Splitting the cost of a freehold

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    Splitting the cost of a freehold

    Hello,

    I'm looking for some advice; I'm not sure if this is the right sub-forum, but it looked relevant to my question. Sorry if it's not.

    My girlfriend and I have recently bought a flat in a converted house and all the tenants (there are two other flats) wish to purchase the freehold, which is fine by us. I guess we'll set up a limited company to do so before long.

    I've been trying to find information online (without much luck) on how the cost is usually split between the owners of the flats. From what I understand, from hearsay, the cost is divided according to the size of the flats, although it has been suggested (by the owners of one of the other flats) that a third share each, or a compromise, may be preferred. Are there any general rules about how this is usually done? Our flat is a good deal smaller than both of the other flats. We just want to pay what's fair for all, either way it turns out, as that seems the best way to begin a situation like this.

    What are the consequences? If we pay more than the price according to the size of the flat, will we be out of pocket later on (if we choose to sell and the property is valued and advertised as share of freehold)?

    Also, if we do buy a lesser share, will we have a lesser say in matters as we would own a smaller share of the freehold?

    Any information will be much appreciated. Thanks!

    #2
    1. With hindsight, better forum would have been LONG LEASEHOLD or CONVEYANCING.
    2. Equal thirds of fees is fairest, because the conveyancing work is carried out for all three leaseholders equally.
    3. However, it would be fair to split actual p/price unequally, perhaps proportionate to each flat's present value.
    4. Either way, each flat will have equal say in freehold issues, eg mamnagement and expenditures.
    5. Whilst you could incorporate a company (limited by guarantee), this is not essential. See other threads re holding f/r in the three joint names.
    6. Finally, do NOT split the f/r- keep it intact for whole block.
    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
      If the leases are of unequal length then this might make a difference - someone with say 65 years left would have to pay more to extend his lease than someone with say 90 years so the people with the longer leases should pay less. Otherwise I agree with Jeffrey.

      As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients
      RICHARD WEBSTER

      As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

      Comment


        #4
        Originally posted by Richard Webster View Post
        If the leases are of unequal length then this might make a difference - someone with say 65 years left would have to pay more to extend his lease than someone with say 90 years so the people with the longer leases should pay less. Otherwise I agree with Jeffrey.

        As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients
        I agree.
        Note that length of leases disregards their actual dates of grant/completion; use only (a) term commencement date and (b) term length.
        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


          #5
          Thanks for the advice! Much appreciated.

          Comment

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