SHARED FREEHOLD FLATS
What is shared freehold?
What are the advantages and pitfalls?
Have a look here to find out....
ARTICLES AND FAQS
Some of the things people ask and problems they have, with our comments and answers.
We have found that there are a lot of people out there who do not understand the concept of "Shared Freehold."
A Freehold Flat and a Shared Freehold Flat are NOT the same. The ability to sell or remortgage a flat will be affected by the way lenders view the legal details. A pure Freehold Flat where the freehold title is confined to that particular flat is generally not acceptable to lenders.
Unfortunately for the non-lawyer there are a number of possible factual situations involving flats and freeholds. However, we have to explain the other possible situations so that you can see whether the flat you are buying or selling is truly a "Shared Freehold" or in some other category.
Normally "Shared Freehold" means that although the flat is Leasehold, the Lessee, together with the other flat lessees, will directly or indirectly own or control the freehold of the building or development in question.
There is no outside Landlord making a profit out of the property but EACH FLAT IS STILL LEASEHOLD. The Leases have to stay to regulate the relationship between the ownership of the property as a whole and the ownership of each flat. For instance, there will need to be rules about who pays for items such as insurance and repairs.
People tend to see shared freehold as better than leasehold with an outside landlord. In an average case this may be true, but few cases are completely average! For more details see Shared Freehold Pros & Cons
Why the individual flats can't normally be freehold is explained on the Freehold Flats page. There are also situations (which are not the same and more generally acceptable):
- where you own a lease of your flat and also the freehold of the flat above or below (Crossover Leases), and
- where you only have the use and possession of one flat, which may or may not have a lease, but you also own the freehold of the whole building with one or more other flats in it on leases (Freehold subject to Leases)
The "Shared Freehold" can be owned by:
- A company in turn owned by the individual flat lessee, often called a Residents' Management Company;
- The individual flat lessees who literally jointly own the freehold title ; or
- Some or all of the flat lessees acting as trustees of a trust set up to regulate the ownership.
Where there are more than 4 flats involved you will nearly always find that it is a company that owns the freehold, but with smaller developments and conversions, the joint ownership, where there is literally a shared freehold is more common. Trusts are rarer.
Mortgages - Read this BEFORE you apply for a mortgage on a "shared freehold" flat or any flat which you have been told is freehold or where you will have some involvement with the freehold.
Copyright: Richard Webster & Co 2010
Richard Webster & Co 30 Leigh Road Eastleigh Hampshire SO50 9DT
Conveyancing Solicitors for Shared Freehold Flats.
Page Last Revised 14/02/11