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LeeH

Freehold & Leashold Nightmare

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Hello,

I have a problem that I desperately need advice about. I currently own a flat in a building that was converted into two flats thirty years ago. My flat owns the freehold for the whole building (first floor flat) with the ground floor falt being leasehold.

There is a lease between myself and the downstairs flat which sets out the responsibilities of myself as landlord with respect to the building and the responsibilities of the leasholder with respect to me.

I've recently accepted an offer on my flat but have run into some problems with the sale.

The first thing is that my solicitor has said that althoug there is a lease for the ground floor flat, I don't have a lease for my flat. I don't understand this as I far as I was concerned I'm the freeholder and the ground floor flat is the leaseholder. There has only ever been this one lease for the last thirty years but my Solicitor sayas this is wrong and this problem ahas essentially been missed when the flat has been bought and sold for the last thirty years!? Does anyone know if this is right?

The second problem is that the mortgage lender of the buyer has siad that they won't procees unless the freehold is shared between the two flats. My Solicitor is expecting me to go along with this and essentially give away the freehold free of charge to the ground floor flat? When I bought I didn't have any problems and don't really wnat to go through this whole process if it isn't necessary.

This all really stressing me out and I need some help! Any advice would be very gratefully received!

thanks

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I'd speak to the Leasehold Advisory service about this:

http://www.lease-advice.org/

From my limited knowledge:

1. Each flat has to have a lease regardless of who owns the freehold i.e. a true freehold flat does not exist. As freeholder, you still require a lease for your flat. I agree this seems pointless as it makes you both lessor and lessee.

2. I would be tempted to share the freehold with the other flat as it may make things easier when it comes to repairs etc (but again PLEASE take advice on this.)

Under normal circumstances, if a leaseholder was not included in the original 'buy-out' of the freehold they can buy-in at a later date, but this normally comes at a cost which is paid back to those who already own a part of the freehold company.

Don't get too worried about losing the sole freehold. It has long been an assumption that freehold is better than leasehold, but this is no NECESSARILY the case with flats. A flat held on a long lease with guaranteed low ground rent and service charges is often preferable to one with a share of the freehold.

Good luck.

Edited by worried1

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I'd speak to the Leasehold Advisory service about this:

http://www.lease-advice.org/

From my limited knowledge:

1. Each flat has to have a lease regardless of who owns the freehold i.e. a true freehold flat does not exist. As freeholder, you still require a lease for your flat. I agree this seems pointless as it makes you both lessor and lessee.

2. I would be tempted to share the freehold with the other flat as it may make things easier when it comes to repairs etc (but again PLEASE take advice on this.)

Under normal circumstances, if a leaseholder was not included in the original 'buy-out' of the freehold they can buy-in at a later date, but this normally comes at a cost which is paid back to those who already own a part of the freehold company.

Don't get too worried about losing the sole freehold. It has long been an assumption that freehold is better than leasehold, but this is no NECESSARILY the case with flats. A flat held on a long lease with guaranteed low ground rent and service charges is often preferable to one with a share of the freehold.

Good luck.

Thanks alot worried1 for your quick and helpful reply. I'll contact the leasehold-advisory service and see what they say. It does seem weird that there was only ever one lease if this is the way these things usually work?

I'm sure you're right that sharing the Freehold isn't a big problem but I don't really want the cost of all this etc if things have been ok for the last 30 years. Obviously I'm seeling so I won't see any of the benefits, only the costs!

In the meantime does any else have any other opinions?

thanks very much

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You can share the freehold and grant a new lease of the upstairs flat or you can:

(i) grant a lease of the upstairs to the new purchaser and simultaneously transfer the freehold of the downstairs flat to the purchaser of the upstairs flat.

Each flat would then be leasehold in its own right and would own the freehold of the other flat. This situation is quite common.

EDIT: However this is what you pay your solicitor to advise you on. It's not good practice to question his considered advice on a public forum unless you are certain of the quality of the advice you will receive here.

Edited by Driver

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