Vendor changed from freehold to leasehold at last minute

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    Vendor changed from freehold to leasehold at last minute

    Hi, i am buying the groundfloor flat of a 2 storey conversion. The vendor owns the freeholder of the whole building and there is a long lease yenant (78 yrs0 in the upstairs flat). The vendor was going to sell us the freehold of the building so we would own and live in the goundfloor flat freehold and we would be the freeholder for the tenant upstairs.

    But at the last minute before we exchanged contracts the vendor has decided she doesnt want to sell the freehold as she thinks the tenant upstairs will extend his lease soon so she wants to cash in on that, she has no real other interest in holding onto the freehold of my flat as shes going to grant me a 125 year lease (which is being drafted at the moment...)

    so i suggested why doesnt she split the freehold, and sell me share of freehold on the ground floor flat and she can retain the freehold on the first floor flat. Can she do this without involving the tenant upstairs? i.e is is straight forward for her to do this as she does own the freehold outright, so i would have thought so...

    any help you can give is much appreciated

    #2
    Originally posted by Penny06 View Post
    Hi, i am buying the groundfloor flat of a 2 storey conversion. The vendor owns the freeholder of the whole building and there is a long lease yenant (78 yrs0 in the upstairs flat). The vendor was going to sell us the freehold of the building so we would own and live in the goundfloor flat freehold and we would be the freeholder for the tenant upstairs.

    But at the last minute before we exchanged contracts the vendor has decided she doesnt want to sell the freehold as she thinks the tenant upstairs will extend his lease soon so she wants to cash in on that, she has no real other interest in holding onto the freehold of my flat as shes going to grant me a 125 year lease (which is being drafted at the moment...)

    so i suggested why doesnt she split the freehold, and sell me share of freehold on the ground floor flat and she can retain the freehold on the first floor flat. Can she do this without involving the tenant upstairs? i.e is is straight forward for her to do this as she does own the freehold outright, so i would have thought so...

    any help you can give is much appreciated
    NO NO NO- never ever sever freehold.
    It must be kept intact for whole building.
    BUT
    V could:
    a. grant lease to you; and
    b. transfer freehold reversion (for whole building) to you + other lessee. If she refuses, you can't make her yet (but you + other lessee can claim collective f/r thereafter in accordance with 1993 Act).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

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      #3
      but how do people buy share of freehold then if the frrehold must always remina intact? i have seen some of your replies on previous threads saying that freehold must not be split but i dont really understand why. i have often see share of freehold properties for sale, how does this work if you should split freehold? thanks again

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        #4
        If you are the ground floor flat and, especially if there is a garden, you want the freehold 100%. If she is going to split the freehold, that would be a deal breaker for me. Perhaps, you can get an undertaking that you have first refusal on 100% of the freehold after she extends the lease for upstairs.
        ASSUME NOTHING - QUESTION EVERYTHING!

        Comment


          #5
          Originally posted by Penny06 View Post
          but how do people buy share of freehold then if the frrehold must always remina intact? i have seen some of your replies on previous threads saying that freehold must not be split but i dont really understand why. i have often see share of freehold properties for sale, how does this work if you should split freehold? thanks again
          1. "Share of freehold" should mean that all lessees jointly own it all, each having an equal proportionate stake in it.
          2. Severing freehold creates gigantic problems about covenants. Send me pm with your telephone number if you want a fuller explanation.
          3. Exception: a new-fangled concept called "Commonhold". This is like a freehold umbrella, underneath which it is safe for each flat to be individually freehold because of the special commonhold code that applies.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            hi jeffery, ok i think i understand now, i want her to create a share of freehold between myself and her so we would both jointly own share of freehold. Rather than each of us owning a freehold flat which i know causes legal problems.

            As she owns the freehold of the building is it fairly straight forward for her to arrange so that i will buy the 'share of freehold' of the ground floor and she also gets to keep the other half i.e 'share of freehold' over the upstairs flat.

            thanks again

            Comment

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