How to create a separate leasehold?

How to create a separate leasehold?

10:35 AM, 21st April 2023, About 10 months ago 6

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Hi, I own a ground floor flat that is mortgage free, along with the freehold of the building. The upper flat is owner occupied.

The deeds state a peppercorn rent of £10pa from the upper flat to me, and a 999 yr lease was created in 1990 by the elderly owner.

We share specific repair and maintenance costs defined very fully in the deeds. The upper flat wanted to sell but hit a problem with me owning the freehold (which may also affect me if I ever sell) and the way it was all drawn up.

I was going to transfer the freehold into my name and that of my son or just my son but received this text from the prospective purchaser of the upper flat (who I know).

I am trying to be fair to everyone, including me: “Thanks, our solicitor said that the freeholder (me) would need to set up a separate company and have the company issue the lease to the owner of the ground floor flat (me) as they were not comfortable with the existing freeholder issuing a lease to themselves”.

So, they want me to go through all the work and costs of creating a company, lodging it with Companies House by the sounds of it?

Seems a long winded way of doing things other than me just transferring the freehold to my son?

Any advice would be welcome as I am not a legal beagle.

Thank you,


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Graham Bowcock

11:35 AM, 21st April 2023, About 10 months ago

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.


12:28 PM, 21st April 2023, About 10 months ago

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.


20:18 PM, 23rd April 2023, About 10 months ago

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.

Freda Blogs

23:05 PM, 23rd April 2023, About 10 months ago

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.


8:34 AM, 24th April 2023, About 10 months ago

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


8:42 AM, 24th April 2023, About 10 months ago

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.

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