Creating Leases from a Freehold Property
Discussion
Peeps, was wondering if there were any solicitors on here that could help me out.
I have a freehold property converted into two 1 bed flats, It's been arranged like this in years and I have recently been given a certificate of lawful development so it is recognised officially as two flats including the banding for the council tax.
How can I now turn the freehold into two leasehold properties?
Any help would be great.
Thx...T
I have a freehold property converted into two 1 bed flats, It's been arranged like this in years and I have recently been given a certificate of lawful development so it is recognised officially as two flats including the banding for the council tax.
How can I now turn the freehold into two leasehold properties?
Any help would be great.
Thx...T
First question is why you would want to.
You would only need to create a lease if you were planning to sell them rather than rent them out. You could easily do shorthold assured tenancies direct from the freehold.
If you want to sell them then you need a solicitor to act for you. Leases are just too complex to do on a DIY basis. If the building is self contained with just the two flats the lease should be pretty straightforward. You will have to cover things like insurance, maintenance of main structure, decoration, use of shared areas (such as any garden) and ground rent but your solicitor should go through those issues with you.
You also need to consider the tax implications.
You could set up the leases and then sell them as a done deal or prepare drafts for sale and then negotiate on the terms but if you put the leases in place now that will be disposal and may trigger CGT liability.
Have a chat with an accountant and a lawyer to get an idea of the issues and then decide how you want to play it.
You would only need to create a lease if you were planning to sell them rather than rent them out. You could easily do shorthold assured tenancies direct from the freehold.
If you want to sell them then you need a solicitor to act for you. Leases are just too complex to do on a DIY basis. If the building is self contained with just the two flats the lease should be pretty straightforward. You will have to cover things like insurance, maintenance of main structure, decoration, use of shared areas (such as any garden) and ground rent but your solicitor should go through those issues with you.
You also need to consider the tax implications.
You could set up the leases and then sell them as a done deal or prepare drafts for sale and then negotiate on the terms but if you put the leases in place now that will be disposal and may trigger CGT liability.
Have a chat with an accountant and a lawyer to get an idea of the issues and then decide how you want to play it.
billsnemesis said:
First question is why you would want to.
You would only need to create a lease if you were planning to sell them rather than rent them out. You could easily do shorthold assured tenancies direct from the freehold.
If you want to sell them then you need a solicitor to act for you. Leases are just too complex to do on a DIY basis. If the building is self contained with just the two flats the lease should be pretty straightforward. You will have to cover things like insurance, maintenance of main structure, decoration, use of shared areas (such as any garden) and ground rent but your solicitor should go through those issues with you.
You also need to consider the tax implications.
You could set up the leases and then sell them as a done deal or prepare drafts for sale and then negotiate on the terms but if you put the leases in place now that will be disposal and may trigger CGT liability.
Have a chat with an accountant and a lawyer to get an idea of the issues and then decide how you want to play it.
Thanks for the info....The reason for setting them up for leaseholds is 1. To potentially sell in the near future and 2. To raise more money out of the properties, as two flats it's worth a lot more than 1 house. You would only need to create a lease if you were planning to sell them rather than rent them out. You could easily do shorthold assured tenancies direct from the freehold.
If you want to sell them then you need a solicitor to act for you. Leases are just too complex to do on a DIY basis. If the building is self contained with just the two flats the lease should be pretty straightforward. You will have to cover things like insurance, maintenance of main structure, decoration, use of shared areas (such as any garden) and ground rent but your solicitor should go through those issues with you.
You also need to consider the tax implications.
You could set up the leases and then sell them as a done deal or prepare drafts for sale and then negotiate on the terms but if you put the leases in place now that will be disposal and may trigger CGT liability.
Have a chat with an accountant and a lawyer to get an idea of the issues and then decide how you want to play it.
Yes I understand it's not a process I could do myself, just wondering if there were any PH solicitors that could help me. Keep the money in the family and all that
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