Forum Topic

Buying the freehold

I have been offered the freehold of my property (converted house in 3 flats), there are 89 years left on the lease.  I have negotiated from £29 to £25k & checking a lease valuation site this seems to be correct.  Does anyone have advise having being through the process.  In particular how to purchase the freehold to enable selling each 3 flats separately with a share of the freehold.

Kaye Just ● 743d13 Comments

I would suggest you form a limited company to hold the freehold and when each flat is sold the purchaser would hold an appropriate number of shares in the company.

Richard Greenhough ● 743d

Sounds like a solicitor is needed to steer this transaction through.  If I understand it correctly, and you’ve been offered the freehold of the whole house comprising three flats, then I’m surprised as, under Right of First Refusal, I’d expect it to be offered jointly to all three leaseholders in the first place.

Peter Evans ● 743d

Agree get direction from a solicitor, I have 2 floors in a multiple residential block and each flat owner has a % of the shareholding dependant on size of flat. This means when repairs are done each flat owner pays their % of the cost. Absolutely the way to go so as flat owners you then control the building which should make it easier to sell each unit. Plus keep on top of maintenance, cost and suppliers you decide to use. Good luck.

Jayne Thorburn ● 743d

I am the owner of all 3 (I should have included that info)

Kaye Just ● 743d

Thanks, will do

Kaye Just ● 743d

That makes more sense, but it probably still needs a specialist solicitor to make sure all the transactions are done in a way that achieves your objectives, particularly if you need rental tenants to leave so you can sell the individual flats as leasehold.  You might also need a managing agent to look after collecting service charges and doing building maintenance, unless you plan to do it yourself.  [You probably already know all this, but I'm including it for the possible interest of others!]

Peter Evans ● 742d

If you own all 3 flats as leases, and want to buy the freehold for all 3, just see a decent property lawyer and make it happen. You’d be daft not to try and should be easy enough unless there’s unknown gotchas.

Russell Pearson ● 742d

You mustn't buy or create individual freeholders for all three flats. You would be creating "flying freeholds" which will cause you no end of problems including the fact no lender would be prepared to offer a mortgage them.The freehold is based on the land the building sits on. Purchase the freehold from the existing owner then create individual leases and or a limited company and then a share of freehold structure.

Adrian Irving ● 742d

Thanks for all the advice.  I'm still negotiating however I understand getting a limited conpany is the way to go.  I'm not planning on selling any of the flats until next year however the freeholders want to sell it now.  They are basically saying that they will put it to auction if we can't agree a price.  I'mm hoping to push them down a little more but will contact a property lawyer to get some quotes.

Kaye Just ● 742d

Have you looked into likely changes to enfranchisement and valuation under the new Govt? Might be worth doing before proceeding now.

Mark Talbot ● 742d

yes however nothing will be changing anytime soon & if i don't purchase the freehold now, they will put it on the open market.  The only positive about that is that there maybe little interest due to proposed Govt changes...

Kaye Just ● 742d

Depending on whereabouts in Chiswick the property is, it might be worth more converted back to a house

david ward ● 742d

I think if one person owns three or more flats, their Right of First Refusal might not apply and the freeholder could sell to someone else, though I thought you initially said you’d agreed a price. Legal advice vital!  And having a solicitor on board usually encourages a vendor to take a potential buyer more seriously.

Peter Evans ● 742d