Selling my flat with whole freehold?

[David peters]

Hi folks,

I’m in need of a bit of advice if anyone can help?

I own and live in a flat in a purpose built block. There is only two flats, so another one upstairs from mine. A little while ago, the option came available for me to buy the freehold of the building, so I did. So I own the whole freehold.

I’m now coming to sell my flat and I’m not too sure what to do about the freehold situation. I was initially going to sell my flat with the whole freehold but then my upstairs neighbours told me they had First right to refusal.

My solicitors have said that I can basically do what I want, so sell part of the freehold or the whole freehold to whoever I want - but I’m not 100% confident with what my solicitors are telling me.

So I basically want to know do I have to offer the freehold or a share of the freehold to the upstairs tenants first, or can I go ahead and sell the whole freehold to the new buyers of my flat?

My goal is to sell my flat as quickly as possible, I’m not bothered on trying to make the most money from the freehold. I’m thinking to sell a share of the freehold to the buyers of my flat and retain a share myself. Then I can sell the other share of the freehold to the upstairs tenants once I’ve sold my flat. Am I allowed to do this?

Any advice much appreciated

David

[Mr Sussex]

I’m not an expert, but I do believe any leaseholder should be officially be informed of sale of freehold and given the chance to buy it. Plus if you own the entire freehold you are essentially the landlord of the building and as such responsible for buildings insurance and upkeep

[Section20z]

Your solicitor is right, you can do what you like but common courtesy would say offer freehold to neighbour and sell flat after granting new lease if needed.
If you have time the ideal is to transfer freehold to a company jointly owned by both flats then sell your flat with 50% of the freehold company.

[David peters]

Section20z,

Thanks for your help, much appreciated.

Any chance you can expand a bit on why RFR doesn’t apply in this case?

Yep I know the other leaseholders want to buy a share of the freehold, so I’m trying to sell my flat as share of freehold and then sell them the other share when I’ve sold my flat.

I was thinking of setting the price at what I paid for the freehold (or their half) plus half the solicitor fees I had to pay, so I’m not at a loss. Do you think this is reasonable?

Thanks again

[Section20z]

As there's only two flats, you would need more than 50% to exercise the right which is clearly impossible.
Price depends on many factors so either get it valued or just sell for what you paid if you're happy with that
incidentally the freehold should not be in the same name as the leasehold, (though it frequently happens ) but best it is put in a company name and then any future flat sale just goes with a half share in the company

[pilman]

incidentally the freehold should not be in the same name as the leasehold,

A lease cannot be granted by a freeholder to himself, but once an original lease was granted by a freeholder to another person, so that both properties are registered with separate proprietors shown on each register of title, nothing prevents the leaseholder from acquiring the freehold title at any time in the future.

The freehold title will then be registered with the same proprietor who is recorded on the leasehold title, but that is not prevented by law.

The fact that more than 50% of the Leaseholders have to be involved to compel a transfer of the freehold to them is correct, which is why the current proprietor of the freehold title can deal with its sale in any way that suits him.

That does not require the introduction of a limited company that will just increase the costs involved in any sale and require annual fees to retain such a company in existence.