Offer to purchase management of building

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    Offer to purchase management of building

    Looking for some advice please.

    I am a leaseholder of a flat, there are two in total with shops on the ground floor.

    The freeholder has sold long leases of the ground floor shops, they hold the freehold and management of the building.

    As well as the ground rent from the two flats, the freeholder receives circa £100 a year from each of two licensees in adjoining shops who use the access to the rear yard.

    Freeholder is looking to dispose of it now as they have sold the shops, they are looking to get circa £15,000

    Freeholder has asked if we, the two flat leaseholders would be interested in purchasing, we would control of any future lease extensions / works / insurance / management.

    Would like to know if this would bring any benefit and risks if we were to purchase.

    #2
    Presume the "management offer" means the sale of freehold title. What is the lease term and annual ground rent from 2 shops and 2 flats ?

    Are you located on the town's main shopping street or on secondary road in the suburbs ( residential or industrial area ? )

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      #3
      The existing company will be holding the freehold however looking to sell the management of the building. The ground rent for the each of the flats is £150 per year. The access to the rear yard for the two shops is £100 each. I'll check on the ground rent for the shops and lease term.
      Located on the high street itself, one of the shops is a manned dry cleaner and the other is a carpet shop.

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        #4
        This makes no sense, unless there is something we don't know then run a mile. It can't be worth £15k to get a management contract and lease extensions will still go to freeholder and you will have the added hassle of collecting service charge.
        he needs to be paying you not the other way round

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          #5
          I didn't fully understand - the freeholder is looking to sell the freehold for £15k, that would mean the purchaser takes ownership of managing the property.
          Not sure what other benefit there is in purchasing the freehold - it would be a share of freehold between the 2 flat owners or including the 2 retail units owners on the ground floor.
          What would be the benefits and risk if we purchase the freehold please

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            #6
            Well, benefits are giving you control of expenses and lease but you will have the problem of recovering service charges from the shops which might not be easy. He clearly wants rid of it for a reason.
            MAybe just extend your lease before he sells it...

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