Freehold flat?

18
Found 16th Jun 2012
I am looking to buy a 2 bed flat that was a house but has been split in 2 flats.
The estate agents had it down as a freehold, so I was really happy about agreeing the terms with them.
Just recently, my solicitors have sent me the paperwork and it stated leasehold is 103 years. I called my solicitor to clarify it and they said the freehold is on the external of the property + the roof, so the internal flats are on a lease.
My solicitor tells me its a normal circumstance for flats but I can't just take her word for it. I don't want to be stuck with a leasehold if its actually false advertising.
Now, I can't get a straight answer or any paperwork to explain the freehold/leasehold situation from the solicitor.
Can any one help? Has anyone bought a freehold flat? Does anyone have a link on a website with info?
Thanks.
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18 Comments
ALL flats will have a freehold. It may be owned by one person or split between the lessees.

The question you need to ask is whether your will be the full owner of the freehold or a part owner
freehold are only held for the land that the property stands on so there will only be one for the block. this is either held by one person/company, called the freeholder.

the freeholder then creates leases for the flats in the block and he can charge for maintainance and major works as well as ground rent. the other option is for the owners of all the flats in the block to buy this freehold and all jointly share this freehold amongst them.

it sounds like your flat is leasehold and someone owns the freehold as freeholds do not have a life span of any sort. you should ask your solicitor who owns the freehold and if he says everyone in the block jointly owns it, you should ask that he show you papers to show this as there would be documentation to show this share.
Original Poster
I do feel like having a go at the estate agents as its taken MONTHS to get the paperwork, but ultimately, its not worth it.
The freehold is to be split between myself and the other flat owner. So, this is a normal situation involving freehold flats? Should I get a second opinion?
mutley1

freehold are only held for the land that the property stands on so there … freehold are only held for the land that the property stands on so there will only be one for the block. this is either held by one person/company, called the freeholder.the freeholder then creates leases for the flats in the block and he can charge for maintainance and major works as well as ground rent. the other option is for the owners of all the flats in the block to buy this freehold and all jointly share this freehold amongst them.it sounds like your flat is leasehold and someone owns the freehold as freeholds do not have a life span of any sort. you should ask your solicitor who owns the freehold and if he says everyone in the block jointly owns it, you should ask that he show you papers to show this as there would be documentation to show this share.


Freeholders are responsible for holding building insurance. If you are the sole freeholder you are responsible for that but the share of the costs would be split with the lessees.
Freeholders would normally be primarily responsible for roof/foundation work and external maintenance/repair.

If you are the sole freeholder you may find it gives you additional rights to refuse any potential building works you disagree with.

The terms of the lease allow the leaseholders enjoyment of their own property for the period of the lease, subject to the terms of the lease.
If the freehold is split between two of you and the other part owner is not resident ie they sublet there could be problems in the future.
Technically any major works would need to have the agreement of the freeholder but if one is not resident you should still seek their permission.
Being the sole freeholder does give some slight advantage but also extra responsibility.


If you are not looking to make any major changes and the flat is not likely to require any major repair in the short term there will be little noticeable difference between being a leaseholder or a freeholder.

Original Poster
I'm not looking to stay for even a decade in the flat (or do any major changes to the flat), just looking to get on the property ladder. Just don't want to be caught out.
Thanks for the replys, by the way.
Montana80

I'm not looking to stay for even a decade in the flat (or do any major … I'm not looking to stay for even a decade in the flat (or do any major changes to the flat), just looking to get on the property ladder. Just don't want to be caught out.Thanks for the replys, by the way.


It will allow you to do that. Other ways of getting in more cheaply might be to buy a property with shared ownership.
You buy 25%+ of the freehold and pay rent on the remaining amount. As (hopefully) your funds increase you have the oportunity to increase your share of the freehold.
If the property is large enough you could let out part of the property to a tennant/tennants to help cover the costs.
Getting onto the property ladder is not usually easy.
Montana80

I'm not looking to stay for even a decade in the flat (or do any major … I'm not looking to stay for even a decade in the flat (or do any major changes to the flat), just looking to get on the property ladder. Just don't want to be caught out.Thanks for the replys, by the way.



