How to buy share of freehold
Conveyancing clients and particularly first time buyers often get confused when they are interested in buying a property which is a share of freehold property, especially as this may be specifically marketed heavily the freehold aspect by estate agents.
Buying a flat with a share of freehold | Kenneth Elliott & Rowe Solicitors
The concept is actually quite simple and where a share of the freehold comes with a flat, it is generally beneficial. Buying a flat is buying the leasehold interest.
You may also get a share of the freehold. There will be 2 separate titles to the property, 1 leasehold and 1 freehold.
In the situation above, the leaseholders may have set up a company and each flat owner will own a share in the company which is the registered owner of the freehold. Where there are only a few flats, in a converted house perhaps, the freehold may be owned by the individuals leaseholders and not by a company. To recap, the long lease interest is separate from the freehold.
How can I buy the freehold of my building? - The Leasehold Advisory Service
It is the long lease interest which is far more valuable than a share of the freehold title. There are advantages in buying a flat with share of freehold.
Mortgages and homes guide: Leasehold vs freehold - right to buy | This is Money
The main advantage is that it is common, where leaseholders all have leases which start running down to years left, to agree that all the leases will be extended at no cost. The other main advantage is that the leaseholders fully control the building and are not reliant on a freeholder who does not care about the building, whose freehold is worth only a small amount, dealing with important issues like buildings insurance, maintenance of the structure and so on.
It is not unusual for these issues, or a freeholder who has gone away or disappeared, to cause major issues when buying or selling a property or generally. If you are considering buying a share of freehold property, get in touch with me to discuss any issues or concerns or for a quote for the legal work involved.