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Nov, 2014

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  1. #1

    Default Selling the leasehold to flat above commercial premises

    Hi,

    I was looking for some advice.

    I am considering purchasing the freehold to a local business. The flat upstairs is included in the sale so I would own the business premises and the flat.

    The flat is not currently tenanted.

    I would like to now where I stand when it comes to selling the leasehold to the flat. It seems like an easy way to make some money (approx 15 years rental income)and I would still have most of the same liabilities that would come with renting the flat out. Is this possible? How do I go about giving a value to the leasehold.

    The owner is also willing to lease the property on business transfer.
    .

    Figures

    Freehold £270000 in 2007
    Flat value approx £180000 to £200000
    Possible rental on flat Approx £14000 per annum
    Lease to business for sale £70000 plus £40000 rent pa

    Any advice or direction to advice would be much appreciated.


    Any advice on negotiating a price would also be a great help

  2. #2
    Join Date
    Nov 2012
    Posts
    537

    Default

    This is confusing, you say your considering buying the freehold but then lower down you say the lease to the business is for sale? Are you buying the freehold of the building? If so you can do whatever you want with it as long as you have planning etc...

    If you buying the lease to the business you would have to look into this lease very carefully and see what you can and can not do. I assume you are doing this as you have put £4k rent so would possibly need the freeholders permission to do this.

  3. #3

    Default

    Hi Hech,

    Sorry it is me being confusing.

    The vendor is willing to sell the whole property freehold or leasehold. My question is really where do I stand if I purchase the freehold and the sell the leasehold to the flat.

    Thanks

  4. #4
    Join Date
    Nov 2008
    Location
    Suffolk
    Posts
    2,601

    Default

    To be honest it's impossible to say based on the information you've provided... What is the lowest price the vendor is willing to sell the property for?

    What maybe a good price in one part of the country maybe a terrible price in another. Furthermore, the condition of the building needs to be taken into account. Will you be purchasing the property with full Vacant possession. If you sell a Long Leasehold on the flat then no you wont have the same liabilities as if you let on a shorter lease such as an ast. You will be required to maintain the structure of the building, but you will be entitled to recharge a portion of this back to the long lessee.

    You really would be better off taking specific advice from a specialist near to you. They will probably save you the amount of their fees in a reduced price or another area anyway.
    The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the salient facts BSc (Hons)

  5. #5
    Join Date
    Oct 2012
    Location
    England
    Posts
    278

    Default

    I'd suggest being very careful over price. There's a case gone to court at present to decide whether the flat over a shop where the property was originally built as house would qualify under under the right to buy legislation.

  6. #6
    Join Date
    Nov 2008
    Location
    Suffolk
    Posts
    2,601

    Default

    Assume you mean right to pre-emption and not right to buy?
    The opinions I give are simply my opinions and interpretations of what I have learnt, in numerous years as a property professional, I would not rely upon them without consulting with a paid advisor and providing them with all the salient facts BSc (Hons)

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