On 25 Jul, 21:15, "steve robinson"
wrote:
Yellow wrote:
steve robinson ] said:
wrote:

The block was constructed 4 years ago and this is how I think such
communities typically develop, assuming for the sake of discussion
that this is a sizeable-ish block:

Amongst the genuine first time buyers and Maiden Aunts, there
will be people who have bought multiple flats as investments and
live amongst them - others that live elsewhere. Many of those
flats will be let to people who cause day-to-day problems.

The people who live amongst the problems need to get them sorted.
This group will band together and will set up a "Fighting Fund"
later to become the "Sinking Fund". People think that is a cost;
it is the reverse, an investment, cash in the bank.

The fund-holders engage a solicitor to buy the Freehold and now
they have control. Soon the non-freeholders realise they are
second class citizens in their own flats and cannot easily sell
their flats without regularising their leases.

At that point the original group get much of their money back from
selling shares in the freehold.

Sweet

The new freeholder cannot change the terms of the lease so its near
impossble without agreement to regulise all leases

buying out the freehold on a sizable block can prove extremly
expensive and end up being a money pit if all leaseholders do not
want to buy into it Not for the faint hearted

We did it - three blocks on the site, 72 flats in total, 1920's
building and I would highly recommend it. Yes, it takes organisation
and a bit of cash but being able to manage your own maintenance et
all (and the costs!) makes it worth while both practically and
financially.

And of course we got our money back by selling shares and lease
extensions - in fact I think, by the time I moved, I might even of
made a profit and I ended up with a 999 year lease for myself at no
additional cost.

you did the right thing by moving , these things are great until you
get differing opinions between shareholders and the inevitable in
fighting and power struggles

I absolutely agree with you, and would never, ever recommend anyone to
buy a leased flat without a share of the freehold...and a share of the
sinking fund which comes with it, which it may be that Yellow has
forgotten about - he left that behind when he moved

My son is just out of his teens and managed to get on the housing
ladder/snake with no deposit by buying a flat from Barratts, where
they lend you the money interest free to put up as the 25% deposit you
don't have, and you pay it back interest free 10 years later
scratches head

Now the freehold is up for sale. My thinking is:

1) You shouldn't buy a flat unless you have control of the freehold.
2) If you are in that situation you shouldn't buy the freehold because
it is safer and easier to move.

....given that he *can't* move...

3) if you are going to stay put then you should move heaven and earth
to collectively buy the freehold.

But it is a curious commodity. How the hell do you work out what it is
worth?

wrote in message
...
On 25 Jul, 21:15, "steve robinson"
wrote:
Yellow wrote:
steve robinson ] said:
wrote:

The block was constructed 4 years ago and this is how I think such
communities typically develop, assuming for the sake of discussion
that this is a sizeable-ish block:

Amongst the genuine first time buyers and Maiden Aunts, there
will be people who have bought multiple flats as investments and
live amongst them - others that live elsewhere. Many of those
flats will be let to people who cause day-to-day problems.

The people who live amongst the problems need to get them sorted.
This group will band together and will set up a "Fighting Fund"
later to become the "Sinking Fund". People think that is a cost;
it is the reverse, an investment, cash in the bank.

The fund-holders engage a solicitor to buy the Freehold and now
they have control. Soon the non-freeholders realise they are
second class citizens in their own flats and cannot easily sell
their flats without regularising their leases.

At that point the original group get much of their money back from
selling shares in the freehold.

Sweet

The new freeholder cannot change the terms of the lease so its near
impossble without agreement to regulise all leases

buying out the freehold on a sizable block can prove extremly
expensive and end up being a money pit if all leaseholders do not
want to buy into it Not for the faint hearted

We did it - three blocks on the site, 72 flats in total, 1920's
building and I would highly recommend it. Yes, it takes organisation
and a bit of cash but being able to manage your own maintenance et
all (and the costs!) makes it worth while both practically and
financially.

And of course we got our money back by selling shares and lease
extensions - in fact I think, by the time I moved, I might even of
made a profit and I ended up with a 999 year lease for myself at no
additional cost.

you did the right thing by moving , these things are great until you
get differing opinions between shareholders and the inevitable in
fighting and power struggles

I absolutely agree with you, and would never, ever recommend anyone to
buy a leased flat without a share of the freehold...and a share of the
sinking fund which comes with it, which it may be that Yellow has
forgotten about - he left that behind when he moved

No he didn't, it will have been taken into account when assessing the price,
well it should have been if he had told the EA about it.


