A freehold simply means that you own the building and the land it was built on. When it comes to a building full of flats, the owner must offer the freehold to the leaseholders first if they want to sell. This means that all the leaseholders will own the building if they choose to buy and this can be a good or bad thing, depending on the group of people.
Pros of Owning a Freehold
You can eliminate the need to pay ground rent when you own the freehold to your flat. This means less money going out on a monthly basis.
With a freehold, the ownership of the building is split amongst the leaseholders who have chosen to participate in the purchase.
Usually, you’ll create a company specifically for this reason. If you currently dislike how the building is managed, you will find that having control over this can be very enlightening.
When you purchase a freehold, it also makes the property more attractive to mortgage lenders. This is a huge advantage to those interested in buying and selling. Keep in mind that the shorter your lease, the more you’ll need to pay for the freehold.
Cons of Owning a Freehold
In order to purchase the freehold for your building, you need to have at least half the leaseholders purchase the freehold. If some of them are not interested, this can prevent you from making the purchase.
Managing your building with a group of other people can be very difficult. It’s a complex situation and you’ll need to follow the necessary laws and regulations. It’s also tough to deal with other freeholders who are not in agreement with you on certain things. This can result in disputes that may turn rather ugly.
If someone is late paying, you also have the unpleasant task of trying to get them to pay while also keeping the peace with your neighbours. You will have to coordinate with all the people who are involved in the process and some will find that they no longer wish to participate at a later date. This can cause issues with trying to get the money together.
It’s a good idea to go into a freehold purchase with an experienced solicitor. They can help advise you and help you create the best possible situation for your needs. It’s also helpful to have a surveyor who can manage the valuation.
Considering purchasing a freehold? Contact Andrew Lee & Co. before you do anything further and we can help ensure it all goes smoothly for you.
Commentaires