Owning your own home

To give an idea, I'm a joint freeholder (house with two flats).

I recently did a loft conversion, it required the agreement of the other flat but that was a ten minute conversation with him saying, sure go for it.

I've also replaced a load of windows which just required a quick heads up and extended my lease to 999 years which cost about £400 in legal fees.

All of those would require permission and possibly substantial fees if I didn't have the freehold.

Wow thanks for all the info! The bit I don't get is that the freehold isn't currently up for sale. Its owned by "XXX securities ltd" so why would they sell it to just him or another company? (i.e your first option).

They wouldn’t have to, if it was just him, but everyone has their currency, as my girlfriend says, so if he went in with a high offer they might consider it. If you were both on board you could legally force a sale through collective enfranchisement. The name of your freeholder suggests to me that they would not be particularly interested in negotiating a market sale.

It's possible that freeholding a two up two down isn't a money spinner for xxx and a bit of a ball ache. They might be simply waiting for you both to CE and then get out whilst taking a ground rent and doing as little work as possible.

It might be worth viewing shed guy as potentially the most hostile party here - if I were you, I would go in with him and use him for his knowledge - he will know who to employ to get the job done on both the CE and maintenance going forward - whilst at the same time watching what he is doing like a hawk. It will be a bit of effort on your part but I think you might have to and realistically it will be good value work.

And he might have the means to buy the freehold from under you.

I checked and his flat is owned by his property company (long story but he bought it at auction, gutted it and remodelled to rent out, then ended up living there as he got divorced). I have a feeling he wants to buy the freehold so he can extend into the loft (the loft is not currently included in his lease)?

Dumb question but will the leaseholds stay the same if we buy the freehold or is there the possibility they could be changed during the process?

He has got a quote from a surveyor he knows to do the valuations and also manage appointing a solicitor. Do i go with this or find my own solicitor?

The leases could be changed but it would need to be with the agreement of the freeholder. You'd obviously have more power to block this if you were involved.

In theory the ownership of the freehold is just being moved from one party to another and it shouldn't impact the leases at all but it may be viewed as an opportunity to do some housekeeping on the lease agreements too.

Dumb question but will the leaseholds stay the same if we buy the freehold or is there the possibility they could be changed during the process?

Anything is possible by agreement, but normally in a CE process the leases remain the same.

He has got a quote from a surveyor he knows to do the valuations and also manage appointing a solicitor. Do i go with this or find my own solicitor?

I'd suggest getting your own solicitor, rather than relying on his mate of a mate to look out for your interests.

I'm still not sure about this. I can't see why the guy upstairs wants to do it, he said its a good time as the valuation will be low atm due to covid and he also doesn't want to "remember to pay the ground rent/extend the lease" (his lease is 125 years). Does he want to do it so its easier to extend his flat or something? Or is it just to add value for sale?

If there's 2 leaseholders he needs your consent to make this a slam dunk.

Low value is a dumb argument, the value of it is determined by the ground rent annually which isn't varying due to whatever the market is doing short term.

He'll still have to pay building insurance annually, you'll still need to perform the role of the freeholder... you'll still have leases even, just for 999 years, if written anew.

And that's why to do it if it's all quiet and cheap... to redefine the terms of the lease, usually extending it... but also "updating it".

I would check that... what is vague in the lease? What does he want to clarify in his favour? Might he want to make major adjustments and this is him laying the groundwork so that there are fewer parties to object and fewer fees down the road?

It is worth doing, share of freehold does improve value and saleability... but it doesn't liberate either of you from a freeholder, it just makes you joint responsible for performing the role of the freeholder.

Low value is a dumb argument, the value of it is determined by the ground rent annually which isn't varying due to whatever the market is doing short term.

It's not that dumb. When valuing a freehold subject to 1993 Act rights, the court/tribunal will treat the value of the freehold reversion as being the sum of two elements, not just the right to receive ground rent:

1. The right to receive ground rent; and
   
2. The right to have possession of the property at the end of the term of the leases.
   
   

Because the first element is capitalising a future income stream, the former will be discounted by a capilisation rate on a YP basis, and the second will be based on the current value of the flats in the building discounted on a PV basis by the deferment rate which will be assessed in light of the decision in Sportelli. See for example paragraph 25 of this recent decision on valuation.

