What to do before selling your share of freehold flat
If you own a share of the freehold in a flat, you should make the most of this marketing opportunity. A share of freehold will usually increase the selling price of a leasehold flat.
What type of 'Share of Freehold' do you own?
The phrase 'share of the freehold' can cover various legal situations. You should first find out which type of ownership applies to your property. You should also note whether there is a Right to Manage (RTM) company in place.
The RTM company may mean that you do not technically own a share of the freehold directly. The 2 main types of ownership are:
- Joint ownership - You may be registered as an owner of the freehold title jointly with other flat owners in the block. This situation only arises when there are no more than four flats in the building. Legally, no more than four people can be registered as joint proprietors of a freehold title.
- Company ownership - Alternatively, you may be a member of a company that owns the freehold of the building. Some or all of the other flat-owners may also be members of this company.
If you were told that the flat included a share of the freehold when you purchased the property, review the paperwork you received from your solicitor at the time.
Alternatively, you can go back to the solicitor you used and ask for further information. Perhaps you acquired a share in the freehold as part of a collective enfranchisement application by yourself and other flat-owners under the Leasehold Reform Housing and Urban Development Act.
What to do as soon as you go on the market (or preferably before)
Confirm your property's title with a solicitor
It is worth asking your solicitor to check the type of ownership you have in the property. If you do own a share of the freehold, tell your estate agent. Both you and your agent will be better placed to deal with any enquiries raised by potential buyers.
Contact the other registered owners
If you are one of the registered owners of the freehold, there will be a formal deed to transfer ownership. This deed transfers ownership from all the existing owners (including yourself) to your buyer and the remaining existing owners.
The buyer's solicitor will then have to submit the transfer deed for registration at HM Land Registry. Your own solicitor will prepare the transfer deed which will be sent the deed to all the other co-owners to sign prior to completion.
Your solicitor cannot complete the sale until the deed is signed by all owners. If an owner cannot easily be contacted, delays will arise. You should therefore notify the other owners that you are selling your property and explain that they will need to sign the transfer deed.
If other flat-owners are not resident (e.g. they rent out the flat), they may be difficult to contact. The "owner" may be anything from a foreign company to the deceased. The earlier you establish contact with the other owners, the better.
Find your share or membership certificate
As a shareholder of the company which owns the freehold, you should have a 'share certificate' or 'membership certificate'. (The exact type of certificate depends on the legal status of the company.)
Try to find this certificate. You may need to hand this over to the buyer on completion. If you don't have it, check with the solicitor who acted for you when you bought the property.
Get the company secretary's details
The solicitor will need to contact the company to register the buyer as a new member. The solicitor must also remove your name from the membership register. This will involve contacting the company secretary or whoever else handles these registrations.
It will save time later if you can find out the name and address of the person to contact. The company secretary will probably be one of the other flat-owners. If you don't know the secretary's details, you can check the Companies House register. You may have taken on the company secretary role yourself. If so you will have all the relevant information you need. You will also need to resign when the sale is completed.
Get the RTM company details (if applicable)
Similar arrangements for transferring company membership will also apply when there is an RTM company.
When is it best to speak to a solicitor
Contacting a solicitor before putting the property on the market is always advisable. Your solicitor can then check details of the freehold and leasehold titles. They can also give you the property information forms that you will need to complete.
Most solicitors work on a no sale, no fee basis. It costs the same to instruct a solicitor whether you do so early or at the last minute. So get a solicitor working for you ASAP if you can.
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