Who can a lease be assigned to?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Who can a lease be assigned to?

    Hello, done some reading around this question and need one bit of clarification. Think I saw something on this site before but can't seem to find it!

    Scenario: I have converted a house into two flats with 2 seperatae entrances, utilities, gardens etc. Originally house had a freehold mortgage in the name of me and a partner.

    I now need to split the title and create leases.

    Is it possible to leave the freehold in the name of a partner and me and then assign both leases to myself?

    Please help as I'm hearing various different things!

    #2
    You can actually only assign an existing lease.

    When it comes to creating a new lease the only impossibility is that the landlord and tenant are identical. So, A cannot grant a lease to A; and A and B cannot grant a lease to A and B. However, A can grant a lease to A and B; and A and B can grant a lease to B.

    Why do you want to grant leases?

    Comment


      #3
      Thanks for the quick response.

      I've been told by the mortgage company that I need to split the title and effectively split the mortgage so the original amount borrowed is split across each flat. Both flats are on rent and I need to set up a buy to let mortgage on each

      I want to own the freehold with my partner and then assign the lease for each flat to myself - from what you wrote, this should be possible? Reason also for creating the leases is so I can borrow more against each flat and use the money for something else

      What are your thoughts?

      Comment


        #4
        Originally posted by BuildersMate View Post
        I've been told by the mortgage company that I need to split the title and effectively split the mortgage so the original amount borrowed is split across each flat. Both flats are on rent and I need to set up a buy to let mortgage on each
        That makes no sense that I can see. How can it improve the mortgage company's security? It is either a case of the mortgage company not knowing what it is is doing or a case of churning to generate fees.

        Originally posted by BuildersMate View Post
        I want to own the freehold with my partner and then assign the lease for each flat to myself - from what you wrote, this should be possible? Reason also for creating the leases is so I can borrow more against each flat and use the money for something else
        If as a matter of fact you can borrow more by mortgaging each flat separately then that does make sense.

        Comment


          #5
          Originally posted by Lawcruncher View Post
          That makes no sense that I can see. How can it improve the mortgage company's security?
          Ok....

          If the lender has to repossess/sell, then it is far easier to sell two leasehold flats to either owner occupiers or individual BTL, as opposed to a house divided into flats. Accordingly the value will be higher.

          I agree that it is perfectly possible to fund it without granting leases, and using a company as below might avoid the need to separate ownerships as lawcruncher has posted, but you might get better terms.

          I suggest you discuss with it a solicitor who deal with property matters not just a conveyancer and get advice from a financial consultant not "dave" really Sanjeet, from the call centre.


          I'd be careful though about the freehold and creation of leases and take tax advice to minimise your liability.

          As freeholds can be valuable too, and bluntly A + B may fall out/fail to agree, I suggest the freehold be put into a simple company,with 2 shares, so that you can sell the freehold ( by selling the company) later without having to offer it to leaseholders.

          But either way do make sure that you put into your declaration of trust partnership agreement or articles some form of mediation or arbitration in the event you disagree over something.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            Good advice about a company owning the freehold, so that selling the company has some tax advantages over selling the freehold title.
            But either way do make sure that you put into your declaration of trust partnership agreement or articles some form of mediation or arbitration in the event you disagree over something.
            As an example use the Accountant for financial disagreements or the solicitor for legal disagreements.
            I was lucky not to need either, but my fellow director and I who owned 50% shares each, had that agreement written into the Memorandum for the company.
            Hindsight is a great gift, as is using other people's experiences, which this web-site often imparts on posters.

            Comment

            Latest Activity

            Collapse

            • Reply to Purchase of freehold
              by Drewcole
              Hi, I thought it was a little high considering its two flat with a tiny hallway shared that hasn't been maintained since I've owned.

              I guess I can only try, if I do nothing then I'm letting them get away with over charging on the insurance. £1500 for insurance for the two flats seems...
              11-08-2020, 11:40 AM
            • Purchase of freehold
              by Drewcole
              Hi All,

              I own a 2 bed ground floor flat in a converted Victorian house (2 flats in total) that i have a long lease of 167yrs. I currently pay a ground rent of £160, a service charge of £400 and a insurance premium of £800!

              I have spoken to the owner of the flat above and...
              10-08-2020, 15:16 PM
            • Buying house with sitting tenant
              by carolem
              Residential house for sale with tenant holding over. AST for 6 months granted by letting agents of current owner in November 2019. Since it expired tenant been holding over and paying rent etc. As a potential purchaser who wants to buy it as investment with tenant in situ are there any issues for me...
              07-08-2020, 13:20 PM
            • Reply to Buying house with sitting tenant
              by Gordon999
              Yes, you should arrange for new AST rental agreement because the last one is in the previous owner's name and no longer valid. You have no legal right to hold the tenants deposit without AST agreement. .
              11-08-2020, 10:37 AM
            • Reply to Purchase of freehold
              by Gordon999
              If you find alternative companies are quoting much lower insurance premium, you can ask the current broker to declare how much commission has been paid and then you consider making application to FTT for judgement on the reasonable cost of the buildings insurance. ,

              I think your current...
              11-08-2020, 09:17 AM
            • Reply to Purchase of freehold
              by Drewcole
              Thanks for the replies, so I've had a quick look online to. See how long the lease is on the other flat, she seems to have about 63yrs remaining so the cost to try a purchase the freehold myself is a no go.

              I will write and request the insurance info and try and go down that route. Is there...
              11-08-2020, 07:12 AM
            • Reply to Purchase of freehold
              by Gordon999
              It requires both flats in a building with 2 flats ) to participate in compulsory freehold purchase. See last sentence in section 2 in the free guide.

              https://www.lease-advice.org/advice-...tting-started/

              If the buildings insurance is £800 per flat, you are probably...
              10-08-2020, 18:00 PM
            • Reply to Purchase of freehold
              by Anna1985
              I would check how long is downstairs lease.
              and then would run the estimated costs freehold on lease calculator.
              And go from there.
              10-08-2020, 17:52 PM
            • Documentation for renovations on share of freehold flat
              by Basecamp
              We are a first floor flat, share of freehold with the ground floor flat. We both have a 999 year lease. In 2014 we did a loft conversion. We had a party wall agreement with the other share of freeholder flat, planning permission and it has all been signed off by building control. However, should we...
              06-08-2020, 10:45 AM
            • Reply to Documentation for renovations on share of freehold flat
              by Basecamp
              Thank you for your responses. We will consult w lawyer to have the Deed updated with the new floor plan....
              08-08-2020, 09:16 AM
            Working...
            X