didn't cost that much either, as I recall. It helped that the freeholder's agent had been rubbish at administering stuff, and we paid a premium for it in terms of commission on top of fees of work etc, so some of the residents were already actively maintaining the premises. In essence we were halfway there already in terms of organising ourselves. We continued to pay the same maintenance charges etc, except to the resident's association bank account instead, got to decide on our own schedule of improvement works and repairs, and were able to shop around for quotes.
My advice would be to do it, but YMMV
oldbanger said:
We bought the freehold as a leaseholders co-operative (or something) at a previous place. There were 8 flats, with 8 leaseholders, each with an eighth share in the freeholding company/association (I forget the exact legal status, but to be fair this was about a decade ago now).
It was all done through a local solicitor fairly painlessly and didn't cost that much either, as I recall. It helped that the freeholder's agent had been rubbish at administering stuff, and we paid a premium for it in terms of commission on top of fees of work etc, so some of the residents were already actively maintaining the premises. In essence we were halfway there already in terms of organising ourselves. We continued to pay the same maintenance charges etc, except to the resident's association bank account instead, got to decide on our own schedule of improvement works and repairs, and were able to shop around for quotes.
My advice would be to do it, but YMMV
All good points, however a couple of things I probably should have mentioned in the first post I guess! It was all done through a local solicitor fairly painlessly and didn't cost that much either, as I recall. It helped that the freeholder's agent had been rubbish at administering stuff, and we paid a premium for it in terms of commission on top of fees of work etc, so some of the residents were already actively maintaining the premises. In essence we were halfway there already in terms of organising ourselves. We continued to pay the same maintenance charges etc, except to the resident's association bank account instead, got to decide on our own schedule of improvement works and repairs, and were able to shop around for quotes.
My advice would be to do it, but YMMV
The freehold is up for £24k so it will cost me £3k minimum to buy into it, the flat is a newbuild (built just under 2 years ago) so maintenance costs are low and i'm not expecting any surprises in the time I am likely to be here, most likely no more than 5 more years I would guess.
Would owning part of the freehold mean the flat is worth more in the future? Would owning part the freehold be a good investment regardless of whether I sell it on with the flat when I sell, is that even allowed?
I think I need to talk to a solicitor really, but want to know what I need to know before I talk to him, I'm pretty clueless about all this to be honest
Buy the freehold. No question about it.
I once owned a leasehold flat in London where we didn't have a share of the freehold (or even the head lease). The freeholder didn't really care what happened as long as they got the money for the ground rent from everyone and the head lease was sold to a managing agent - who naturally always appointed themselves to maintain the property.
We were then saddled with considerable maintainance bills where there was very little chance of getting out of them or negociating with them to alternative solutions. It's not a situation I would want to be in again if I could avoid it.
I gather the laws have since changed regarding leaseholds, so it's worth taking advice about it.
I once owned a leasehold flat in London where we didn't have a share of the freehold (or even the head lease). The freeholder didn't really care what happened as long as they got the money for the ground rent from everyone and the head lease was sold to a managing agent - who naturally always appointed themselves to maintain the property.
We were then saddled with considerable maintainance bills where there was very little chance of getting out of them or negociating with them to alternative solutions. It's not a situation I would want to be in again if I could avoid it.
I gather the laws have since changed regarding leaseholds, so it's worth taking advice about it.
The following HMG consultation document is worth reading
http://www.communities.gov.uk/documents/housing/pd...
http://www.communities.gov.uk/documents/housing/pd...
We bought ours a few years ago and if the option came up on my 2nd flat (which it is supposed to in the next few years) I'd buy it again.
You need to set up a management company and appoint 2 directors, you can either choose to manage the block yourself or use a managing agent.
Only real issue I've found is that one of the people who acts as one of the directors is a nightmare, completely selfish lying b
h. so far she told me:
- that her lease is different from everyone else's and allows her to exclusively use the visitor parking, but refuses to let anyone see it.
- that visitors shouldn't be using the visitor parking as spoils her view of the road, although her own car doesn't.
- that people shouldn't be allowed to smoke in their home or the grounds of the flats.