My son is just out of his teens and managed to get on the housing
ladder/snake with no deposit by buying a flat from Barratts, where
they lend you the money interest free to put up as the 25% deposit you
don't have, and you pay it back interest free 10 years later
scratches head

It's just a way of making the headline price smaller. Apartments down by my
sister are "pay 50%" because that way they can advertise them as "from 80K".

But you are not buying only 50% and paying rent on the rest because if you
were the developer would be taking the risk on the selling price going down
in 2 years time.

By doing it this way this risk is with the buyer.

Now the freehold is up for sale. My thinking is:

1) You shouldn't buy a flat unless you have control of the freehold.
2) If you are in that situation you shouldn't buy the freehold because
it is safer and easier to move.

...given that he *can't* move...

3) if you are going to stay put then you should move heaven and earth
to collectively buy the freehold.

But it is a curious commodity. How the hell do you work out what it is
worth?

There are ways of assessing this.

tim

steve robinson ] said:
Yellow wrote:

steve robinson ] said:
wrote:

The block was constructed 4 years ago and this is how I think such
communities typically develop, assuming for the sake of discussion
that this is a sizeable-ish block:

Amongst the genuine first time buyers and Maiden Aunts, there
will be people who have bought multiple flats as investments and
live amongst them - others that live elsewhere. Many of those
flats will be let to people who cause day-to-day problems.

The people who live amongst the problems need to get them sorted.
This group will band together and will set up a "Fighting Fund"
later to become the "Sinking Fund". People think that is a cost;
it is the reverse, an investment, cash in the bank.

The fund-holders engage a solicitor to buy the Freehold and now
they have control. Soon the non-freeholders realise they are
second class citizens in their own flats and cannot easily sell
their flats without regularising their leases.

At that point the original group get much of their money back from
selling shares in the freehold.

Sweet

The new freeholder cannot change the terms of the lease so its near
impossble without agreement to regulise all leases

buying out the freehold on a sizable block can prove extremly
expensive and end up being a money pit if all leaseholders do not
want to buy into it Not for the faint hearted

We did it - three blocks on the site, 72 flats in total, 1920's
building and I would highly recommend it. Yes, it takes organisation
and a bit of cash but being able to manage your own maintenance et
all (and the costs!) makes it worth while both practically and
financially.

And of course we got our money back by selling shares and lease
extensions - in fact I think, by the time I moved, I might even of
made a profit and I ended up with a 999 year lease for myself at no
additional cost.

you did the right thing by moving , these things are great until you
get differing opinions between shareholders and the inevitable in
fighting and power struggles

That isn't why I moved. :-)

Honestly, we did OK. We had proper elections, proper votes and proper
meetings (that were very well run because I used to chair them). We used
a managing agent who very much worked for us and we managed them with a
very firm hand.

The company directors had a very clear mandate as to what they could do
without having to call a general meeting and a vote and a very clear
understand as to what they could not do - not having this in place seems
to be a fail point for some who buy their freehold. I am not saying that
we all agreed, all the time - far from it - but we had a structure that
ensured no one had overall control and that no small clique could hijack
due process.

Before we bought the freehold we'd had to replace the roofs on our
buildings. Cost well over a quarter of a million and was a right royal
cockup - the icing on the cake perhaps being that the company doing the
work went bust before the end of the project and it turned out the
managing agent had up front paid for *all* the work even though it was
not going to be completed.

This does however compete with their confusion between net and gross
costs and them having to come back to the leaseholders half way though
the project to collect the VAT element as they had forgotten to include
it in the costings. As many needed to remortage to raise the money for
the work, this caused a few problems.

During the time I was a director of the company (how many years? 5 or 6
perhaps) we dealt with outside painting and maintenance (£70,000) and
the reconstruction of a section of the building (£150,000) due to the
corrosion of internal metal structure and the remaking of the carpark
(£35,000) and the removal of asbestos from the old boiler room (a very
controversial £15,000) as well as managing a day to day budget in order
of £50,000 a year.