So the value of the flats will have an effect on the value to be paid for the freehold. It can also have an effect on any marriage value payable if the leases have less than 80 years to run. so the current value of the flats will alter the price payable on CE or on a lease extension.

Wow thanks for all the info! The bit I don't get is that the freehold isn't currently up for sale. Its owned by "XXX securities ltd" so why would they sell it to just him or another company? (i.e your first option).

When you live in a leasehold property you have the right to buy the freehold (aka enfranchise), even if the current owners are not selling. As long as you can pay, you can buy. What you pay is determined by your solicitors and theirs.

When you own a freehold you can sell it at any time subject to some conditions.

Yes but I meant that is only if 2 or more leaseholders (in this case both of us as there are 2 flats) agree?

Leasehold is a fabulously complex area of law and I am no expert - I'm barely even a layman - so you'd be far better off reading the official guides than asking me.

https://www.lease-advice.org/advice-guide/houses-qualification-valuation/

But even better than that woudl be to take @danstuff's advice and get some proper representation. I can recommend Mari Knowles and Amanda Gourlay first hand as excellent leasehold solicitors and barristers respectively - they've helped us out a lot.

This is interesting.. i live in a small block of 3 flats all privately owned, leaseholder is southwark council, its on the edge of a bigger estate where there is much a mixture of social and private owned housing, and much bigger flat blocks.

would we be eligible to buy the freehold of our block? two of the 3 are very easily extendable but the council have refused permission (the guy at the other side has tried apparently)

This is the advice guide for flats. https://www.lease-advice.org/advice-guide/ce-getting-started/

I'd have thought you would be eligible - as far as I know everyone is eligible - but I've rightly had my knuckles rapped by @danstuff for speaking at too high a level about what is an extremely complex area of law, so I'll probably leave anything more detailed to your own investigations.

I'd once again recommend Mari and Amanda though - both fantastic - or making an appointment with LEASE https://clients.lease-advice.org/Appointment/Appointment?isFireSafety=False to discuss your options. It's free.

I had a fair few alerts set up for new properties in my search area coming on the market. Been receiving a lot of notifications for properties in the past few days with prices looking just the same as pre-lockdown (or possibly fractionally higher).

I don't know about long-term but in the short-term it looks like everyone is hoping it will be business as usual.

would we be eligible to buy the freehold of our block? two of the 3 are very easily extendable but the council have refused permission (the guy at the other side has tried apparently)

Two out of the three of you, or all three, could do, yes, subject to the usual caveats and qualifications inherent in dealing with an Act as complex and inconsistent as LRHUDA93. An extension would presumably require permission from Southwark in its capacity as both freeholder and planning body at the moment. Buy the freehold and you'd still have planning issues to deal with.

interesting again, my hope was that this might get us out of section 20 notices that get issued at the estate level which never benefit our 3 flats in any way

If you're obliged under the terms of your leases to contribute towards estate-wide service charges then collective enfranchisement would relieve you of any further obligation to contribute. The terms of the conveyance on collective enfranchisement are set out in Schedule 7 to the 1993 Act, and don't include any terms relating to contributions to the maintenance of upkeep of other land or property.

I had a case recently under the 1967 Act (acquisition of the freeholdof a leasehold house -similar but different) where the landlord (the Church Commissioners of E&W) tried to insist on a load of estate-wide service charge provisions being included. We challenged it, and on that point we won.

Have you got this Viessmann boiler or are you still in the planning phase? Also looking at it.

It's going to be a while, earliest I will pull the trigger will be end of year

Ok, I need to go in the next 6 weeks. I'll be guinea pig. 🇬🇳🐖

https://www.rightmove.co.uk/property-for-sale/property-68524635.html

I find this place interesting. Is the place next door with the bonkers carbuncle on the front a similar property but extended with a huge side return, or was it a completely different design?

I've wondered the same thing.

My guess is that the huge carbuncle would have originally been the same / similar to the place next door.

Also, looks like a good price for a large house on Capel Road. Nice place to live.

My sister in law lives in one of the smaller houses a bit further along.

Massive rear extension too