- she's told other people that I dumped a new RS4 outside her bedroom window, which turns out to be a car she's storing for her son, (but if it's mine I don't mind.)
- She's asked the guy next door to sell his van and buy a car as she doesn't like the van.
I have the joy of acting as the chairman for the management company so tomorrows AGM should be fun!
The AGM will involve hours of us going round in circles, we have slight noise transfer issue which is something I've dealt with in various listed buildings over the year but rather than listen to someone who knows what they're talking about and spending money to sort out problems people would rather make uneducated assumptions over what might help.
All in all I'd say it is worth doing though.
You need to set up a management company and appoint 2 directors, you can either choose to manage the block yourself or use a managing agent.
Only real issue I've found is that one of the people who acts as one of the directors is a nightmare, completely selfish lying b
h. so far she told me: - that her lease is different from everyone else's and allows her to exclusively use the visitor parking, but refuses to let anyone see it.
- that visitors shouldn't be using the visitor parking as spoils her view of the road, although her own car doesn't.
- that people shouldn't be allowed to smoke in their home or the grounds of the flats.
- she's told other people that I dumped a new RS4 outside her bedroom window, which turns out to be a car she's storing for her son, (but if it's mine I don't mind.)
- She's asked the guy next door to sell his van and buy a car as she doesn't like the van.
I have the joy of acting as the chairman for the management company so tomorrows AGM should be fun!
The AGM will involve hours of us going round in circles, we have slight noise transfer issue which is something I've dealt with in various listed buildings over the year but rather than listen to someone who knows what they're talking about and spending money to sort out problems people would rather make uneducated assumptions over what might help.
All in all I'd say it is worth doing though.
I'd be loath to buy a flat without a share of the lease, it's very common now. Like andy says above dealing with a residents committee type BS can be a buttache but it better than some of the alternatives, which include absentee's who ignore important maintenance and there are also cases of concerns who buy up freeholds to rip off the homeowners with exorbitant charges.
hairyben said:
there are also cases of concerns who buy up freeholds to rip off the homeowners with exorbitant charges.
This is what worried me, friends have been in this situation, things like hundreds of pounds a month being paid to a cleaning firm that never turns up to clean communal areas and turns out to be owned by a relative of the management company owner and I think locally a bill of several hundred pounds was presented to each flat owner for painting the railings on terraces which didn't need doing. anonymous said:
[redacted]
Sure, that is all a possibilty, but buying our freehold wont change some of that. The block is basically 6 blocks joined together around a central courtyard, we have the option of buying the freehold for our block, i.e. 1 of the 6 blocks. Who will own the communal areas etc... I have no idea. But I'm almost certain it won't be our freehold, so can't stop whoever does own it from doing what they want, except through the legal channels and rights I have anyway, which won't change.Making up work will be difficult, as mentioned it is a newbuild and still under NHBC guarantee etc... Plus we will always have the right to force a freehold sale in the future if it does get bought by a t
t.For me it comes down to simple economics, in the next 5 years I expect to be here, will the freehold cost of somewhere between £3k-£24k (plus fees) be clawed back in terms of possible overcharging shenanigans and increase in property value. In an older flat with a shorter lease that is completely independent of it's surroundings, I can see it is a no brainer, for a virtually brand new flat, with a long lease, that is surrounded by other plots of land that I wouldn't have the freehold for, does it make as much sense? I really don't know!
andye30m3 said:
hairyben said:
there are also cases of concerns who buy up freeholds to rip off the homeowners with exorbitant charges.
This is what worried me, friends have been in this situation, things like hundreds of pounds a month being paid to a cleaning firm that never turns up to clean communal areas and turns out to be owned by a relative of the management company owner and I think locally a bill of several hundred pounds was presented to each flat owner for painting the railings on terraces which didn't need doing. http://www.lease-advice.org/contact/
trooperiziz said:
Well yes, but that is 400 properties. This is a block of flats with 8 people in it. Worst case I need to knock on 3 doors and start proceedings to force a freehold sale...
And for £3k each you can avoid this, small but worrying possiblity. Personally i'd always want a share of freehold.Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff