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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Property Law
Satisfied Customers: 6276
Experience:  English solicitor with over 12 years experience
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I am trying to buy a flat above a shop. When I looked at the

Customer Question

Hi
JA: Hi. How can I help?
Customer: I am trying to buy a flat above a shop. When I looked at the flat I was told it was a leasehold property and that the sellers were selling the shop below and the flat above. Everything was going well until the other day when they told me that they want to sell the property on an Underlease not a Lease.
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: I have had a survey done.
JA: Where is the flat located?
Customer: Grayshott, Hindhead, Surrey. My solicitor is not happy the estate agent is telling me its fine and now I'm really confused
JA: Anything else you want the Lawyer to know before I connect you?
Customer: The shop keeper will be buying the shop at the same time as I purchase the flat.
Submitted: 12 days ago.
Category: Property Law
Expert:  UKSolicitorJA replied 12 days ago.

Hello,

 

What is your question please? Who is the freeholder? How long is the lease?

Customer: replied 12 days ago.
There is a management company for 9 shops and 9 flats. The present owners own a shop and the flat above. they are selling the shop and flat. I knew they had to split the lease which was going to take time. After seven months I have now been told that they are wanting to sell on an Underlease instead of a Lease. My understanding of this is that the Freeholder normally agrees to the lease being sold. and an Underlease is if the freeholder is not involved. My solicitor is not happy about an Underlease and everyone else is telling me its fine. Is an underlease normal under these circumstances?
Expert:  UKSolicitorJA replied 12 days ago.

No, I agree with your solicitor, an underlease is the same as subletting, so your landlord would be the current seller, not the freeholder. Normally, you would be assigned a lease.

 

In your case, your interest would be lesser than the freeholder and your lessor.

 

You should insist on a new lease being granted by the freeholder so that your relationship is only with the freeholder.

 

May I help further?

Customer: replied 10 days ago.
It is not unusual to own a leasehold property under an underlease. This generally means there is an “extra” party involved between the tenant (owner) and landlord of the freehold. Sometimes there could be extra costs involved ie notice fees but I have not been informed that this is the case. The ground rent and service charge for the flat and the shop are to be split equally so there would be no extra payments in this regard. As previously mentioned some mortgage lenders are not happy to lend on flats above certain flats and I was merely pointing this out to you should you decided to mortgage the flat or sell in the future.

If I take on the Headlease would that make a difference?
Expert:  UKSolicitorJA replied 10 days ago.

Please accept to continue.