most flats are leasehold, it is very rare that a flat holds a share of the freehold. this is why i prefer houses to flats. flats with share of the freehold are more valuable.

being on leasehold will also mean that there will be ground rent and service charge to pay so you should find out what these charges are as the service charge can be significant and if any major works is planned for the block as you will have to pay for that.

the freeholder determines what major works need doing, not the leaseholders.
mutley1

most flats are leasehold, it is very rare that a flat holds a share of … most flats are leasehold, it is very rare that a flat holds a share of the freehold. this is why i prefer houses to flats. flats with share of the freehold are more valuable.being on leasehold will also mean that there will be ground rent and service charge to pay so you should find out what these charges are as the service charge can be significant and if any major works is planned for the block as you will have to pay for that.the freeholder determines what major works need doing, not the leaseholders.


Mutley, its a house conversion so not a large block.

But the premise still applies
Original Poster
As far as I know from my solicitor, there isn't a ground rent (As effectively, I'd be paying myself), but there is insurance that works out at £2,000 a year split between myself + the other freeholder (Who by the way, is unkown as the other flat is still on the market).
My solicitor has said that I would pay my half for now and the current seller (of both flats) will have to pay the other £1,000.
The other freeholder is the current owner until he sells it on. You will need to establish what mechanisms are in place for the payment of the insurance in case one person stops paying it
Edited by: "WoolyM" 16th Jun 2012
Montana80

As far as I know from my solicitor, there isn't a ground rent (As … As far as I know from my solicitor, there isn't a ground rent (As effectively, I'd be paying myself), but there is insurance that works out at £2,000 a year split between myself + the other freeholder (Who by the way, is unkown as the other flat is still on the market).My solicitor has said that I would pay my half for now and the current seller (of both flats) will have to pay the other £1,000.



it sounds odd as it sounds like you have a share of the freehold but then there is the lease so i think the current freeholder intends to keep hold of the freehold and sell you the flat to you on leasehold. i do not know if he can introduce ground rent afterwards but if it does not state this in the lease then i do not think he can introduce it at a later stage.

gound rents don't tend to be big anyway so you should be ok. you should push to get a share of the freehold as part of your bargaining.
Hi. In traditional house conversions the original freehold of the house gets turned into a "crossover lease". This means that technically each flat owner owns the freehold for the opposite flat and subsequently become leasehold themselves. The purpose of this is to prevent sole responsibility for repairs etc. these forms of leasehold have no ground rent and are purely geared for protection for owners. The only cost is buildings insurance which is commonly held jointly between the two flat holders. Each flat owner would then get their own contents cover. It's incredibly common in flats that's have come from converted houses and is nothing to worry about.

My source is that I own one of these and have sold many in my career.

Hope this helps.
Whoever is the freeholder should be detailed in the lease agreement
Original Poster
So how easy is it to renew the leasehold in the future (seeing as I'll own the freehold)?
Montana80

So how easy is it to renew the leasehold in the future (seeing as I'll … So how easy is it to renew the leasehold in the future (seeing as I'll own the freehold)?



Well that's more interesting. When the flat was created a 999 year rolling lease should have been created. Not sure what that didn't happen. You would need to contact your solicitors but in simple terms since there is no management company you and the other flat owner would essentially apply to form a new lease under the old terms. I'm not sure of the specifics but your solicitor will advise you of how this is done. I would think about how long you plan to own it as a short lease doesn't really become an issue until its down to below 70 years.
Montana80

So how easy is it to renew the leasehold in the future (seeing as I'll … So how easy is it to renew the leasehold in the future (seeing as I'll own the freehold)?


Easy. A solicitor who deals with these sort of things will be able to do it. But the leases on both flats will normally run concurrently. So increasing the length of the lease on one flat will also increase the length of the lease on the other flat.

Things to bear in mind with leases is that a lender (B.S./Bank) will not lend on a property where the lease is less than 70 years. And flats getting near to 70 years on their lease may be considered a less attractive buy for that reason. But its something that can be fixed easily.
gbspurs says a 999 year lease should have been created. I think it is usually a 99 year lease. Bearing in mind that most properties will only be a few hundred years old at best.

It will only be an issue if major works are planned. Wanting to add an extension or a loft extension could be considered major works. These would need approval of the freeholder.
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