Problems selling a Freehold flat with own management company

Hi Jacqueline. This seems to be becoming a real problem with flat owners who share the freehold without any leases. Most conveyancing solicitors (or any lawyers, to be fair) have little or no experience of it and so don't know what to do. How is the property registered at the Land Registry? Freehold, leasehold or commonhold? You can easily check for £4 on the LR website. That is the starting point of any dealings with title, and should determine what needs to be done to sell it. CK

You SHOULD have a lease with the freeholder, the freeholder being the management company that all the flat leaseholders own a share in. The purchaser’s solicitor should be telling the purchaser not to buy until such time as you correctly get leases into place.

Getting a mortgage without a formal lease will also be close to impossible for any buyer.

The solicitor that setup your management company etc, should have created the leases and registered them with the land register, if they did not do so, you may have a claim against them.

There are other types of joint ownership of block of flats possible, but a lease is the only option that most mortgage companies will understand.

Hi Jacqueline

Is your property in England/Wales or Scotland? There are quite different legal systems for ownership of flats in each country.

If it is in England/Wales then it most unlikely that your individual flat will have a freehold title. There are legal reasons for this which would take some time to explain, but there is a simpler pratical reason – it is virtually impossible to get a mortgage on a freehold flat. The only lenders who will normally accept such properties are the RBS and NatWest and even they have limitations.

Before you joined with the other flat owners to buy the freehold title I expect that you would each have had leasehold titles. Buying the freehold does not convert your leasehold flats to freehold. Instead the previous leases would just continue – although you could grant yourselves 999 year leases to replace them.

When you buy a flat it is the leasehold title that is important, so that is why the buyer's solicitors are asking questions about it. You may also be selling your share of the freehold title (or your share in the management company if the title is vested in the company) but that will be of marginal value to the buyer.

Your own solicitor or other conveyancer should easily be able to check on the situation with the Land Registry – freehold titles and leasehold titles are registered separately, and a search will show up all the titles relating to a particular property. (I hesitate to ask, but does your solicitor/conveyancer have much experience of dealing with this type of property? He or she should be able to explain things to you more fully.)

I understand that freehold flats are more common in Scotland, which is why RBS (and NatWest) are prepared to lend on them. But I know little about Scottish land law so can't help if your property is there.

Ha Tony, you've made most of my comments for me.

Jacqueline, where is the flat? In Scotland it is called feuhold but really means flats are all shared freehold without a separate entity for land and building as in England and Wales. If this was the case your problem would probably not have arisen so I expect you are not in Scotland.

I would like to know the sequence of events, as Tony says, who did you buy the freehold from? You would originally have had a lease with them and the solicitor for the purchaser should be able to get it from the Land Registry.

The only way I can think of where this might not be the case is if the four of you bought the land and built the flats yourselves and there have been no other owners. It's possible in a conversion for there to be no lease but normally there is only one owner.

For you to own only your flat, there must be a lease which is a contract between you and the freeholder assuming you bought the flat before the land. If not your conveyancer did not act for you properly in the purchase of the freehold.

It has been known for the Land Registry to lose them but at least one of your flats must have it! You should have it with your purchase documents so I suggest you (or one of the others) go back to your solicitor who should have retained a copy.

If there really is no lease, you will have to get one drafted.

I have units in a block of flats. There are 6 flats. Each flat is leasehold. Each flat has an equal share in the freehold. Four of the flat owners run the management company. There are no problems when selling.

The developer is usually the original freeholder and will have drafted a lease. Even on my Scottish flat there is a lease stating rules and regulations. It may be you have one and don't realise it is actually a lease.