Freehold advice.

[Binney on acid]

I own 2 of the 4 flats and the freehold in a purpose built 1980's block. I don't exploit the situation on ethical grounds and because I'd be exploiting myself financially. Ongoing charges are kept to an absolute minimum. The other two owners of leasehold flats are interested in purchasing part or all of the freehold. I think they want to negotiate new leases as their leases have about 71 years to run. I'm sure that legally I don't have to sell. Presumably the freehold increases in value as the time winds down on their existing leases. Anyone know where I stand here? The last thing I want to do at the present time is to incur solicitors fees, especially as this generates only £400 per annum in revenue and is more trouble than it's worth.

 

[severnside gull]

As you own 2 of the 4 units my advice would be to retain the freehold and renegotiate the leases

 

[desprateseagull]

have a look on the friendly forum that is Money Saving Expert.com

 

[skipper734]

They are after an extension to their leases on the cheap. This is worth money to you and they pay the solicitors fees, you win.
A business partner of mine who had hundreds of leases on two flat properties and purpose built blocks, was told many years ago by a solicitor friend of both of us, " You may as well get rid of these, they will never be worth anything,"

 

[Chicken Runner61]

I'm pretty sure (but do check and let me know) that if they want to renew their leases they can and you have to allow them to do it.

You will get some money for renewing them but don't expect big bucks but again check with a few solicitors as I have been given conflicting information about how much someone has to pay.

I was told that if a lease is under 60 years is gets more expensive to renew so if they are at 71 years they would still be ok.

Not sure about the freehold thing as again I have heard different things like if they are a few leaseholders they can but if its only one.

I'm interested as I have some property and the lease is down to under 65 years and it doesn't look like they are going to renew ever!

 

[Chicken Runner61]

They are after an extension to their leases on the cheap. This is worth money to you and they pay the solicitors fees, you win.
A business partner of mine who had hundreds of leases on two flat properties and purpose built blocks, was told many years ago by a solicitor friend of both of us, " You may as well get rid of these, they will never be worth anything,"

I think it depends if you are still alive when the leases are worth something.

It only cost a mate of mine £8.5k to renew a lease with another 100 years to 156 when it reached 56 years a short while back. If you bear in mind that some freeholds have obligations (like repairs or administration) under them it might not be worth it!

Mind you a block of say 10 flats all renewing at £8.5k might be a nice windfall if you don't have to contribute to anything.

I did also hear they were going to allow more leases to extend to 999 years so they could be passed down to family members and extend to family morgages which would not always be benificial to the freeholder.

 

[nwgull]

I thought that if 50% of the leaseholders wanted to buy the freehold then the freeholder was legally obliged to sell? This is however a bit confusing given the the current freeholder already owns the other 50% of the leashold properties??

 

[skipper734]

I thought that if 50% of the leaseholders wanted to buy the freehold then the freeholder was legally obliged to sell? This is however a bit confusing given the the current freeholder already owns the other 50% of the leashold properties??

Other owners get first refusal. They still have to buy it.

 

[Chicken Runner61]

If this is correct and it looks like it might be....

Some leaseholders can easily obtain the freehold. It looks like Binney is safe though

Housing Buying The Freehold - Reading Borough Council

Edit: actually he may not be having read it again!

 

[skipper734]

The point being; is that they still have to buy it off the leaseholder. A group of flat owners can never agree on anything anyway.

 

[clapham_gull]

I would have thought it advisable to get a solitor to sort this out.

I was in a similiar situation recently where the property we bought was converted to share of freehold from freehold.

It's quite a complicated old business and best dealt with by someone who knows what they are doing.

I think you usually have to set up a management company too.

 

[Binney on acid]

Thanks a lot for the constructive advice everyone. I'm really grateful.

 

[WATFORD zero]

I would think that Timmy van hoog born & bred is the man to ask. He's always telling everyone on here about his property portfolio

 

[Gazwag]

There are lease extension calculator online, I beleive if a lease is less than 80 years to go the leasehold has to pay the freeholder a marriage value. This could be in the '000's and is subject to CGT

 

[Chicken Runner61]

There are lease extension calculator online, I beleive if a lease is less than 80 years to go the leasehold has to pay the freeholder a marriage value. This could be in the '000's and is subject to CGT

There aint no way I am getting married again.

The last one cost me £120k