Creating new leases on shop/flats from single freehold

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    Creating new leases on shop/flats from single freehold

    hi wondered if anyone can help, awaiting appointment with solicitor on friday but would like some info now if poss. I currently own the freehold for a shop and two flats, on one lease. Im currently creating three leases so that I can remortgage each property separately. I have the shop commercial mortgage in my name (and husbands) and the two flats in the name of a company we have created.( for tax purposes apparantly) Whose name does the leases go in and who is the freeholder becuase they cant be the same person. Can we stay the freeholder and the company be the lease holders for all three. Or the other way round, does it matter whos name the mortgage is in with reference to the lease or freeholder. Please can someone put some light on this for us
    thanks

    #2
    Originally posted by belle View Post
    hi wondered if anyone can help, awaiting appointment with solicitor on friday but would like some info now if poss. I currently own the freehold for a shop and two flats, on one lease. Im currently creating three leases so that I can remortgage each property separately. I have the shop commercial mortgage in my name (and husbands) and the two flats in the name of a company we have created.( for tax purposes apparantly) Whose name does the leases go in and who is the freeholder becuase they cant be the same person. Can we stay the freeholder and the company be the lease holders for all three. Or the other way round, does it matter whos name the mortgage is in with reference to the lease or freeholder. Please can someone put some light on this for us
    thanks
    Let's assume that you are X, husband is Y, and company is Z.

    X owns freehold of whole.

    X grants lease to X + Y for shop.

    X grants 2 leases (one per flat) to Z.

    X retains freehold reversion for whole.

    Each new owner as lessee can then mortgage a new lease as required, because only an owner can create a mortgage ("legal charge").

    Freehold title must be in name different from leasehold title.

    Simple, innit?
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Dear Belle,

      Generally speaking, either the Company owns the freehold asset and you and your husband own the leasehold interests or the other way round. Simply put, you cannot have a lease signed as lessor and lessee (landlord and tenant) by the same person(s). A limited Company is treated by law as a seperate legal entity from you and this means you can effectively split the freehold from the leasehold and still own them both.

      Once you have separated the freehold and leasehold interests, a mortgage company will treat them as such. This obviously has some bearing on whose name is on which mortgage as the freehold will be worth less than the leaseholds.

      I hope this assists.

      Yours sincerely,


      CORINNE TUPLIN
      DIRECTOR
      PRO-LEAGLE
      www.proleagle.com
      CORINNE TUPLIN
      SOLICITOR
      PRO-LEAGLE
      www.proleagle.com

      ___________________
      Please note that any comments made are personal opinion and do not constitute legal advice.

      For Service Charge Disputes, you may wish to use Pro-Leagle's online Service Charge Dispute Analyser: http://www.proleagle.com/servicecharges.htm

      Comment


        #4
        is this covered by some law?

        my landlord has done exactly this. he has bought the freehold to our building and is progressively buying out the flats all in his name.

        Comment


          #5
          Originally posted by moocow View Post
          is this covered by some law?

          my landlord has done exactly this. he has bought the freehold to our building and is progressively buying out the flats all in his name.
          Assuming that your reply's heading relates to rest of your message (and not to prior part of thread), the answer is "no".

          Your L is free, just as you are, to purchase each flat that comes up for sale. He has no special pre-emptive rights, unless deeds say so (unlikely).
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment

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