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Buying Freehold
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- Lemon Pip
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Buying Freehold
Hi,
I have tried but cant get half of leaseholders interested so we are unable to buy our Freehold through collective enfranchisement so I thought I'd buy it just on my own.
I have a value in mind but would really like to double check figures with more intelligent people.
12 residential flats on 99 years originally granted 1979. Ground rent is £30pa rising to £60 in 2039 until expiry in 2078.
But 5 leases have been extended, the other 7 have less than 60 years remaining.
Average value of these unextended flats is £110k, rising to £130k with extended lease.
Anyone able to estimate the value of purchasing this Freehold ?
Thank you
I have tried but cant get half of leaseholders interested so we are unable to buy our Freehold through collective enfranchisement so I thought I'd buy it just on my own.
I have a value in mind but would really like to double check figures with more intelligent people.
12 residential flats on 99 years originally granted 1979. Ground rent is £30pa rising to £60 in 2039 until expiry in 2078.
But 5 leases have been extended, the other 7 have less than 60 years remaining.
Average value of these unextended flats is £110k, rising to £130k with extended lease.
Anyone able to estimate the value of purchasing this Freehold ?
Thank you
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- Lemon Slice
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Re: Buying Freehold
Might I ask why you think the freeholder will sell to you ?
My daughter lived in a block of 14 flats and the freeholder decided to sell and had to offer it to the leaseholders, all bar my daughter and one other showed no interest in buying. I offered to buy it and the freeholder laughed !!!!!! he was selling it from his company to himself prior to liquidation of the company, he knew the price was very favourable and thats why he retained it and of ci=ourse he was not obliged to sell it to anyone other than all the tenants.
Given the possibility of reform to freehold laws regarding flats there is an element of risk.
The freeholder does have to do things and it can be complex ( and profitable)
My daughter lived in a block of 14 flats and the freeholder decided to sell and had to offer it to the leaseholders, all bar my daughter and one other showed no interest in buying. I offered to buy it and the freeholder laughed !!!!!! he was selling it from his company to himself prior to liquidation of the company, he knew the price was very favourable and thats why he retained it and of ci=ourse he was not obliged to sell it to anyone other than all the tenants.
Given the possibility of reform to freehold laws regarding flats there is an element of risk.
The freeholder does have to do things and it can be complex ( and profitable)
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- Lemon Quarter
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Re: Buying Freehold
Late ps. The https://www.lease-advice.org/ (government funded agency) is probably the mother-source for laymen to get their head around their rights to extend leases, enfranchise them and so on. It also gives examples of the whole process, the valuation metrics and so on. They also have FAQs, help-lines and so on... in your or similar shoes I'd start there!
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- Lemon Slice
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Re: Buying Freehold
I suppose this has been covered before but thank heavens Scotland got rid of feudal leasehold in 2000. It was tidied up in 2004 and in 2010 all remaining long leases were converted to freehold.
It can be done. England should do the same.
TP2.
It can be done. England should do the same.
TP2.
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- Lemon Half
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Re: Buying Freehold
TahiPanasDua wrote:I suppose this has been covered before but thank heavens Scotland got rid of feudal leasehold in 2000. It was tidied up in 2004 and in 2010 all remaining long leases were converted to freehold.
It can be done. England should do the same.
TP2.
I'm intrigued! How can a flat be made freehold, given the freehold (in E&W) is the land, as opposed to any building that happens to be on it?
Thanks.
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- Lemon Slice
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Re: Buying Freehold
Mike4 wrote:TahiPanasDua wrote:I suppose this has been covered before but thank heavens Scotland got rid of feudal leasehold in 2000. It was tidied up in 2004 and in 2010 all remaining long leases were converted to freehold.
It can be done. England should do the same.
TP2.
I'm intrigued! How can a flat be made freehold, given the freehold (in E&W) is the land, as opposed to any building that happens to be on it?
Thanks.
Sorry, I am no lawyer. I personally live in a Scottish "freehold" flat. In Scotland it is called Outright or Absolute Ownership. As you probably know, the legal systems of Scotland and England and Wales are fundamentally different. Maybe some legal eagle can enlighten us.
TP2
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- Lemon Half
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Re: Buying Freehold
TahiPanasDua wrote:Mike4 wrote:TahiPanasDua wrote:I suppose this has been covered before but thank heavens Scotland got rid of feudal leasehold in 2000. It was tidied up in 2004 and in 2010 all remaining long leases were converted to freehold.
It can be done. England should do the same.
TP2.
I'm intrigued! How can a flat be made freehold, given the freehold (in E&W) is the land, as opposed to any building that happens to be on it?
Thanks.
