Diesel

Maddening!

Arranged to buy the freehold on a block of three flats where I used to live and split it up thirds with the other two flat owners. All held in a registered company at 1/3 of freehold each.

So, I was 2 mins ago arranging a remortgage on the property but it seems no one likes freehold flats - the IFA just walked away to do some research! I though getting rid of a dodgy fee charging leaseholder and then actually owning the ground your property sits on was a blinding idea!!!

Anyone know what's going on? Should our freehold holding company lease back the flat to me

Realise its a deep q, but you never know with Scoobynet!!!

Patt@firstime

Flying Freehold there known as - you will struggle to find a lender who lends on them but it can be done. I'll see if I can find some contact info out for you for lenders who will

DrunkenPikie

Never heard of that tell us more, in my experience shared freeholds have been no bar to borrowing.

Account deleted by request

Incorrect - it is not flying freehold.

When you hold the freehold you actually a share of. Your flat for mortgage purposes is leasehold with a share of the freehold. This should cause no problems at all. I am involved with many apartments & blocks of flats and have never had this problem.

PM me if you need more info.

Chop

DrunkenPikie

Exactly as I thought.

chris singleton

This is spot on, your flat is still leasehold only you will own a share of the freehold reversion. This is a good position to be in as you are effictively the captain of your own ship (albeit with 2 other captains ). Should help saleability in the future as well as you won't have to worry about paying a huge premium to extend the Lease term. I assume that this is some sort of house conversion rather than a purpose built block. If so, it's a good idea to arrange a block buildings insurance policy for the building as opposed to each Lessee insuring individually.

Chris

richardg

pat - flying freehold would apply to something like a section of building with car park access underneath, but with it's own entrance. ie, freehold, but up in the air, hence "flying"

diesel - presumably you still have the lease you originally acquired for your flat, but you also own an interest in the reversionary title. even though you own a share in the freehold, the lease is still valid, albeit that all references to "the Landlord" refer to yourself and your fellow leaseholders. the two can be dealt with individually if your funders are confused by this as they will be seperate titles (with sep numbers). if you need to refinance both, then there is no need to tie the two together.

Diesel

Thanks for your advice chaps - I'll change 'The Landlord' to be the company we set up and all should be fine. Do I need to register that change of freeholder with an agency at all?

richardg

depends. speak to a solicitor (cheaper over a pint than in the office of course!) i think you need to check whether "the owners are the owners" or whether "the owners of the leasehold interests own the company which owns the reversionary interest". there may be land registry issues (ie registration of "owners" of different interests in the title)

Harry_Boy

A change in freehold ownership must always be registered at HMLR.

The granting of a lease for more than 21 years, or the assignment of a leasehold interest with more than 21 years left to run must also be registered.

As is mentioned above, this is an entirely different situation to a 'flying freehold', and it's worrying that the IFA did not understand the principle.

A flying freehold usually occurs where there is an access way that belongs to another party (such as a passage), beneath your property, or where an attic or other room extends over another's property.

That's one of the reasons why you will not find freehold flats in the UK, and why leases for flats contain mutual rights and oblgations of support, shelter and protection for each of the flats.

The freehold interest in the land is entirely separate, and this is why there has been a recent move towards 'commonhold', as a category of property title. This exists successfully outside the UK, but is only just appearing here.

The principle is that each leaseholder has a share in the freehold to the land, and hence responsibility to ensure that the covenants to which the lessees subscribe are observed by each of them.

Depending on the length of term left on the lease, you should have no problem in obtaining finance, subject to status etc...

douglasb

Freehold flats do exist in Scotland. I know; I used to own one. It's actually very common in Scotland and isn't a problem for mortage lenders.

The mutual obligations bit is generally taken care of by using a management company (who will be surveyors or similar). They will handle things like repairs to the roof and bill the owners half yearly for a management charge and the cost of any repairs.

Harry_Boy

The worse thing about the principle of a freehold flat though is the concept that you own everything 'to the top of the sky and the centre of the earth'.

This fundamentally conflicts with most people's idea of what a flat is, so a lease is the only sound way of ensuring that mutual rights of support, shelter and protection can be enforced between the tenants.

To achieve this, you need a 'higher' reversionary interest - hence the conecpt of the landlord. A management company can technically do the same, but it's actually a cumbersome way of getting the flat owners to buy into the concept, as well as being less effective in terms of enforcement.

Hence, the landlord/tenant relationship is the most elegant solution.