1 building, 5 Titles - 1 freehold and 4 leasehold - I own one of the leases. If I purchase the freehold what happens to the lease that I own? does that lease extinguish and with it my need to pay service charges and ground rent? Thank you in advance.
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No.
You should not be allowed to buy the freehold as yourself. Typical tactics are for couples to buy one of them individually and the other as a couple.
A well written lease will set percentages as service charges. If you extinguish the lease, after getting the freehold, you will still be responsible for 100% of the maintenance work, but only be receiving (n-1)/n times the amount of money needed to cover this, so you will still end up having to make up the shortfall. Calculation assumes equal percentages.
I imagine a flat which is tied to the freehold will be more difficult to sell. -
Even if, say as the result of an inheritance, you end up with both freehold and leasehold, my understanding is that they are nor, automatically, merged.Comment
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1. A copy of the freehold title and site plan can be bought from Land Registry Online for £3 each by credit card and be downloaded.
The title will include the building and garden areas up to the boundary fence and state it is subject to 4 leases. and show who is the current title holder
2. . A copy of the leasehold title for your flat and plan ( of demised area ) can be bought from Land Registry..
3. The UK mortgage lenders requires a flat to have a maintenance agreement to qualify for mortgage loan, and so the flat must remain under leasehold title.
4. The value of a leasehold flat slowly falls in value as the lease gets shorter.and lease extension becomes more expensive if after unexpired term falls below 80 years. The benefit of owning the freehold title is that the ground rent can be stopped and the flat can be granted a free statutory 90 years lease extension.
(Note - the freeholder cannot create a lease for himself , so if the freeholder is A, the leaseholder must be A + B , or vice versa. ).Comment
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As leaseholder64 has said, if you own a lease in a building that you own the freehold of, the lease will still require service charges and ground rent to be paid to the freeholder (the service charges being reimbursement for money that the freeholder has paid, or is intending to pay, for services/maintenance provided to the block).Originally posted by cymro123 View Post
You wouldn't physically have to pay either of these as they would be payments to yourself, but the service charge payments attributable to your lease would not become recoverable from the other leaseholders and would have to be accounted for in service charge accounts as an amount paid by the freeholder in respect of the lease that they own.
Combining the lease with the freehold would not change this, it would just mean that the freeholder becomes responsible for whatever the owner of the lease would have been responsible for.
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