No matter whether you’ve just inherited a freehold or unable to commit to the responsibility of managing a freehold, there may come a time when you want to sell your freehold property. If you’re starting to consider the option of selling your freehold, there are a few things to take into consideration.
The difference between freehold and leasehold
If you own the freehold of a property, you own both the property and the land it has been built on. This means that you are responsible for both the property and land.
With a leasehold, you don’t own the property or the land, but you do have the right to live in the property for the time outlined in your lease agreement. The lease agreement will be made with the freeholder of the property and land, and the property will revert back to them at the end of the lease unless you agree to extend it.
What can affect the freehold value?
There are a variety of factors that can affect the value of a freehold asset. Besides the value of the leasehold properties, factors can include the annual ground rent (the yearly rent paid from the leaseholder to the freeholder) the length of the lease term (how many years are left on the lease) and the location of the property.
In order to get an estimation based on these factors, you can use an online freehold calculator to find out the value of your freehold.
What to do if you have tenants
There are laws in place, such as the Landlord and Tenant act 1987, to protect tenants. If you are starting the process of selling your freehold you must provide any qualifying tenants with notice within the correct timeframes.
If there are at least two flats in your property for instance, you are obligated to offer tenants the right of first refusal unless you have lived in the building for at least 12 months. It is also important that you collect all outstanding payments from tenants before the property goes to market so that you’re not left out of pocket.
Invest in legal advice
There are legal implications to selling any type of property so it helps to get independent advice from an expert in the field. Selling freehold properties in particular can bring about unexpected obstacles, such as providing specific paperwork within specific time frames.
In order to ensure that you’re doing everything you need to, it’s worth investing in a solicitor who specialises in the sale of freehold properties or who has strong knowledge on Landlord and Tenant laws.
We hope that these tips to selling your freehold property have given you the information you need to start the process.