Divide share of freehold flat maisonette into two flats

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    Divide share of freehold flat maisonette into two flats

    Dear All,

    I'ma bit confused on where to start my research, I hope you can help.

    I have a 70sq m first flat maisonette with share of freehold. I think I can release around30sq m from the loft space. I'm wondering whether I can get two flats out of it. If so, I have these questions:

    1) I have share of freehold with downstairs flat. We haven't yet sorted the lease out etc yet, we have literally JUST bought the freehold and done nothing else. If I am able to get two flats out of my maisonette, how does that impact the other share of freehold owner? Would their share go down to 33% If so, I'd have to compensate them - what would be usual?

    2) I imagine I have to consult them - how far do I need to negotiate with them and will they block me? If so, what would be their reasons? They seem straightforward people so wouldn't do it out of malice, but likely just because it disadvantages them. How would that be? We have separate entrances and back gardens (shared front garden/space). I'm just wondering how it negatively impacts them.

    2.5) Should I try to buy their portion of freehold?

    3) I know I need consent and building regs from council, that's all fine, I'd want to do this correctly.

    4) HOWEVER, would 4 or ten year rule apply if someone wanted to go that way. I really don't think that person is me because life has taught me it is better without stress, but I am curious.

    Thanks all!

    C

    #2
    1. It would depend on what lease you sorted out with them and how repairs were split etc... Compensation would depend on the value of the property/gain. If the flat is worth £1million then it could be considerable but if it is worth £100k then a lot less so
    2. Normally you need to consult your free holder but again it would depend what your lease says as to what changes are allowed etc..
    2.5 Yes this would be a good idea
    3 You may also need planning permission - Building regs may also effect your current flat as this too will have to be brought up to current regs, if this is an old building this can be costly
    4 There are changes to this rule which may impact you. It is hard to see how you could keep it hidden in any case since you would need to apply for new council tax band etc...

    Comment


      #3
      You should look very carefully at the agreements between the freeholder and the leaseholders.

      You may need unanimous or majority consent from the freehold company to do this work, and you only have one out of two shares. This is always assuming that the loft space is demised to your flat. Even if this is the case, you may find that you would have to pay the freehold company for the uplift in the valuation of your space, on top of what the building work costs you.

      If you have just bought the freehold but haven't sorted out the lease yet, consult a solicitor NOW. I'd imagine that the same agreement applies as previously until you both agree to any changes, but you must check.

      Your neighbour wouldn't be happy at only having one share out of three, so might well block your proposal unless he is attracted by the thought of a big financial gain.

      Don't just assume that you'd get planning permission - in some areas planners have to take into account various considerations about density, traffic etc, and you ALWAYS need planning permission if alterations involve a flat. Of course you'd want to meet building regulations, as you say.

      Comment


        #4
        Thank you both so much!

        The downstairs owners are thinking seriously of selling very soon to move away. We are on good terms, but I don't want to pay them loads to use the attic space for even a loft conversion. I think we will not disagree when drawing up the new leases that the loft space is demised to me. I am pretty sure they don't want responsibility for the roof.

        Ok, so I'm thinking about what to do first?

        Ask them to sell the freehold to me. We paid 12k for it in total and estate agents say it probably puts 5-6 k on each flat. In general share of freehold makes a flat more attractive except to btl mortgage buyers, but flat is in postal london so btl investors are long gone.

        Question - as I am 50% of the building, do I have the right to buy the freehold before they sell if they say no? i'm thinking if this is the case then I can delay the new owners downstairs from buying it from me as is their right for a certain period (two years?) while i see whether I can split the flat into two?

        Then get planners / architects to take on the application for me?

        If i can't buy the other half of the freehold for whatever reason, then maybe the plan ends right there. There is no way I could pay the other freeholder up to 50% of the uplift as well as everything else I have to do and pay for. It's really a long term bet and the upfront costs would outweigh the benefit. UNLESS I can pit something in the lease that gives me the right to convert the loft space without veto from the other share of freehold lessee? Would that be possible?

        If the owners of downstairs are worried about their flat being less attractive to buyers without the share of freehold, would it be silly for me to say I'm still happy to buy the freehold if the lease is extended to 999 years with peppercorn rent? Such as, if my plan doesn't come off i'm left with the entire freehold because no one would want to buy it off me as it's worthless? If owning the entire freehold in this sort of situation a real nightmare for the novice?

        If i'm missing anything in my thinking and you are generous enough to share, please do.

        Comment


          #5
          Its a tricky one and would depend on what legal advise the other side took as in my experience solicitors can have different views which are quite often not correct. Them not having the freehold should not be a problem for them selling but the fact you then possibly have control of the building and could be unreasonable might worry some solicitors when advising on this. Normally a freeholder has to offer the leaseholders the freehold if they are selling but since yours is a shared freehold I do not think this is the case.

          The freehold may be a bit problematic as you would be taking on some responsibility but it would probably be worth it. I would just speak to the owners and explain what you are planning and ask if they would object. It may be an advantage as they then split building costs such as the roof three ways, at least that would be my selling point to them

          I think trying to buy this hiding what you are doing would worry a lot of solicitors and clients

          Comment


            #6
            As the other flat is selling I would offer to buy the freehold from them now. Offer more than it is worth and hopefully they will be a bit naive and 'bite your hand off' at such s good price.

            Comment

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