No confidence in legal advice from property experts?

No confidence in legal advice from property experts?

15:06 PM, 8th April 2021, About 4 months ago 3

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I own the freehold of a property consisting of two self-contained flats. I bought it at auction. There is no other title and there are no common areas in the property. I live in one flat and rent out the other.

I have considered selling the property, but have been told that I couldn’t sell the freehold that I own and would have to create two leases and sell them separately.

In other words, I couldn’t sell exactly what I bought. This doesn’t make sense to me. I have spent a great deal on legal advice from property experts, but I don’t have confidence in their opinions.

Are they right?

Alex



Comments

by DGM

23:07 PM, 8th April 2021, About 4 months ago

They are incorrect, you can sell the whole freehold property consisting of the two flats. You cannot sell one and keep the other without setting up a lease or you can sell with part of the freehold. The usual route is create a leas for each property if you are looking to sell and keep the overall Freehold, which has a value and you can sell on. I am sure there are proper legal people on here that will advise.

by Ian Narbeth

11:32 AM, 9th April 2021, About 4 months ago

Hi Alex. I am a "proper legal" person, a commercial property solicitor of 35 years. I don't know who has spoken to you. You can sell the freehold (as is) to someone who wants two self-contained flats. It may not be straightforward for the buyer to get a mortgage as lenders prefer "simple" arrangements: they would potentially have to split the title to realise their security and that is a hassle and disproportionately costly. Even if the buyer is a cash buyer he/she will anticipate the same problem on a future sale.

DGM is correct about creating separate leases. However, you cannot grant a lease to yourself but if you alone own the freehold, you could grant leases of the flats to yourself and your partner. You need to consider tax implications and principal private residence exemptions and such-like. Suggest you employ a solicitor.

by Richard P

0:58 AM, 10th April 2021, About 4 months ago

I agree with the above 2 comments, you need work out what would be your best return, sell the flats individually creating new leases as you sell o taking into account the cost of creating the leases is the return going to be that much greater, if it is sell flats individually and keep the freehold to sell later if you wished

I am not a solicitor but have found myself in your position once and quickly learnt in not being able to create a lease to myself, so had to put freehold into Ltd Co and separate the flats the building was bigger so it was worth the effort

You should add some value by selling individual flats , but everything depends where the properties are if it worth it or not


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