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Hi Jemms,

I have purchased a SHARE of the freehold at one of my buy-to-let investment flats. The main advantages is that you save on the annual ground rent and the freeholder (of which you hold a single share) can also choose which management company is used to maintain and manage the communal areas.

Flat management companies typically charge 20% of all management fees to cover their administrative costs and - to save this cost and to get more control over the running of the flats - residents often "club together" to purchase the freehold and then elect their own management committee.

In principle the flat would also be worth more money (when sold) although, in practice, I am not sure it will make a huge amount of difference to capital value.

Is it worth buying the freehold? It probably is worth it as long as you can forecast the amount in management charges that can be saved ... and also because it is likely that the block will be better maintained under the control of a resident management committee than a flat management company (that are usually situated in a city far far away from the flat block itself).

Hope that helps .....


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Definitely purchase if you can.

This way you as a block can form your own management company and make a better job of running the block at lower costs than an existing company. Make sure you use a good solicitor to establish that you are getting the whole of the freehold including any car parking areas and gardens. It would be more beneficlal if several of you used the same solicitor to make costs negotiation easy.

An apartment where a share of the freehold is owned is always slightly more valuable when selling.


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If you buy the freehold make sure you get decent legal advice regarding the ownership of the freehold. This is extremely important because it can be a nightmare if you get it wrong!

I've recently bought a repossession flat which was part of a larger Victorian building converted into three separate flats. Each flat owner had a share of the freehold, and this was done by simply by putting their names on the freehold title with the Land Registry. Therefore in order to transfer the share of the freehold every person named on the freehold had to sign the transfer document with the Land Registry. Unfortunately, the mortgage company of the repossessed flat only secured their loan against the lease (this I understand is fairly common), and therefore they only repossessed the leasehold and not the freehold share. In order to transfer the freehold into my name I had to track down the repossessed former owner, persuade them to sign the freehold into my name, and also get each of the other freehold owners to sign a transfer.

Fortunately the repossessed former owner was genuinely helpful and willing to co-operate, but if he hadn't been then I'd have been stuck (and with someone whose been repossessed I can easily imaging a situation where the former owner would ignore my request and vanish). In that situation there would have been no legal remedy to force him to transfer the freehold into my name and to remove himself from the register. He would, after all, be the legitimate joint owner of the freehold, and could quite easily have demanded a hefty fee to get him to transfer his ownership. If he hadn’t transferred it the freehold would have gone into an unworkable limbo. This would also have been a disaster for the other flat owners since they would be unable to transfer their share of the ownership if they had wanted to sell, and any changes under the lease agreement would also be impossible because it would also need his consent as the freeholder!

I've been advised of two options to avoid this situation in the future. One is to set up a company to own the freehold and then have each leaseholder entitled in the company constitution to be issued with a share in the company. The company can then issue a share to a new owner without necessarily getting all of the other shareholders to consent. However, this will require a fair amount of work to run the company and you will need to ensure annual returns are submitted to Companies House etc. The other alternative is to make it an obligation under the lease for the existing freehold owners to transfer title in the freehold jointly into the new flat owner’s name, and to make it a requirement for the freeholders to be flat owners. This would leave a clear legal remedy in the case of repossession or even a normal sale where co-freeholders refuse to put the new flat owner on the freehold.

One last, quick point. The Land Registry has really clamped down on the procedure for transferring freehold title in the last couple of years. It used to just be the case that a freeholder would simply sing a TR1 transfer form (with a witness) and your solicitor would do the rest. Now each freehold owner must not only sign the form, but also submit an ID form which requires them to go and see an independent solicitor with a passport size photograph, photographic ID (eg a passport) and get that solicitor to verify their identity. Now if one of your joint freeholders lives abroad it’s going to be extremely expensive and costly to get them to co-operate! One of my joint freeholder’s lives over100 miles away and just that distance has made it a nightmare trying to get him to co-operate! I've had to offer to pay all his costs involved in seeing the solicotr etc, but at least the threat of a freehold in limbo was a powerful motivation for him!

Hope it all works out


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