How to create a separate leasehold?

In general there shouldn’t be an issue with the set up you have described. It’s quite common for the owner of one (or more flats) to be the freeholder and for others to the occupy on a long leasehold basis. We manage such properties for clients.

It sounds like there may be an issue with some of your documentation, in which case you’d need to take it to a property lawyer for advice.

You, as freeholder, have not issued a lease to yourself (I hope); you own the freehold and have issued (or your predecessors did) a lease to somebody else. If the documentation is correct you don’t need a lease for each property.

Took a while to understand this but I think the poster wants to transfer just the freehold. You can do this as you say but you would need to issue a lease for your flat, as it is otherwise on the same title. You don’t need a company. Why this would affect the upper flat is not clear. You don’t need to do this for them to sell.

If there is only one lease granted you can transfer the reversionary interest without going through a Section V procedure (under the Landlord & Tenant Act 1987). Probably better to stick the freehold in a limited company than letting your son to be potentially burdened with the onerous liability that it can potentially become. Easier subsequently to transfer the shares in the company than to convey the freehold.

I would not be relying on a text from the neighbour – either proceed to arrange the transaction in the manner you have described/ been advised or, if the neighbour wants something different, ask them to provide a copy of their solicitor’s written advice and its legal premise.

Otherwise you could end up pursuing a more lengthy and expensive transaction without good reason or justification.

Reply to the comment left by Trevor Leigh at 23/04/2023 – 20:18
Being a limited company will not prevent the son having responsibility as that depends who owns the shares in the company, likely to be the poster and eventually his son. If you mean have an agent then not many will take on such a small block

As stated above the text is completely wrong and you should be asking your solicitor. The only thing I can think of is that the purchaser of the other flat is trying to get a share of the freehold (maybe for free?). And that is another issue which you may or may not want to consider. You should get a premium for that depending on the lease length and they should pay your costs.

Seriously go back to your solicitor and see if they have heard this from the other solicitor. A text between you and the purchaser is just that.