Buying the Freehold
Q: We have had several issues in the sale and purchase of 3 of the 14 flats in recent years due to having an absent landlord (dissolved company) and the freehold is held by the Crown.
1. As a result we wish to buy the freehold and all the owners are in agreement.
2. We have just had our AGM and some questions have arisen:
Is buying the Freehold actually to our benefit? What are the pros and cons?
3. How do we know if the landlord has disclaimed their interest in the freehold and what does this mean if they have or have not?
4. Are we correct in assuming that if we go ahead with the purchase of the freehold each owner of their flat has a freehold interest as opposed to a leasehold?
5. Somebody has raised the question that it is more difficult to get a mortgage on a freehold flat. Is this the case?
6. We are in the process of setting up an unincorporated residents association. Is this sufficient to apply to the Crown to buy the freehold? Our intention was to apply ourselves and not use a solicitor. Is this feasible?
FPRA Director Shula Rich replies:
1. This is possible and a good solution
2. You can either do this or Right to Manage. The second maybe less expensive. I suggest you ask the Crown what the cost will be? If the leases are less than 80 years they may give you a commercial valuation.
3. There is a standard procedure for buying the freehold which is on their web site. You can call them and ask if it’s been disclaimed.
4. No, each owner has both a share in the freehold and remains a leaseholder.
5. Incorrect. This will not be a freehold flat. It will be a flat with a share of freehold.
6.There is very detailed and clear advice on how to buy the freehold. If the price is prohibitive then I suggest you go for Right to Manage. You all need to act as soon as possible.
[Submitted June 2019]