UK Housebuilding discussion

[Thirteen]

Leasehold is not a major issue if the leaseholders jointly own the freehold. That's how it works in our flats so we can't get screwed by the freeholder for excessive charges as we decide the charges. The monthly charge is £60 including insurance.

I've seen share of freehold being advertised for flats, does that mean any changes or costs have to agreed by the others who own the other shares?

 

[zwk500]

I've seen share of freehold being advertised for flats, does that mean any changes or costs have to agreed by the others who own the other shares?

It will depend on the terms of the contract.

 

[Snow1964]

I've seen share of freehold being advertised for flats, does that mean any changes or costs have to agreed by the others who own the other shares?

Depends on how it is set up, I lived in a brand new set of 4 small blocks in 1990s, being 40 flats there was a residents management committee that any resident could join which met every 3-4 months to decide.

Tends to be difficult if only have a handful of flats and everyone has to agree because one absent or difficult owner blocks the majority, even when work to fix something is required. These 100% must agree are the problem ones.

 

[E27007]

Depends on how it is set up, I lived in a brand new set of 4 small blocks in 1990s, being 40 flats there was a residents management committee that any resident could join which met every 3-4 months to decide.

Tends to be difficult if only have a handful of flats and everyone has to agree because one absent or difficult owner blocks the majority, even when work to fix something is required. These 100% must agree are the problem ones.

A friend had a modern apartment of 16 leasehold tenancies , the windows were cheap wooden frames which rotted away, trying to organise 16 people to agree upon and provide the money for the new windows took several years.
Another friend in a 1990s leasehold apartment block, one tenant defaulted on the mortgage and was evicted, on eviction it was found the tenant had stripped the property of all fixtures and fittings, the property was a near-shell, under the terms of the lease, the cost of reinstating the apartment was the responsibilty of the leaseholders, the bill was not small. Steer clear of leasehold!

 

[johncrossley]

Steer clear of leasehold!

Depending on the area, it might cost £200,000 more to go freehold. I'd rather take the risk of an unexpected bill.

 

[E27007]

Depends on how it is set up, I lived in a brand new set of 4 small blocks in 1990s, being 40 flats there was a residents management committee that any resident could join which met every 3-4 months to decide.

Tends to be difficult if only have a handful of flats and everyone has to agree because one absent or difficult owner blocks the majority, even when work to fix something is required. These 100% must agree are the problem ones.

I was on the management committee of 33 leasehold flats, one of my worst decisions, there is always the "can't pay won't pay brigade " to foul up the accounts, even though the management company were working for nothing to save paying fees to a professional management company, and, was the first port of call for anything however trivial " the light bulb needs changing " from the other residents. Hint, show some initiative, change the lightbulb by yourself.

 

[maniacmartin]

I totally relate to E27007. My previous flat was a leasehold where the leaseholders had previously brought out the freehold (26 flats). We had no management company - instead the leaseholders did all of the work ourselves.

At first it was great - £1/day service charge and we had a big sinking fund. One person did the accounts, one person dealt with the paperwork of flat sales, one person maintained the gardens, one cleaned the communal area, one cleaned the gutters and painted the exterior fascias and doorframes etc. This worked well as a lot of the leaseholders were retired professionals with the right skills and a lot of free time and it had a nice really community feel.

Then some of the long-standing residents moved away and sold their flats to buy-to-let landlords. Landlords and their tenants never showed up to any meetings, never really engaged with emails and of course they and their tenants never pitched in to do any of these chores. We had some flats with multi-year debts on their service charges. More work fell on handful of people remaining. By the time I sold up one person was basically doing everything, all for free, except gardening and cleaning communal areas which we contracted out. I wouldn't be surprised if they've engaged an external management company to manage the whole block now so this guy can finally enjoy his retirement in peace.

This structure is practically the same as a commonhold. It sounds good in theory, but it relies on everyone pitching in. If your neighbours can't be bothered, it just doesn't work. Even the paperwork can be a huge workload and legal liability (directors' insurance, building insurance, fire safety reports, electrical safety, dealing with conveyancors every time someone in the block sells up, accounts, meeting minutes, flammable cladding reports etc, as well as liasing as the middleman between leaseholders, their tenants, insurers and tradesmen whenever a leak from one flat causes water damage below), so why not pay someone else to handle it.

 

[E27007]

I totally relate to E27007. My previous flat was a leasehold where the leaseholders had previously brought out the freehold (26 flats). We had no management company - instead the leaseholders did all of the work ourselves.

At first it was great - £1/day service charge and we had a big sinking fund. One person did the accounts, one person dealt with the paperwork of flat sales, one person maintained the gardens, one cleaned the communal area, one cleaned the gutters and painted the exterior fascias and doorframes etc. This worked well as a lot of the leaseholders were retired professionals with the right skills and a lot of free time and it had a nice really community feel.

Then some of the long-standing residents moved away and sold their flats to buy-to-let landlords. Landlords and their tenants never showed up to any meetings, never really engaged with emails and of course they and their tenants never pitched in to do any of these chores. We had some flats with multi-year debts on their service charges. More work fell on handful of people remaining. By the time I sold up one person was basically doing everything, all for free, except gardening and cleaning communal areas which we contracted out. I wouldn't be surprised if they've engaged an external management company to manage the whole block now so this guy can finally enjoy his retirement in peace.

This structure is practically the same as a commonhold. It sounds good in theory, but it relies on everyone pitching in. If your neighbours can't be bothered, it just doesn't work. Even the paperwork can be a huge workload and legal liability (directors' insurance, building insurance, fire safety reports, electrical safety, dealing with conveyancors every time someone in the block sells up, accounts, meeting minutes, flammable cladding reports etc, as well as liasing as the middleman between leaseholders, their tenants, insurers and tradesmen whenever a leak from one flat causes water damage below), so why not pay someone else to handle it.

Another aspect to a leasehold property, is the terms of the lease can follow you long after you have sold on, when you sell onwards, the buyer is making a legal covenant to you the seller, to continue to satisfy the requirements of the freeholder as per the lease. If the buyer fails to honour the covenant, you may be under the spotlight, such failures very rarely arise, but cannot be ignored, the advice was given to me by the Solicitor who handled my property sale.
I am not aware of the same issue with selling a freehold property