I don't want the freehold for a property - what can I do with it?

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    I don't want the freehold for a property - what can I do with it?

    I purchased a leasehold flat that was a repossession last year. When the solicitor started to sort out the legal docs etc it turned out that the flat came with the freehold for the whole building (which is converted into 5 flats incl the one that I own).

    As it was not ideal to leave the freehold without anyone taking specific responsibility (it was with an asset management company), I took over the freehold. I am now selling the flat to my sister and intended to set tup an RMA and transfer the freehold into this. HOwever, I don't want to be saddled with running the RMA.

    I have approached the other flat owners and they don't want the freehold either. Can I amend the leases somehow to give all flats a share in the freehold? What happens if I set up a RMA and no-one wants to run it? Any advice would be great.

    #2
    You can sell the freehold, either to the other lessees, or any other interested party.

    If ground rent is low, it probably won't be appealing to anyone (though if you are nasty/don't like the other lessees you might sell it to a property owner who is known to overcharge for such things like ground rent).

    If you really want free of it, and no one will buy, the only other option is to sell it to a Limited Company you own, and then allow the company to be dissolved (which incidently is what will happen if you set up a RMA, transfer the freehold to it and then no one does anything about it).

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      #3
      I would get a managing agent to look after the building.

      Comment


        #4
        Originally posted by bbva View Post
        I would get a managing agent to look after the building.
        Yes, don't give away control if your sister is going to keep the leasehold. I sold the freehold to another flat owner years ago and have regretted it ever since. Like bbva says, employ a good managing agent and put up with the extra cost.

        Comment


          #5
          But the managing agetn needs some to give them instructions, a client.

          You could say to all the others

          I am going to sell the freehold and it might be someone quite nasty or good.

          You will get it offered to you but what I could do is set up a right to manage company, I as free holder will not oppose it, if you all agree to join it and for at least two of be directors.

          The freeholder will only be collecting ground rents and won't be involved service charge or cost decisions, only we will.

          If you dont want either then I will put it up for auction and, simply put, you can decide to bid for it or not.

          PS no such thing as an "RMA"
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            Thanks for your responses so far.

            If the Ltd company is set up and then dissolved, does the freehold revert to the Crown? Can someone opt to buy it at a later date?

            I will look into costs of paying a management company to look after the property for me. I was just trying not to be involved in something that I don't need to be because ultimately I will still have to manage all communication with them.

            Comment


              #7
              Correct. If the freehold is sold to a Limited company (assuming the lessees don't exercise their right to first refusal) and this company is then dissolved/struck off, then the land will revert to the Crown - Hence you get what you want, which is no further involvement in the development.

              But as I didn't spot earlier, leases where the freeholder takes no interest in the development have to be sorted eventually (usually a sale when the purchaser suddenly backs out due to the problems with the freehold) and lose value over time as maintenance isn't done. You would be leaving your sister in a mess and when she eventually realises she may not be best pleased with you.

              Comment


                #8
                Originally posted by lizb View Post
                Thanks for your responses so far.

                If the Ltd company is set up and then dissolved, does the freehold revert to the Crown? Can someone opt to buy it at a later date?

                I will look into costs of paying a management company to look after the property for me. I was just trying not to be involved in something that I don't need to be because ultimately I will still have to manage all communication with them.
                But if it reverts to the Crown then the flat owners including you will find your flats are virtually unsaleable as there is no one to look after the building structure and various consents in the leases.

                if you instruct an Agent they will ahve delegated authority to run it day to day maintain paperwork and advise you, however the ultimate responsibility is still yours.

                The fees of an agent must of course be recoverable under the lease.
                Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                Comment


                  #9
                  Don't give the freehold title away if your sister is taking over your flat.

                  Every building needs maintenance , periodic painting every 4-5 years or whatever the lease says and insuring.

                  Just appoint a managing agent to collect the annual service charge and ground rent if applicable from the 5 flats and to arrange the annual audited accounts ( legal requirement under the L&T Act) and to deal with registration of flat transfers.

                  Comment


                    #10
                    it would be worthwhile to get the freehold valued - you do not give any indication of the ground rent. From experience, many of my landlord clients who want to get rid of their freeholds have success at auction. Just make sure that you comply with the Right of First Refusals legislation which under the Landlord & Tenant Act 1987 means that the freehold must first be offered to the lessees by way of a formal notice. Hope this helps.

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