Inherited Freehold situation

by Readers Question

13:12 PM, 26th January 2016
About 4 years ago

Inherited Freehold situation

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Inherited Freehold situation

I have inherited a situation I don’t fully understand and wonder if anyone can clarify how things should work please. I am not familiar with running a company and all that entails.novice

I own 3 leasehold flats in a block of 4. There is a Ltd management company that owns the Freehold and I own all 4 shares in this company. There is a bank account in this companies name into which the maintenance charge is paid. The leases don’t allow for a sinking fund. The owner of flat 4 wants to renew his lease. The lease has been valued and we are about to agree a price for a 90 yr extension. If lease no. 4 is extended and updated and I extend and update my 3 leases (and get a better LTV) what becomes of the freehold?

If I need to sell a/the flat(s) and the residual value is consolidated by some unscrupulous mortgage company, maybe it would be better not to extend my 3 leases so that the value would sit outside the value of my flats?

Is this the best structure to manage the flats or can it be done another way without having to run a company and dedicated bank account? Can I charge a service charge for the work I put in?

Any advice/comments/possible pitfalls would be greatly appreciated.

Sam



Comments

Puzzler

19:19 PM, 7th February 2016
About 4 years ago

How long is the lease now? And what value is the flat? Is it in London?

sam bond

18:40 PM, 12th February 2016
About 4 years ago

The lease has 81 years to run. I had the lease valued and so did the tenant. We've agreed a price in the middle of the 2 valuations. The flat is a modest one on the south coast.

sam bond

8:28 AM, 13th February 2016
About 4 years ago

Reply to the comment left by "sam bond" at "12/02/2016 - 18:40":

I am not sure why the freehold is held in a company with its own bank account. Can anyone tell me the advantages/disadvantages please. My properties are held personally (if only I'd had a crystal ball!)

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