Selling Freeholds - anyone know their stuff?

[benjaminty]

Hi All,

Looking for some advice.

Am looking to sell a Freehold I own and wondering firstly what my obligations are towards a Leaseholder - i.e. whether I am legally obliged to offer it to them before selling to someone else.

Also the value of the Freehold - I've been made an offer but have no idea as to whether it reflects market value or not. There are calculators on the internet but the offer was made on far less detail than is required in the calculators. How did they arrive at even the "ball park"?

[Siduhe]

Lease give some good basic advice for free on their site - in particular the attached (which is written for leaseholders wanting to enfranchise rather than freeholders wanting to sell, but the same principles apply).

http://www.lease-advice.org/publications/documents/document.asp?item=15

[womanofdulwich]

3 things

what is the value of hte flat on a long lease

what is the ground rent- and set increase to what and when.

how long is there left on the lease.

you do have to offer it to them under the 1987 act ( I think).

[SteveT]

Take it to auction, then they can bid for it like everyone else.

[dubluke]

SteveT Wrote:

-------------------------------------------------------

> Take it to auction, then they can bid for it like

> everyone else.

This, you'll get a good price this way

[louisiana]

There is a right of first refusal; terms must be the same (ie you can't sell it to 3rd party on more attractive - for them - terms)

[cate]

Just contact LEASE. They know the law.

[Carrie]

You need to offer it to the tenants even if you do take it to an auction - there is no way out of giving them first refusal. There are surveyors who specialise in freehold valuations (it is a complex calculation)- if the offer that you have been made was by way of a statutory notice you do have a time limit in which to respond and if you don't respond in time making a counter offer then the tenants offer is what you will get! You should therefore take advice quickly. LEASE are good,(and here comes the shameless plug) but you could always try giving my colleague a ring - Suzanne Day at Glazer Delmar solicitors (forum sponsors) - 020 7639 8801 ext 210 - as she specialises in enfranchisement and lease extensions.

[Jeremy]

Yes, you absolutely need to offer it to the tennents first! You should probably hire someone to do the valuation for you if you're not sure how it works.

It's not a massively complex process, but slightly more involved than womanofdulwich suggests. You need to incorporate a yield rate - which I believe will typically be calculated from other freehold sales in the local area.

[benjaminty]

Thanks Guys.

[womanofdulwich]

wod does this as a profession and the yield rate is usually 5% for flats ( deferred) and the yield on the ground rents is determined by the amount of the ground rent and how often it increases and by how much - 6-7 % is the usual range, but this will not have a huge impact on the value.

Try to get as much info off LEASE as you can. If you can answer the questions I asked and use the above info on yields you can probably see if the ball park is ok by using the LEASE calculator.