Sorry, I am no lawyer. I personally live in a Scottish "freehold" flat. In Scotland it is called Outright or Absolute Ownership. As you probably know, the legal systems of Scotland and England and Wales are fundamentally different. Maybe some legal eagle can enlighten us.
TP2
Yes, and perhaps a Scottish eagley legal in particular!
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- Lemon Half
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Re: Buying Freehold
TahiPanasDua wrote:I personally live in a Scottish "freehold" flat. In Scotland it is called Outright or Absolute Ownership. As you probably know, the legal systems of Scotland and England and Wales are fundamentally different. Maybe some legal eagle can enlighten us.
And who owns and is responsible for* the building itself, the common areas, the grounds/gardens, etc, etc?
* a management company may be responsible for the day to day but they will just have been appointed by the owner(s).
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- Lemon Quarter
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Re: Buying Freehold
We were warned not to buy a freehold flat because of disputes over who pays for s new roof etc.
Whole different kettle of fish for houses of course
Whole different kettle of fish for houses of course
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- Lemon Half
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Re: Buying Freehold
CliffEdge wrote:We were warned not to buy a freehold flat because of disputes over who pays for s new roof etc.
Whole different kettle of fish for houses of course
Quite. With houses it's easy, the freeholder is responsible for all of it.
With the Scottish freehold flats, I'd be even more concerned about who owns the land 50ft below my freehold flat and what obligation they have to let my flat persist in their airspace. Also what what obligation I have (if any) to provide support for the flat above mine and what mirror obligations exist on the flat owner(s) and land owner below mine.
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- The full Lemon
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Re: Buying Freehold
I have never lived in a Scottish leasehold flat but I have over the years owned various Scottish flats in a multi tenanted tenement. The older ones were a nightmare re sharing of costs for repairs to the common areas, for example roofs. The more recent ones tended in my experience to have some sort of formal management arrangements formally in place.
Feu duty applied only to the ground on which the property stood. The owner of the land, known as the 'Superior', granted someone the right to build on the land and in exchange for that the grantee was required to pay what was usually a modest annual sum in perpetuity. That is what was abolished, in exchange for a lump sum, or not, as the case may be.
With respect to TahiPanasDua, I think this subject is a bit of a red herring for the query being discussed as the English system and law appears to be entirely different.
Dod
Feu duty applied only to the ground on which the property stood. The owner of the land, known as the 'Superior', granted someone the right to build on the land and in exchange for that the grantee was required to pay what was usually a modest annual sum in perpetuity. That is what was abolished, in exchange for a lump sum, or not, as the case may be.
With respect to TahiPanasDua, I think this subject is a bit of a red herring for the query being discussed as the English system and law appears to be entirely different.
Dod
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- Lemon Quarter
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Re: Buying Freehold
.
i almost bought a freehold flat in devon.
my solicitor said dont but i decided to proceed .
however when getting insurance quotes , several major household names insurers gave me quite reasonable prices.
on reading the quotes i noticed that "freehold flat" was not mentioned anywhere .
when pressed , they admitted they didnt in fact cover freehold flats . ( even though they would have taken my money !).
so i pulled out .
i strongly suspect there are people out there contentedly paying for cover that will never materialise .
so take care , check your policy !.
i almost bought a freehold flat in devon.
my solicitor said dont but i decided to proceed .
however when getting insurance quotes , several major household names insurers gave me quite reasonable prices.
on reading the quotes i noticed that "freehold flat" was not mentioned anywhere .
when pressed , they admitted they didnt in fact cover freehold flats . ( even though they would have taken my money !).
so i pulled out .
i strongly suspect there are people out there contentedly paying for cover that will never materialise .
so take care , check your policy !.
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- Lemon Slice
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Re: Buying Freehold
Dod101 wrote:I have never lived in a Scottish leasehold flat but I have over the years owned various Scottish flats in a multi tenanted tenement. The older ones were a nightmare re sharing of costs for repairs to the common areas, for example roofs. The more recent ones tended in my experience to have some sort of formal management arrangements formally in place.
Feu duty applied only to the ground on which the property stood. The owner of the land, known as the 'Superior', granted someone the right to build on the land and in exchange for that the grantee was required to pay what was usually a modest annual sum in perpetuity. That is what was abolished, in exchange for a lump sum, or not, as the case may be.
With respect to TahiPanasDua, I think this subject is a bit of a red herring for the query being discussed as the English system and law appears to be entirely different.
Dod
With due respect to Dod, while admittedly offering no solution to the original poster's detailed problem, my observation was not entirely off topic. It pointed to possible long term fundamental solutions to the type of problem being experienced. Any non-English legal system may be so scrutinised for guidance.
TP2.
