What is the difference between freehold and leasehold?
When you purchase a lease, you are in reality paying for a long-term rental contract. Your landlord [technically, the freeholder] retains overall ownership – the freehold – and at the end of the lease, the leased property returns entirely to the landlord. Whilst the lease is running, the landlord has certain obligations including an obligation to maintain the property – but the tenant usually has to pay ground rent and a service charge.
Why should we take over management of our block of flats?
Many flat owners are frustrated by having to deal with a management company. Sadly a significant number of management companies provide poor quality work and maintenance – but still know how to charge. Poor maintenance is not only an eyesore but can affect the value of your flat – putting off prospective purchasers. Many tenants have successfully taken on management of their block of flats themselves – or have at least taken control by appointing management agents of their own choice. Savings can be quite significant. We can help you set up a Right to Manage Company to maintain your building.
Should I extend my lease – or leave things as they are?
While you may prefer avoiding the initial expense and time taken making an application for a lease extension, putting things off only makes it worse. The shorter a lease gets, the lower its value becomes and the more expensive it can be for the lease to be extended or to buy the freehold jointly.
If I join in buying the freehold can I sell my interest?
Do I need a professional valuation to buy the freehold?
Not necessarily – some landlords will agree a reasonable price for you to buy the freehold without the necessity of a formal valuation. However if you cannot reach agreement with your landlord, then a professional lease enfranchisement valuation by a surveyor will usually be necessary – both to increase your negotiating power with the landlord and as evidence in any application to the First Tier Tribunal (Property Chamber) – previously the Leasehold Valuation Tribunal or LVT.
If you do decide to buy the freehold and plan asking a surveyor to prepare a valuation, you need a specialist in lease extension and collective enfranchisement valuation. We can provide you with the name of an experienced enfranchisement surveyor local to you.
What happens if I don’t want to buy the freehold?
If you don’t join in with the other tenants in buying the freehold or exercising the right to manage, then your position remains roughly the same – the only difference is that you will pay any ground rent and service charge to those tenants who did buy the freehold as your new landlords – and they will be responsible for managing the property.
What happens if I don’t take part in the right to manage my block of flats?
Again your position will remain roughly the same – you will continue paying a management charge – but in future it will be to whoever has now exercised the right to manage the block of flats who will be responsible for management of the block .
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