What Is A Share Of Freehold Flat?

When buying a share of freehold flat, you have some outright ownership over the property and its land. This ownership is shared with other people, possibly other leaseholders, hence why it is referred to as a ‘share’. 

Having ownership rights grants you more control over how the block of flats is run. This, in a way, makes you your own landlord (or one of your landlords anyway). 

Key Features A Share Of Freehold Flat

To better understand what a share of freehold flat is, there are a number of key features we need to identify. These features host a wealth of benefits and opportunities. 

We should point out that though these benefits do at first sound appealing, you should take your responsibility as a partial owner seriously. Share of freehold flat owners only reap the benefits of their situation if they are willing to engage with other co-owners. If not, a share of freehold may become challenging (but we will get to that later).

Benefits to consider are:

Dual Ownership 

  • Leasehold Interest: If you’re in possession of leasehold interest for your personal flat, then you have the right to live in the property for a long-term period, which is usually specified as 99 or 125 years. A long-term lease can markedly increase the value of your property.
  • Freehold Share: You own a share of the freehold of the entire flat block, complex or building. This grants you influence on how it is managed, alongside other flat owners or companies who share the freehold.

Lease Extension

  • Ease And Cost: Being granted a leasehold extension can be a costly, timely and complicated process. To indicate how much you might expect to spend on a leasehold extension, you can use this online calculator. When you have a share of the freehold, this process is not only simpler but will cost very little or even nothing at all. 

Control Over Management

  • Decision-Making Power: Having a share of freehold flat means you can have a say in the management decisions for your building. This could include charges to tenants, events, repairs, investment opportunities and general upkeep.
  • Better Maintenance: Involving flat owners in the leadership of an apartment building will generally lead to better maintenance services. This is because they all have a vested interest in finding quick, long-term solutions. 
  • Be Your Own Landlord: As opposed to the decisions for the building coming from an unscrupulous landlord, you are in the driver’s seat. Whilst this does mean that you and the other shared owner(s) must be accountable, you do not need to rely on a separate party. 

Value And Marketability

  • Market Interest: Share of Freehold flats are generally seen as more desirable to prospective buyers, because of the perks associated with control over building management and potential saving opportunities. 
  • Easier To Sell: Due to their desirability, a share of freehold flat is easier to sell, meaning it won’t be sat on the market for extended periods, which can lead to loss of profit and interruptions to moving timelines.

Shared Responsibility 

  • Cooperation: Parties who own a share in the freehold must work together to manage the building. This means that the responsibility does not entirely fall on one person. 
  • Collective Decision Making: Shared responsibility also means that decisions made to impact the building are made collectively. Inputs and compromises are made as a group, which usually ends up as the best outcome for all. This approach to building management is generally considered better for the tenants.

Legal Rights 

  • Security Of Tenure: By owning a share of the freehold, you can have a greater sense of security in your tenancy, as you have more control over your living circumstances than a traditional leasehold ownership would. 
  • Dispute Resolution: Anyone who possesses a share of the freehold has a joint interest in shared, productive management. This means that any disputes are usually resolved in an amicable and swift fashion. 

Potential Challenges

Further to your understanding of what is a share of freehold flat, there are also some potential challenges to consider. 

Whilst we would like to think working as a collective will always be harmonious… We know all too well that this is not always the case. Some examples of potential challenges are: 

Maintenance Disputes 

Much like any situation wherein responsibility is shared, there can be disagreements over who is in charge of what. At home, you’re probably used to rows about who takes the bins out, who’s doing the dishes etc. 

In this case, there are often disputes over who is responsible for covering the cost of necessary maintenance works, who oversees getting repairs actioned, what is a priority and so on. Such disagreements can lead to a breakdown in communication and can have a knock-on effect on how future issues are managed. 

Renovation Conflicts 

Differences in opinion may arise over alterations or renovations to the properties shared shared-spaced or individual flats. This is because what one freehold share owner sees as a good investment, another may see differently.

As a share of freehold owner, you must strike a balance between personal preference and the collective interest of the building’s tenants. 

Financial Tensions

It is rare that every co-owner is in the exact same financial position. Managing finances fairly and in a way that suits everyone can be hard to manage in any circumstance. 

Where financial tensions arise, there may also be disagreements regarding appropriate insurance plans. Again, this should be a collective responsibility, but it is common for disputes to arise over the named insurer, coverage limits and premium payments

Emergency Response Planning 

In any case, it is wise to have an action plan in place should an emergency occur.

Should structural damage or a burst pipe threaten the building, it’d be the worst possible time for co-owners to not be on the same page. In these circumstances, immediate action is required. Nonetheless, when under high pressure, mutual agreements tend to be harder to achieve. 

Guidance From Blacks Legal

We hope you now have a better understanding of what is a share of freehold flat.

At Blacks Legal, our team of residential property solicitors have 30 years of experience and have truly seen it all. We have the expertise to swiftly deal with whatever your issue might be. 

If you seek qualified and thorough legal advice, please get in touch today. Our dedicated team will endeavour to get back to you as soon as possible.