Buyer’s blog: To buy or not to buy… the freehold of your property
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As the owner of a leasehold property the opportunity may arise for you to buy the freehold of your home. Guy Osborn, a partner in the Property Litigation department at Osbornes Solicitors LLP talks through the advantages and disadvantages to taking this action.
Once you acquire the freehold, full ownership of the building goes to the participating leaseholders, often through a company which has been formed especially for this purpose. This means that the participating leaseholders can select managing agents to look after the building or choose to self-manage if desired. By participating in this process you can make sure you get best value for money from your agents.
When the freehold of the property is acquired, however, the leases can be extended to 999 years and modernised where necessary - adding to the value and attractiveness of the flats in question to future prospective buyers.
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Managing a building is not an easy task as it comes with a raft of laws and regulations. For a leaseholder, taking on the role of a company director means familiarising themselves with the numerous duties and responsibilities the position entails.
Appointing a managing agent does not in itself absolve the participating leaseholders from responsibility. They now have to make sure the management company is doing its job properly and that they are still receiving value for money.
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As a leaseholder any disputes with other leaseholders could have been referred to the landlord or managing agent and left with them to resolve. As a co-freeholder you would have to deal with disputes face-to-face and this could become a source of tension.
Some of the flats in your building may be rented out and their owners may live either far away or even abroad. If these owners are participating in the buy-out it may not be an easy task to make sure documents are signed and money is produced on deadline. Such logistics may test your patience and organisation skills.
As you can see, there may be more disadvantages to buying the freehold of a property than appear on the surface. The good news is that none of them are insurmountable.
Working with trusted solicitors and valuers who have been through the process many times before can make the job far easier and much less fraught.
For more advice from Osbornes Solicitors, visit osbornes.net