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 - if any?
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. Or 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.
Recommended reading: Find out how to avoid the traps when comparing conveyancing quotes.
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 can confirm to the selling agents that you do own a share of the freehold. You will also 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 must 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 the Land Registry. Your own solicitor will prepare the Transfer deed. However, the solicitor will need to send the deed to all the other flat-owners to sign prior to completion.
Your solicitor cannot complete the sale until they resolve this. If an owner cannot easily be contacted, delays will arise. It can therefore help if you notify other flat-owners of this process beforehand.
If other flat-owners are not resident (e.g. they rent out the flat), it can be difficult to get in touch with them. The "owner" may be anything from long-deceased to a foreign company that has bought the flat as an investment. The earlier the contact process is started, the better.
Find your share or membership certificate
As a member of the Company which owns the freehold, you should have a share certificate or membership certificate. (The exact type of certificate depends upon 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 when you bought.
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 can't easily find out this information then your solicitor can make further enquiries. (Of course, you may have taken on the Company Secretary job 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 a 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.