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Converting leasehold back to freehold

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  • Converting leasehold back to freehold

    We have a business premises which is one half of a Victorian semi - the other half being divided into 5 self contained flats which was done in 1985. I am told that the top floor flat is the freehold with the 4 other flats (2 on the ground floor and 2 on the first floor) being leasehold (with 89 years left). All 5 flats have come up for sale (some 2 and 3 times) over the last 6 years during which we have owned our half of the building.

    We are looking at ways of extending our business premises and the logical step seems to be to buy up the flats next door. Would I be right in thinking that we need the freehold flat at some point in order to convert the others back to freehold premises. Our eventual aim would be to convert the flats back to one dwelling and then obtain change of use from residential to commercial. This latter part we don't see a huge obstacle but the legal logistics and cost of incorporating the whole property back to one freehold with no leaseholds existing is something we know very, very little about. If anyone can shed any light on this, it would be much appreciated. Thanks.

  • #2
    Re: Converting leasehold back to freehold

    When you refer to "converting" the leaseholds into freehold, a lawyer would refer to "merging" the leaseholds back into the freehold, extinguishing the leasehold titles

    This will automatically happen if the freehold and leasehold titles come into the same ownership, provided neither is subject to a mortgage or other encumbrance which the other is free from

    Therefore, you would need to acquire the freehold title (for any leaseholds you own or acquire to merge into it). Then, as you acquire each leasehold, merger and extinguishment would be automatic (though you would need to apply to the Land Registry to close the registered leasehold titles) unless, for instance, one of the titles was subject to a mortgage - to fund your acquisition of it, for instance - that mortgage would remain in place, and prevent the leasehold title merging into the freehold

    Don't forget that you need planning permission to change the residential units to business use: don't buy them and then find you cannot use them for your business!
    This is based on my experience as a conveyancing solicitor in England, but I do not accept liability for information I give in this forum