Mind you, it's been three years since I moved now.... :-)

] said:
On 25 Jul, 21:15, "steve robinson"
wrote:

you did the right thing by moving , these things are great until you
get differing opinions between shareholders and the inevitable in
fighting and power struggles

I absolutely agree with you, and would never, ever recommend anyone to
buy a leased flat without a share of the freehold...and a share of the
sinking fund which comes with it, which it may be that Yellow has
forgotten about - he left that behind when he moved

She... but anyway...

We had a small reserve fund - around £20,000 or £30,000 - and that was a
decision of all the shareholders, reviewed every year at out AGM. That's
only £200 or £300 per flat. As a group we decided that we would rather
pay for large maintenance tasks as and when and we could do this because
people did pay their bills. Keep the place in good repair, keep good
accounts, be accountable, have meetings and people pay their bills. And
if they didn't pay we took them to court. We only ever had one person
who made us go all the way and we won, with all costs.

As far as I was concerned, when I moved, the reserve fund is as much
part of what I was selling as the flowers in the garden - all part of
the package you put up for sale. I mean, you don't think I paid 1/72th
of the cost of that bush so I'm damned well taking that bit with me,
although saying that, the previous owner of this house *did* take out
some of the plants when she left. :-)


My son is just out of his teens and managed to get on the housing
ladder/snake with no deposit by buying a flat from Barratts, where
they lend you the money interest free to put up as the 25% deposit you
don't have, and you pay it back interest free 10 years later
scratches head

Now the freehold is up for sale. My thinking is:

1) You shouldn't buy a flat unless you have control of the freehold.
2) If you are in that situation you shouldn't buy the freehold because
it is safer and easier to move.

...given that he *can't* move...

3) if you are going to stay put then you should move heaven and earth
to collectively buy the freehold.

My advice - buy it, even if it means you have to auction granny!

Why? Just imagine who might buy it, and why they might buy it, if the
residents do not....

But it is a curious commodity. How the hell do you work out what it is
worth?

If you cannot come to an amicable agreement with the freeholder by
negotiation (the route we took) there is a formula. There is a good
website - lease - I forget the URL, that you might find helpful.

On 25 Jul, 22:55, Yellow wrote:
steve robinson ] said:

snip

During the time I was a director of the company (how many years? 5 or 6
perhaps) we dealt with outside painting and maintenance (£70,000) and
the reconstruction of a section of the building (£150,000) due to the
corrosion of internal metal structure and the remaking of the carpark
(£35,000) and the removal of asbestos from the old boiler room (a very
controversial £15,000) as well as managing a day to day budget in order
of £50,000 a year.

Mind you, it's been three years since I moved now.... :-)

Obviously "Good for you!" and all that. You are just what every block
of flats requires - the well-organised person prepared to take on a
hugely stressed job for zilch pay GBP (USD zilch).

Much as you reaped the rewards, it must rankle a little that the
others also reaped the rewards without having to do any of the work?

Yellow wrote:

] said:
On 25 Jul, 21:15, "steve robinson"
wrote:

you did the right thing by moving , these things are great until
you get differing opinions between shareholders and the
inevitable in fighting and power struggles

I absolutely agree with you, and would never, ever recommend anyone
to buy a leased flat without a share of the freehold...and a share
of the sinking fund which comes with it, which it may be that
Yellow has forgotten about - he left that behind when he moved

She... but anyway...

We had a small reserve fund - around £20,000 or £30,000 - and that
was a decision of all the shareholders, reviewed every year at out
AGM. That's only £200 or £300 per flat. As a group we decided that we
would rather pay for large maintenance tasks as and when and we could
do this because people did pay their bills. Keep the place in good
repair, keep good accounts, be accountable, have meetings and people
pay their bills. And if they didn't pay we took them to court. We
only ever had one person who made us go all the way and we won, with
all costs.


The problem arrises when the person cannot afford to pay , no amount of
court time and costs will get money if they simply do not have the
funds .

Many housing associations and local authorities are having major
problems with those that have bought flats in large blocks , they
simply cant afford the tens of thousands of pounds asked for when the
blocks have major works performed , Whilst the LA and HA can wait for
thier money however , those in the privatly owned self managed freehold
flats are not in that position. Its often the case that in the short
term the other freeholders end up having to stump up the money
otherwise the works will just not get done

Yellow wrote:

steve robinson ] said:
Yellow wrote:

steve robinson ] said:
wrote:

The block was constructed 4 years ago and this is how I think
such communities typically develop, assuming for the sake of
discussion that this is a sizeable-ish block:

Amongst the genuine first time buyers and Maiden Aunts, there
will be people who have bought multiple flats as investments
and live amongst them - others that live elsewhere. Many of
those flats will be let to people who cause day-to-day
problems.

