Selling flat as a freeholder

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    Selling flat as a freeholder

    I own the freehold to my building and also one of the flats. The other flat has no interest in becoming a shared freeholder unfortunately so that isn't an option.

    I am selling my flat which is held on a 61-year lease. Is it best to grant a new lease to the buyer or extend on completion? Unfortunately, as I own the freehold and leasehold in the same name, I cannot do anything to the lease until the leasehold is sold.

    If granting a new lease, obviously it shouldn't conflict with the neighbour's existing lease. Will buyer's solicitor not ask questions regarding old style clauses such as "maintenance charge shared based on value of each property"?

    #2
    Hi Eshroom

    You will be able to sell your flat for MUCH more if you extend the lease. I appreciate you cannot create a deed to yourself hence your comment. However, all you need to do is transfer a percentage of your lease to another person as Tenants in Common (even 1% suffices). You will then not be the same party and, as freeholder, be able to grant a lease extension. To keep it simple you do not need to change any of the existing lease terms except the expiry term. The new lease will refer to the terms of the old lease.

    To make your flat even more attractive to a potential buyer you may want to extend the lease for longer than typical extensions. You can go up to 999 years.

    Are you intending to keep the freehold (it doesn't sound as though you want to keep all of it)? If not, you could consider selling the freehold too. But don't forget to follow RFR rules even though the other leaseholder is not interested in buying the freehold.

    See the LEASE website for further information on RFR.

    Best to speak to a solicitor re first para if you decide to consider extending your lease prior to sale.

    Comment


      #3
      Hi vmart. Thanks for the response. I already have a sale agreed on the basis of a lease with 250 years. I understand I cannot lease to myself and so cannot touch the lease right now, but surely as freeholder I can simply sell the flat with a new lease? i.e. new lease registered to new owner upon completion, made out between me (freeholder) and the new owner?

      Comment


        #4
        That can all be done at the time of the transfer. The solicitors for each party will deal with it so long as you instruct your solicitor to effect the extension at the time of sale.

        Comment


          #5
          Ah ok. Gotscha. So it would be a lease extension rather than granting a new lease altogether?

          Comment

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