Agent refusing to allow purchase of freehold in RTM

  • Filter
  • Time
  • Show
Clear All
new posts

    Agent refusing to allow purchase of freehold in RTM

    I have a flat which I bought in 2006. There was a RTM company already set up a couple of months before I bought. The property is a converted house of 4 flats. At the time I was offered my share in the freehold, I declined because I was planning to renovate and sell. Circumstances changed and I kept it and rented it out.
    There is a very aggressive agent in charge of the RTM. Over time 3 of the 4 flats now own their share as they bought into it at point of purchase.
    The owners are all now listed as directors, but one in particular deals with most of it.

    I am planning to sell now and have asked the agent and the RTM directors if I can have an estimated figure for buying my share ( I dont plan to buy it I just want to know the cost for a new buyer.)
    The flat has a short lease now of about 70 yrs. The agent has stated that they will not offer the freehold, only a lease extension, and they state that I need to get (their) chartered surveyor to value it at a cost of £750 rather than just give me an estimate.
    I have had an estate agent valuation recently so I already know what the market value is, and, Ive checked the rough guides online re freehold costs. I just wanted written confirmation pre sale.

    Three questions:
    1. I believe I have the legal right to my share of the freehold-is this correct?
    2. Can they refuse to offer the freehold?
    3. Are they not legally required to tell me the cost of renewal of the lease?

    The RTM only manages the maintenance of the building.

    The freeholder company should be a separate company, which demands your ground rent.

    If you were offered the chance to participate in buying the freehold and you refused , then you made the wrong choice.

    You have no legal power to make a compulsory purchase of a share of the freehold. It would be a voluntary sale by the existing freeholders.

    You do have a legal right apply for statutory 90 years lease extension ( = 70yrs + 90yrs = 160 years lease at peppercorn ground rent.

    For estimated cost of extension , you can use the calculator at :

    The formal route will require you to pay for the RICS surveyor's valuation fee and legal fees for freeholders side plus your own fees. (

    see free guide at ).

    To answer your questions :

    1. No
    2. Yes
    3. You have legal right to statutory 90 years lease extension. But you pay all the freeholder,s costs.


      You may also find that the 'freeholders' have already given themselves 999 year leases too (I would have if in their position) and they now want to profit from your short lease!


        The R.T.M. ( Right to manage ) company will not own the freehold. They manage the place on behalf of the freeholder.
        If anyone has a "share", it will be a share, and a share certificate issued that gives you a "share" of the R.T.M. company only, and not a share in the freehold company.

        Sounds like 3 of the four flats bought the freehold, and that would make them an R.M.C. ( Resident managing company ).

        Just getting your terminology right for people reading this thread.

        Post number 2 gives you your answers.

        Having to pay all freeholders costs before they extend the lease is normal.

        Assuming it was the freehold that was purchased, and the 3 flats paid maybe £ 5000 each, then you would have to pay the same, as why would they let 3 flats pay £ 5000, but you get it cheaper than them. -- not fair.

        So you went there to make a profit by renovating and selling. Now you are complaining ( sort of ) that they may be wanting ( it appears ) to make a profit, and make a profit from someone who had no intention to live there and profit from the sale, and the freeholder gets nothing from your sale.

        I have been aggressive to developers, and not given them any help, as they always ride roughshod over the management and residents -- -- always. in my experience.

        Remember, the freeholder owns your flat and you just lease it from them. You did not buy it from them, hence all the hoops you are trying to get through, which is normal.


          Thanks for the replies, sorry if I was unclear- the RTM owns the freehold.
          Gordon999- re the peppercorn lease renewal, I thought the term 'peppercorn' meant low cost to buy. Please can you explain what peppercorn ground rent is? Does that mean - Yearly ground rent x years = cost to renew?

          I plan to sell at auction and let someone else deal with the agents as Ive had enough of them tbh!


            Ram; thanks for the info. Im not complaining at all, I just want to know the full details before selling so the new buyer understands, and so that I can figure out any capital gains potential costs, and ultimately so I dont sell for a loss. They have refused to offer me the freehold.
            Just checking, but a new buyer would not have the issue of freehold purchase being refused would they? -as they should be offered it at point of sale anyway which will add value for them ultimately.
            Ill be looking for cash buyer as a mortgage on 70yrs is prob going to be a trauma to deal with.


              The RTM is a company with legal "right to manage" of the building belonging to the freeholder. Leaseholders are members of the RTM company.

              If the RTM buys the freehold title, it is no long an RTM company and it should change its name ( drop the RTM from company name ). The leaseholders have no membership rights.

              You are probably holding the leasehold flat under a 99 year lease and paying annual ground rent to the freehold company and the now lease has 70 years remaining.

              If you sell with only 70 years remaining on the lease , you will get a low price because most mortgage companies will not offer a mortgage loan. If you sell after statutory 90 years lease extension , you will get a higher price because the buyer can buy with a mortgage.

              The cost of statutory 90 years lease extension is expensive because it includes the loss of 70 years ground rent, pus cost of 90 years delay to return of property plus 50% of the marriage value plus all of freeholders costs.

              After statutory lease extension, you are on a 160 years lease and paying peppercorn annual ground rent (= £ 0 ).

              This peppercorn ground rent comes after statutory 90 years lease extension .

              So don't get confused by the leasehold situation . . If you pay your ground rent and service charge on time, it is no hassle from agents.

              If your flat is in good condition,you should sell through a local estate agent operating near to bus station or railway station.


                Originally posted by RW432 View Post
                1 ) They have refused to offer me the freehold.
                2) new buyer would not have the issue of freehold purchase being refused would they?

                The company that owns the freehold is an R.M.C.

                1) They have refused to offer you a share in the company that owns the freehold, and not a share of the freehold.

                2) There is no reason to offer an incoming new flat owner any share in the company that owns the freehold.
                and as before, they would want them to pay the same amount the other leaseholders paid.
                I assume you will have no idea if new owner would be offered a share.
                All depends if they can get money for the share to reduce the overall costs, legal fees initially incurred by other 3.

                If the articles ( there are two ) do not say all leaseholders will be given a share in the freehold company, then there is no obligation to offer a share to anyone.

                Off to do some management duties


                  P.S. to above post number 8

                  Terminology corrected.

                  If you are offered a share in the company, and often it's £ 1 per share, you don't become an automatic Director.
                  Directors are chosen for their abilities to direct and know all the laws, and not because they just happen to buy a flat.

                  But if one is asked to pay a significant amount of money, you can then say you have a share of the freehold Freehold owned by the 4 of you. And of course, you should then be made a director of the company.

                  Maybe they don't want any more directors, hence refusal to bring you an board.


                  Latest Activity