Buy your freehold - step-by-step guide

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Consider Granting New 999 Year Leases

Granting new 999 year leases may be strategically incorporated into the Freehold purchase if there are reasons why you would want everyone at the site to have new leases, ie, if principal terms need varying, for example,

(a) if there is no interest clause (no incentive to pay service charge promptly), or
(b) if the lease does not provide for collecting service charges in advance (based on a budget, ie, service charge expenditure can only be recovered after the event, and even then perhaps only after a formal audit.

Leases can be varied simply by a deed of variation perhaps varying 2 key clauses

(a) to replace the schedule of ground rents payable to fix the ground rent at a peppercorn,
(b) to vary the term and increasing it by a term of years.

If more fundamental changes are require a complete modern lease could be substituted.

It should be noted in law that a lease variation of substitution cannot be forced on a party it has to be mutually consented to. However, if the resolution to grant new leases on x, y, z terms is approved by a Board of Directors it is only this type of lease/deed of variation that is available, until an alternative is approved.

A freehold shareholder cannot be forced to take this type of lease/varied lease and would be bound by the original lease until such time as they chose to participate. A clear incentive would be the ground rent reduction to a peppercorn.

Going Forwards
Other considerations when we become freehold shareholders.

Once the Freehold is acquired, you may require further assistance with building works, legal aspects, company formation, company constitutional issues and/or the day-to-day management of the property.

Ringley can help, to find out more visit the following links:

Building Engineering Department
Legal Team
Estates Management Team
Self Managed Support Unit

With considerable experience in all aspects of property we can provide bespoke tailor made solutions for you or skilled help on specific aspects as you need it.