The people who live amongst the problems need to get them
sorted. This group will band together and will set up a
"Fighting Fund" later to become the "Sinking Fund". People
think that is a cost; it is the reverse, an investment, cash
in the bank.

The fund-holders engage a solicitor to buy the Freehold and
now they have control. Soon the non-freeholders realise they
are second class citizens in their own flats and cannot
easily sell their flats without regularising their leases.

At that point the original group get much of their money back
from selling shares in the freehold.

Sweet

The new freeholder cannot change the terms of the lease so its
near impossble without agreement to regulise all leases

buying out the freehold on a sizable block can prove extremly
expensive and end up being a money pit if all leaseholders do
not want to buy into it Not for the faint hearted

We did it - three blocks on the site, 72 flats in total, 1920's
building and I would highly recommend it. Yes, it takes
organisation and a bit of cash but being able to manage your own
maintenance et all (and the costs!) makes it worth while both
practically and financially.

And of course we got our money back by selling shares and lease
extensions - in fact I think, by the time I moved, I might even of
made a profit and I ended up with a 999 year lease for myself at
no additional cost.

you did the right thing by moving , these things are great until you
get differing opinions between shareholders and the inevitable in
fighting and power struggles

That isn't why I moved. :-)

Honestly, we did OK. We had proper elections, proper votes and proper
meetings (that were very well run because I used to chair them). We
used a managing agent who very much worked for us and we managed them
with a very firm hand.

The company directors had a very clear mandate as to what they could
do without having to call a general meeting and a vote and a very
clear understand as to what they could not do - not having this in
place seems to be a fail point for some who buy their freehold. I am
not saying that we all agreed, all the time - far from it - but we
had a structure that ensured no one had overall control and that no
small clique could hijack due process.

Before we bought the freehold we'd had to replace the roofs on our
buildings. Cost well over a quarter of a million and was a right
royal cockup - the icing on the cake perhaps being that the company
doing the work went bust before the end of the project and it turned
out the managing agent had up front paid for all the work even though
it was not going to be completed.

This does however compete with their confusion between net and gross
costs and them having to come back to the leaseholders half way
though the project to collect the VAT element as they had forgotten
to include it in the costings. As many needed to remortage to raise
the money for the work, this caused a few problems.

During the time I was a director of the company (how many years? 5 or
6 perhaps) we dealt with outside painting and maintenance (£70,000)
and the reconstruction of a section of the building (£150,000) due to
the corrosion of internal metal structure and the remaking of the
carpark (£35,000) and the removal of asbestos from the old boiler
room (a very controversial £15,000) as well as managing a day to day
budget in order of £50,000 a year.

Mind you, it's been three years since I moved now.... :-)

On the rare occasions i quote for any works on blocks of flats i always
insist that the money is either paid up front or ring fenced if i win
the job, seen it go pear shaped to often when some of the residents
cant pay or wont pay into the fund and the inevitable trouble it causes
when those that have 'paid' suddenly realise that they are jointly
responsible for those that havent
--

] said:
On 25 Jul, 22:55, Yellow wrote:
steve robinson ] said:

snip

During the time I was a director of the company (how many years? 5 or 6
perhaps) we dealt with outside painting and maintenance (£70,000) and
the reconstruction of a section of the building (£150,000) due to the
corrosion of internal metal structure and the remaking of the carpark
(£35,000) and the removal of asbestos from the old boiler room (a very
controversial £15,000) as well as managing a day to day budget in order
of £50,000 a year.

Mind you, it's been three years since I moved now.... :-)

Obviously "Good for you!" and all that. You are just what every block
of flats requires - the well-organised person prepared to take on a
hugely stressed job for zilch pay GBP (USD zilch).

Much as you reaped the rewards, it must rankle a little that the
others also reaped the rewards without having to do any of the work?

I lived there a long time, about 15 years, and got involved with the
leaseholders association quite early on - good training for what was to
follow - and quickly learnt that where there is apathy you get to have
things as just as you want them and where there isn't you get to be at
the heart of discussions which often (but not always of course) means
you stand a reasonable chance of getting a good result out of the
compromise agreed.

