Buying the freehold: What’s involved?

Buying the freehold: What’s involved?

9:25 AM, 29th August 2017, About 7 years ago 9

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The freeholder of my BTL flat is selling the freehold to me. It is going through now but I would like to know what my responsibilities and roles are as well as the advantages and disadvantages. I have emailed my solicitor twice regarding this but no response.

I contacted RLA who directed me to Leasehold Advisory Service. I have a telephone appointment with the Leasehold Advisory service, which is 15 minutes long in September but wonder if anyone here can advise what I actually need to do as a freeholder of two flats in a Victorian building with 999 leases paying service charges and ground rent to a freeholder. The only thing I know about is the insurance for the whole building.

As the new freeholder do I pay service charges to myself? I’ve looked around the Leasehold Advisory Service website but my particular circumstances does not seem to apply as its only two flats.

It’s probably too late now to get another solicitor and he has dealt with all my other properties OK but it’s been nearly a year since it was offered to me!

Any advice?



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Mark Alexander - Founder of Property118

9:29 AM, 29th August 2017, About 7 years ago

Hi Barry

There's a completely different set of rules and regulations to follow. I purchased a freehold once and immediately contracted the management of it out.

Your solicitor should also be advising you that you cannot be the freeholder and the leaseholder. I have to set up a company to own the freehold I purchased.

There are a few Property118 regulars who specialise in this, hopefully they will offer to help you.

Bridget Price

10:44 AM, 29th August 2017, About 7 years ago

The Leasehold Advisory Service is very good and will give you correct advice. I have been dealing with them in regards to forming a Right to Manage Company to take over the management from a Housing Association and now to buying the freehold of the block of 8 flats where I own one, under Collective Enfranchisement. You can see the links to the legislation on their very good web site for background reading.

Fed Up Landlord

11:41 AM, 29th August 2017, About 7 years ago

Hi Barry,

Mark is correct. There are a whole load of rules and regulations when you become a freeholder. If you fail to serve documentation in the correct manner ( including the font size!!) at the correct times then you cannot receive ground rent or service charges. If you are spending any amount in excess of £250 per flat you have to consult on the work otherwise - guess what- you cannot claim it back in the service charge. My advice is to contract this out unless you want to take a crash course in block management and spend hours poring over the Landlord and Tenant Act 1985 ( such an interesting read Choose a reputable agent who will work with you in the early days to set it up right.

Berry Gayle

13:11 PM, 29th August 2017, About 7 years ago

Thanks for all your responses. You are correct in that I will be the leaseholder and freeholder. I did wonder who I will pay the services charges and ground rent to. Will I pay myself?

I certainly don't want to spend my time in block management but it is only two flats in one house so not overly onerous. So maybe.

My main concern is the collecting the service charges and ground rent from the other leaseholder, and collecting it from myself, what do I do with it, where do I keep the money, how to do the accounts and so on. Setting up a company for two flats - is that needed/the best thing to do/feasible? Still waiting from my solicitor! Choosing an agent - is that a letting agent or another type of agent?
Many thanks for responses.


17:22 PM, 29th August 2017, About 7 years ago

Who owns the second flat? Did they decline to share in the purchase? It would be better if each had half. If they were not offered it then you and the vendor are breaking the law.

There are extensive legal obligations and you may find it difficult to find an agent who will take on such a small property. You will have to register client money protection, public liability and data protection - not worth your while as you can't claim any of that back.

Email me

Kevin McLandlord

21:05 PM, 29th August 2017, About 7 years ago

Does the same apply for leasehold purchases of houses?

David Atkins

23:30 PM, 29th August 2017, About 7 years ago

Reply to the comment left by Bridget Price at 29/08/2017 - 10:44
You'll have to let us know how you get on battling the HA.

David Atkins

23:32 PM, 29th August 2017, About 7 years ago

Reply to the comment left by Kevin McLandlord at 29/08/2017 - 21:05
Slightly different, you can have the freehold and leasehold on a single dwelling in the same name. You really need a ltd company for flats.


18:33 PM, 30th August 2017, About 7 years ago

No, you don't need a limited company and for two flats it would be very onerous. You just need the titles not to be identical. You could buy the freehold jointly with someone else (partner?). IMHO, the best option would be to come to an arrangement with the owner of the other flat. There is not much value in a freehold on a lease of 999 years and you would get all the hassle. It sounds great at first sight to have the freehold but in your case I can't see much advantage to you. If the other owner cannot afford to buy it (it should not really be very expensive for such a long lease) there are arrangements that can be made, e.g. you buy it on behalf of both of you and then when s/he can or when the other flat is sold you get their half paid. I think you need a specialist solicitor. Whereabouts are you?

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