Finance to buy freehold for residents management company?
8:11 AM, 5th June 2019, 7 years ago
2
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I own 1 of 7 leasehold flats, there is a leaseholder controlled management company between the leaseholders and the freeholder.
The freeholder has offered to sell the freehold to the leaseholders, 3 of the 7 have already extended their leases, the other 4 will need to at some point.
Is it possible for the management company to borrow the money (approx £35k) to finance the purchase of the freehold on behalf of all the leaseholders?
Many thanks
Tom
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AST's signed on line - how do you make that work?
Member Since November 2018 - Comments: 29
2:14 PM, 6th June 2019, About 7 years ago
Who’s name is is it going in? If seven owners, then what if one defaults? There’s a number of issues with lending on this basis which may not work. I have not heard of lender who would lend against a group of owners buying their freehold. Perhaps each one should see if they can raise £5k each, or approach their own lender to have an extended mortgage amount to buy the freehold. Some lenders would be be accommodating given this will strengthen their interest in the property from leasehold to freehold.
Member Since July 2013 - Comments: 1264 - Articles: 1
3:34 PM, 8th June 2019, About 7 years ago
I think the OP means to buy it in the name of the company so individuals are irrelevant. You need specialist advice on this. One development I know, those that could, chipped in and as the other flats were sold their share was paid by the purchaser into the company funds. Those with extended leases will be less motivated to join in as presumably they have already paid for the extension. This is a small block so £35K seems high, how long are the original leases?