Own the freehold - Shop with two flats above - How to create Leases

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    Own the freehold - Shop with two flats above - How to create Leases

    Bought the premises in an auction about 10 years ago. The flats and the shop are rented. In the future if I decide to sell a flat - Will I be able to do that? I will need a lease - How do i go about getting that done?

    #2
    Each of the flats have an address as does the shop

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      #3
      The first question will be - are there any existing leases?

      Just what did you buy at auction?

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        #4
        As far as I know - no leases.

        I bought the freehold for the shop and the 2 flats above.

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          #5
          How are there no leases? There must be a lease to effect the insurance at lease?

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            #6
            Not at all. The OP owns the freehold of the property, the shop may be let out on a lease but if the flats have been rack rented (in other words not sold for a premium under a long lease) then there will be no lease for the flats. I suggest you hire an experienced local solicitor to prepare the lease which he (or she) will probably do by reference to an online compendium of precedent leases published by a firm called practical law to which most professional firms pay an annual subscription of a couple of thousand quid a year depending on the number of users. Their precedents have become the go-to default form of leases in cases such as this. They have dozens of different versions all slightly different depending on the precise circumstances, such as whether the lessee or lessor is to insure and recover his costs. Don't try and do it yourself.

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              #7
              Hi Stacker ... Not sure I understand - what do you mean by insurance at lease? The property was being sold as a freehold ... I bought the freehold that included shop and 2 flats. Nothing mentioned (or needed) about leases.

              Each flat has a AST though and agent.

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                #8
                Thank you flyingfreehold - I will look for a experienced local solicitor to prepare the leases. I am guessing my solicitor wont know much. Can I contact practical law and get a recommendation for a solicitor. I have no intention of trying to do this myself. I would like each of the flats and the shop to have a lease so I can sell whenever I want. I am assuming I can have a lease term and ground rent as i wish but obviously within the law. I guess the ease would create a Title at land registry.

                Just had a look on https://uk.practicallaw.thomsonreuters.com - Has membership ... Should I join? Thanks for all your help,

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                  #9
                  I would certainly leave the drafting of the lease to a solicitor; when flats are sold under a new lease there is sometimes a bit of negotiating over the terms, the buyers solicitors want to justify their existence by making some petty amendments. Practical Law is not cheap, itsreally quite pricey( although an allowable tax expense) but its comprehensive. If you've got the time and want to learn in depth all sorts of procedures and law then by all means. By the way they have a few oddities. One is they wont register you with just a Hotmail or gmail type email; they want to see a corporate email address. Apparently they think someone with a corporate email address is less likely to scam them in some way. Second is that they will want you to have quite a complex password. If you are anything like me you think up great passwords on the spur of the moment and two weeks later have no recollection of them. With Practical Law its quite a faff to get a new one. So write down your password. Which is exactly what happened to me with Landlordzone. I couldn't remember the password for member account flying freehold so started a new membership as ATC.

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                    #10
                    As the property is 2 Flats (residential) and a ground floor shop (commercial) - I am being told that it would be better to also prepare a head-lease to cover the commercial parts of the property. This apparently helps in the future for preventing "right of first refusal" - Not sure I understand - Can anyone help?

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                      #11
                      I wouldn't worry about that. You just want two long leases prepared ready for when you sell the flats. Practical Law wont recommend a solicitor, they are a resource provider for the legal profession.

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                        #12
                        As I understand it you only need to create a lease when you decide to sell something.

                        This is what we did when we sold our 3 holiday flats. We advertised via an estate agent, negotiated the deal and our solicitor prepared the lease for each sale identifying what was being transferred.

                        We had to get title plans, of the freehold and the individual flats, drawn up too to go with the leases.

                        However we didn't want to retain the freehold and ,all the hassle that would go with it, so each flat would have a share of the freehold when all 3 had been sold. I've no idea how the freehold is now held as our solicitor advised that we should leave that decision to the 3 new freeholders to decide.

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                          #13
                          Hi Tipper - I too would like to get rid of the freehold once the flats are sold... A retail Shop makes things a little more complicated.

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