As for the work element of it, yes it took quite a bit of my time but
for the most part you can divide the jobs up so no one gets over
burdened. Look at it this way, I now have a garden to tend and my own
maintenance to see to, which takes me much much more time!

And it was good experience, made me more confident - I can run a meeting
better than the people who run the company I work for could even dream
of being able to do. I can deal with accounts and I am happy to make
decisions that involve other people's lives (and money) as well as my
own and to stand by those decisions.

Finally, while some of the people that came and went both in the
leaseholders association days and freehold days where useless,
pointless, self-serving and/or obnoxious (those who just sublet their
flats, not living in the block and running what were for us homes as a
business, were the very worst!), as a rule we always seem to manage to
get together sufficient a bunch of people with their heads in the right
place to get the job done - so it wasn't just me!

"Yellow" wrote in message
...
] said:
On 25 Jul, 21:15, "steve robinson"
wrote:


3) if you are going to stay put then you should move heaven and earth
to collectively buy the freehold.

My advice - buy it, even if it means you have to auction granny!

Why? Just imagine who might buy it, and why they might buy it, if the
residents do not....

------------------------------------------------------------------------------------------

Yep, You regularly see these go at auction for about 20 times the ground
rent. That sum ought to be peanuts to anybody, but it's surprising the
number of people who baulk at paying a grand to buy out a 30 pound ground
rent even when all the other advantages are explained to them.

tim

steve robinson ] said:
Yellow wrote:

We had a small reserve fund - around £20,000 or £30,000 - and that
was a decision of all the shareholders, reviewed every year at out
AGM. That's only £200 or £300 per flat. As a group we decided that we
would rather pay for large maintenance tasks as and when and we could
do this because people did pay their bills. Keep the place in good
repair, keep good accounts, be accountable, have meetings and people
pay their bills. And if they didn't pay we took them to court. We
only ever had one person who made us go all the way and we won, with
all costs.


The problem arrises when the person cannot afford to pay , no amount of
court time and costs will get money if they simply do not have the
funds .

Then they lose their flat. In reality however, what happened was that
the mortgage companies where dragged in as their collateral was at risk.

Obviously when there is short term hardship "payment plans" can be
agreed but, while the flats were quite pricey being on the south coast,
no one was wealthy enough to sub other people so you have to be hard
nosed about it.

And having a reputation for being hard nosed - *and* fair - helps a lot!
They know they are not going to get away with not paying but on the flip
side the whole thing was totally transparent and people where party to
how and why money was being spent. I seem to recall we used to be
chasing around 5% of monies as a rule.

We also had less problems with sublets than many similar blocks as we
managed to get to the point where letting agents and subletters knew we
would go for them and make *their* tenants lives hell if they did not
behave and this saw the type of tenant we got improve dramatically
during the time we took over the freehold. :-)

Many housing associations and local authorities are having major
problems with those that have bought flats in large blocks , they
simply cant afford the tens of thousands of pounds asked for when the
blocks have major works performed , Whilst the LA and HA can wait for
thier money however , those in the privatly owned self managed freehold
flats are not in that position. Its often the case that in the short
term the other freeholders end up having to stump up the money
otherwise the works will just not get done

This is a common problem and way before I moved in to my flat the block
had been allowed to fall into a state of disrepair and that resulted in
court action between the leaseholders and the freeholder (hence the
existence of a leaseholder's association) which resulted in the building
being brought up to snuff - at spectacular expense.

But at the end of the day everyone had to pay up or sell up.

We then had to replace the roof and that, as said before, was such a
cock up you would not believe but everyone paid in the end - and that
must of averaged £5000 a flat in the end, double for the biggest. And
I'm going back 15 years here when I'd not long paid just £39,000 for the
flat so it was a big proportion of its value.

So when we got the freehold, while emergencies obvious happened, we
tried to keep a steady hand and project the expenses over a five to ten
year period - meaning that no one had any excuse to be surprised.

I think the way to look at it is like this - work is needed to be done
regardless but if you own the freehold you are less likely to be stolen
from and you have more chance of inhibiting total incompetence than if
you do not - but yes, it takes effort. Unfortunately there are plenty of
thieves and incompetents are are all too willing to making a killing at
the expense of a helpless leaseholder and I for one did not want to be
another lamb for the slaughter.