Blog - 10/03/2020
The faults with flying freeholds
A flying freehold is where part or the whole of a freehold property (whether commercial or residential) is structurally above another freehold property which is owned by a different party. An example of this is where there are two semi-detached houses and the bedroom of the first property in question is situated over the ground floor of the second property.
Whilst this is not a common situation, when it occurs there are a number of risks that arise and documents that are required and thorough due-diligence should be carried out as to whether specific rights have been granted to each property.
It is necessary to see that the owners of the properties have entered into mutual deeds of covenant confirming what each owner must do with their properties and what they shall not do. It is also appropriate to see restrictions on both titles stating that both parties will not sell their properties without getting their buyer to enter into a new deed of covenant with the other owner with regard to any positive obligations e.g. the buyer will pay 50% of the cost of repairing the service media which is shared by the two properties.
However, the above is often not done and sufficient rights have not been granted. This can leave owners being left without sufficient rights (or power to enforce such rights) or the benefit of the required covenants from the other freehold owner in order to protect their property.
One right that is often forgotten is the right for the owner of the upper property to put scaffolding on the outside of the building in order for them to carry out works. If this is not documented, the owner of the upper freehold may have to find another (potentially more inconvenient and expensive) way of doing their works or face action from a disgruntled neighbour.
It is also necessary to see that both owners of the properties are under sufficient obligations to insure their respective properties. The owner of the upper freehold property will need to see that the owner of the lower freehold property is under an obligation to insure their property to its full reinstatement value and that they shall rebuild or reinstate their property in case of damage or destruction. Furthermore, the owner of the upper freehold property will require an obligation that the owner of the lower freehold property will not do anything at their property which could cause damage to the upper parts or render any insurance policy for the lower freehold property void or voidable.
Some mortgage providers are reluctant to lend on flying freehold properties. That is not to say that all lenders will not lend on flying freeholds but they will most definitely require confirmation that:
- the property has all necessary rights of support, protection, and entry for repair as well as a scheme of enforceable covenants that are also such that subsequent buyers are required to enter into covenants in identical form; and
- the title for the property is good and marketable.
Indemnity insurance is available to cover some of the points raised above but can be expensive to purchase. Further, a surveyor should be instructed as soon as possible to inspect the property/properties to pick up on any defects pre-purchase.
As a result of the above, if you are considering buying a property with a flying freehold, advice should be sought regarding your purchase and careful consideration given as to whether you proceed with this.
If you would like any more information in relation to the above please contact Edwin Coe’s Property Team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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