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- The full Lemon
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Re: Buying Freehold
TahiPanasDua wrote:Dod101 wrote:I have never lived in a Scottish leasehold flat but I have over the years owned various Scottish flats in a multi tenanted tenement. The older ones were a nightmare re sharing of costs for repairs to the common areas, for example roofs. The more recent ones tended in my experience to have some sort of formal management arrangements formally in place.
Feu duty applied only to the ground on which the property stood. The owner of the land, known as the 'Superior', granted someone the right to build on the land and in exchange for that the grantee was required to pay what was usually a modest annual sum in perpetuity. That is what was abolished, in exchange for a lump sum, or not, as the case may be.
With respect to TahiPanasDua, I think this subject is a bit of a red herring for the query being discussed as the English system and law appears to be entirely different.
Dod
With due respect to Dod, while admittedly offering no solution to the original poster's detailed problem, my observation was not entirely off topic. It pointed to possible long term fundamental solutions to the type of problem being experienced. Any non-English legal system may be so scrutinised for guidance.
TP2.
I do not think that there are many parallels between the English leasehold system and the old feu duty system in Scotland. However I do not know enough about the English system to argue the point, but apartments in any multi tenanted blocks are always going to have the problem that somebody needs to be responsible for the common areas.
Dod
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- Lemon Slice
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Re: Buying Freehold
Mike4 wrote:TahiPanasDua wrote:I suppose this has been covered before but thank heavens Scotland got rid of feudal leasehold in 2000. It was tidied up in 2004 and in 2010 all remaining long leases were converted to freehold.
It can be done. England should do the same.
TP2.
I'm intrigued! How can a flat be made freehold, given the freehold (in E&W) is the land, as opposed to any building that happens to be on it?
Thanks.
There are plenty of precedents for this in other legal jurisdictions. Scotland has already been mentioned.
One I am familiar with is the "Community of Owners" in Spain. Here, as well as owning a property, an owner effectively owns a share in the common assets of the building and grounds (in the case of flats) or the "urbanisation" (in the case of an estate). Assets might include things like roads, streetlighting, utilities, communal swimming pool, tennis courts, communal gardens, etc. The owners elect, through an annual general meeting, one owner to be the President (a nice foreign word for Chair) who is legally responsible for representing the community. If no one volunteers, one lucky owner gets selected by lottery.
Depending on the community's statutes, there may also Vice Presidents and/or a board of management. Owners may appoint a professional administrator who will arrange for collection of community fees from owners and undertake the routine day-to-day management, such as paying suppliers getting quotes for repairs, etc. The managers of the community (President/administrator/VPs/board) are responsible to owners through the General Meeting. Share of ownership is typically based on floor area and voting on proposals at general meetings requires a majority when counted both as owners and ownership shares. Some types of proposals may require three-fifths majorities or even unanimity. Fees, budgets and statements of account are all presented at the AGM along with other proposals from the board and owners.
The governing Spanish law is called the Horizontal Property Law (google it if interested, there are enough Brits in Spain for plenty of English translations to be found). There are horizontal property regimes in many other places (including the US). England and Wales are something of an exception with the very feudal hangover of freeholds and long leaseholds for domestic property.
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- Lemon Slice
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Re: Buying Freehold
Another system of ownership which might be of passing interest is that of "Tyneside flats" - something common in parts of North East England and a few other English localities. Here, the flats typically look like terraced houses but the buildings typically contain two flats: one first floor and one ground floor. The ownership arrangements are such that each owner has the freehold of one flat and the leasehold of the other. The leases prevent separation of an owner's interest between these two interests - both are sold at the same time to the new owner. The leases also specify how expenses for common elements are allocated between the two owners.
I suspect that Tyneside flat ownership arrangements were developed for these sorts of reasons. A local solicitor in the North East did once tell me that the Newcastle branch of the Law Society did much of the development ground work for the arrangements back in the late 1950s. Certainly insurance is not a problem, I have made a successful claim for one I own.
jackdaww wrote:.
i almost bought a freehold flat in devon.
my solicitor said dont but i decided to proceed .
however when getting insurance quotes , several major household names insurers gave me quite reasonable prices.
on reading the quotes i noticed that "freehold flat" was not mentioned anywhere .
when pressed , they admitted they didnt in fact cover freehold flats . ( even though they would have taken my money !).
so i pulled out .
i strongly suspect there are people out there contentedly paying for cover that will never materialise .
so take care , check your policy !.
I suspect that Tyneside flat ownership arrangements were developed for these sorts of reasons. A local solicitor in the North East did once tell me that the Newcastle branch of the Law Society did much of the development ground work for the arrangements back in the late 1950s. Certainly insurance is not a problem, I have made a successful claim for one I own.
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