I need to make a decision whether to purchase the Freehold to my flat, along with 2 other lessees. I am seeking legal advice, however, I am interested to know if there are any pitfalls that are likely to crop up that I will not be aware of. Has any one been through the process and if so, any advice to offer? Thanks.
What is the yield? You are responsible for the building and need to insure - are you happy with it - subsidence etc.
sharp intake of breath
why are you buying the freehold ?
I would take high quality and expensive legal advice.
I wouldn't.
What % of freehold will you own, what is your liability for freehold costs (insurances, roof, decoration etc etc), can the majority 'freeholder' shaft you - we need work done pronto, I have an independent, recommended builder Mr Mybrotherinlaw, it's going to be 40K, (*well I'll actually pay a lot less though).
What is the mechanism by which all freeholders agree on decoration, mgmt, rules etc etc etc.
Do you have any liability for ANYTHING that is not in your total control - building roof, drains, wiring, other tenants, costs, wet stair wells ......
Yes I have owned a flat, yes I did have a bad experience.
It will be an equal share of the freehold, there is only 3 of us. We are currently responsible for any repairs/maintenance anyway as long as we have the current freeholders permission, which isn't a problem.
My gut keeps telling me not to buy and I don't know why. The leases have 71 years left on them so they will need renewing shortly.
Any more words of wisdom from STW?
flat I had was owned by a limited company that the leaseholders were all equal shareholders of.
it felt like I had more control over what happened.
if the current freeholder is looking to sell no reason new owner wouldn't decide to take on maintenance etc themselves and charge you an arm and a leg for it?
what's the downside of owning it bar initial expense?
The Freeholder is selling for a nominal £1 charge!! It worries me, why so cheap? Ground rent is £25 per year, no service charge. From the homework I have done so far, it will cost up to £6k between the 3 of us. I can't seem to get to grip with the idea of spending £2k on something which I'm unlikely to see a return on in my lifetime., when I can quite happily carry on paying £25 per year for living here. Also the leases are different which gives one flat more power over the other two imo - still waiting for legal advice whether my opinion is correct or not. If it's correct then the costs could escalate whilst we thrash out suitable clauses in the leases to suit all. The other lessees don't know of the differences and it could potentially cause a lot of problems which equals lots more legal costs.
www.tjmlaw.co.uk
He specialises in this kind of thing and should be able to help you through the whole process.
I organised the enfranchisement of the block in which I owned a flat in London (4 flats).
This site was invaluable.
http://www.lease-advice.org/
However since I am also a Chartered Surveyor I have a few professional skills which were of use too. Proper advice is to be recommended if you dont have personal experience/skills to utilise.
we got it for a good price - the freehold has appreciated in value - and it put us in control of our block management costs (i.e. service charge, sinking fund budget, common area cleaning etc) and as we are now the freeholders we are in a much better position to sort out anti social behaviour by the commercial tenant on the long leasehold on the ground floor. Our s/c has come down by 10-20% pa and we have the day-to-day management dealt with by an excellent outfit called http://www.hmsl.net/
although they are based in Southampton and our block is in London, Sean there has been probably the most reliable, dependable and best value for money in any property professional Ive ever had to work with.
It was certainly a very good move for us.