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  • Hi all,

    Need a little bit of advice.

    I have a JV on a semi detached house, divided into 2 flats. We own both the leasehold interests, however we have very large and unpopular FH, well known nationally!!

    The property is well maintained but the insurance is probably the worst part. £495 per flat, which is more than twice what it should be, Service charge and GR isn't too bad to be fair.

    Clearly Lease extension alone wouldn't solve the issue, although maybe if we go via the RTM route. We don't currently have the finances to buy out the Freehold, so would it be worth to exercise our RTM, cut costs and then make the FH less likely to cause problems when we try and purchase the FH later, or do we hold tight and go straight for the FH.

    Thanks very much

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    Hi,

    I would go for the management now if you can to save on the insurance costs then potentially buy the FH later if you are able to.  The RTM process takes about 6 months and is fairly reasonable on costs.  The main difference between RTM and buying the freehold is that with RTM you won't be able to collect ground rent or forfeit any of the Leases.

    Please contact me if you require further assistance - lam@anthonygold.co.uk


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    I wouldn't go for freehold until reform has been set by the government - it may be cheaper for you in a couple of years time. Complete the Law Commissions consultation and spread the word, the more that complete this, the more hope we have. 

    Right to Manage Consultation by the Law Commission, at the request of the government. 

    https://www.lawcom.gov.uk/project/right-to-manage/

    Consultation Paper

    The right to manage (“RTM”) was introduced to give leaseholders control over the management of their buildings.

    What’s the problem?

    Stakeholders have told us about numerous problems with the existing law, including:

    • restrictive criteria, such as the inability of an RTM company to manage multiple blocks on an estate, the exclusion of premises with more than 25% non-residential space, and the exclusion of leasehold houses;
    • seemingly small errors by leaseholders leading to lengthy and costly technical arguments about whether the process has been carried out correctly;
    • uncertainty as to the extent of the obligations that transfer to an RTM company, particularly in relation property such as gardens and carparks which is shared with other buildings; and
    • the RTM company bearing the landlord’s costs in the leadup to acquisition (including litigation costs in some circumstances).

    In addition to that, (not in place of, as we can't ignore the consultations otherwise they'll make decisions without our input) we're also hoping to abolish leasehold. https://petition.parliament.uk/petitions/238071 5,431 signatures in 48 hours – which shows the importance of this cause. Halfway to the government having to address it in parliament.

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