Flying freeholds are fairly common, but many homeowners are not sure how they may affect the selling of their house. Here’s exactly what you’ll need to know.
What’s A Flying Freehold?
“Flying freehold” is a legal term commonly used to describe whether a part of a freehold property is above or under a part of another freehold property.
For example, your living room is under one of the bedrooms next door, or part of your house is over your neighbour’s garage. The flying freehold may also be part of a building that sits over a shared alley.
So if you’re selling a flying freehold house, what do you need to know?
Will A Flying Freehold Make My House Less Likely To Sell?
What Are The Potential Problems of A Flying Freehold?
Neither you nor your neighbour have any legal duty to preserve your property or to make any required repairs. As a consequence, any failure to maintain one property will have an effect on the other.
E.G. A leaking roof on the overlying property might put the underlying property at risk-but the lower property would not be able to implement the repair of the above-mentioned property. Situations like this are easier to deal with in a lease setting.
Most homeowners are not typically prone to allow their property to fall into disrepair, so examples like the above are rare.
Flying freeholds may cause conflicts to the neighbour when anything needs to be repaired; you may assume that the blame for the repair rests with your neighbour, but they may not.
More generally, such disputes refer to aesthetic problems such as reluctance to decorate on the outside.
In the event that repairs are required, conflicts can occur if an owner of a property refuses access to a part of the property in order to fix or assess the damage.
From your buyer’s perspective:
You might have a great deal to do with your neighbours, but your buyer may still be concerned about having to work with whoever lives next door.
The buyer’s conveyance attorney would like to know whether there are rights of access to your neighbour’s portion of the flying freehold so that potential repairs will not be hindered.
How Do Mortgage Lenders View Flying Freeholds?
This is the highest probability that your sale is falling through. Some lenders actually refuse to lend to property with a flying freehold. Most lenders are willing to lend, but there are always requirements.
For example, at the time of writing, HSBC (the largest lender in the United Kingdom) stipulates that they will lend as follows:
The contractual rights of help, security, repair and maintenance and entry for repair and maintenance and the mutually enforceable covenants, generally including the Deed of Covenant, shall be entered into in the same form in each dealing with the property between the existing/other flat owners and the incoming purchaser.
It would be worth getting the Flying Freehold to the attention of every prospective purchaser as soon as possible. This will allow the borrower to verify that their chosen lender is happy to lend rather than discover this during the conveyance process.
Helpfully, the Mortgage Lenders Council (CML) maintains a list of individual lender requirements for flying freeholds.
The Solution is Usually Indemnity Insurance
The mortgage lender is likely to apply for an insurance policy to be taken out. This is normally paid by the vendor and only costs a few hundred pounds.
Indemnity plans are usually proposed during the conveyance process.
However, there is no reason why you should not instruct a lawyer before you find a buyer-in fact, there are many reasons to do so, and most lawyers operate on a duty-free basis. You may then ask the Attorney for clarification that the policy could be a matter of concern and provide this detail to potential buyers in advance.
By resolving the flying freehold problem upfront, the purchaser, their broker and mortgage lender should all be assured that your flying freehold does not pose an investment risk.
We hope you enjoyed this post if you want to know more about flying freehold if you have questions relating to flying freeholds or you have a current issue with a flying freehold property then get in touch or leave us a comment below. We’ll try to help as much as we can.