Question 1

Buying the Freehold and Parking Problems

Accepted Answer

There are two matters we should value your advice on: 1) We have recently been offered the opportunity to purchase the freehold of the property. This offer came through the agents for the Freeholder. No price has so far been mentioned. I have never heard of a flat owner holding a freehold. I don’t know how it works. Which of the 21 flats would own the land? None of us are particularly enthusiastic about this proposal. We have a 999-year lease, as from 1960, the date the flats were built, and pay a ground rent of just £12.60 per annum. Those with a garage pay an additional £4.87. We do not see any advantage in purchasing the freehold, but I may be missing something. I would like, as Secretary, to be able to give an informed opinion to any flat-owner who asks how they should respond to the offer. 2) We have a big problem with parking. There are garages, but not enough for every flat. We park where we can, on the forecourt, taking care not to block other cars. In other words, there is scarcely enough room for residents’ parking, let alone visitors, and outsiders who choose to use our premises for parking. We already have a notice at the front of the property saying “RESIDENTS PARKING ONLY” but this does not deter. What can we do to deter rogue parking? We have looked into a company who have authority to issue penalty tickets – they patrol on a regular basis – but it would involve unsightly (to my mind) notices everywhere about NO UNAUTHORISED PARKING and information about FINES, to ensure that people have fair warning that patrols are in operation. My own opinion (it is others who have had this idea) is that the law of unexpected consequences could soon kick in. For example, we, the management, could get a lot of aggravation from anyone getting caught – people do not usually pay up quietly. Secondly, I feel that notices plastered everywhere, both at the front and rear of the property (where the garages are), could deter potential buyers and that the value of our properties could fall. FPRA Chairman Bob Smytherman replies: I will do my best to provide some initial thoughts and advice on the two areas you raise. I am not a lawyer, but have been dealing with issues from a practical point of view with over 20 years’ experience as a Director of an RMC of a 46 flat development in Sussex. We have a range of legal and other experts with many years’ experience to provide more detailed responses to members’ queries. On the issue about buying the freehold, it is likely that the Freeholder wants to sell for a variety of reasons to your management company. The individual flats would remain leasehold with a share in the Freehold. This is usually (if the price is right) a good thing to do as your development will be managed by Directors with a direct interest in the running of the estate (hopefully). The fact you have such a long lease at the moment makes the advantages of owning a share of your own freehold a lot less. The ground rent is already low and - unless there are any horrors in your lease - is unlikely to rise drastically over the next few years. I would suggest you send us a copy of your lease so we can ask one of our specialist in 'Collective Enfranchisement' (or buying a share of the freehold to you and me) to have a more considered look about the advantages. Owning a share of the freehold could substantially add to the value of each flat. If you do decide to take advantage of the freeholders offer I would certainly seek an independent valuation to ensure it is a good deal and not take the freeholders word for it. The issue of parking control is my area of expertise by default as my own block suffers a similar issue of too many cars and not enough spaces for all the residents and visitors, as well as living close to a commuter train station. A few years ago FPRA campaigned against the Governments proposal to ban wheel clamping on private land as this provided a very good deterrent to selfish parking Sadly the Government ignored us and introduced the ban leaving the only enforcement option for illegal parking on private land being the issue of parking tickets. These are self-regulated by companies that are members of the British Parking Association. Not ideal, but if you do go down this route I strongly advise ensuring whoever does this for you are members of the BPA. This will involve the adequate number of signage on your development. The criteria for the number and nature of the signs is regulated and will be supplied by the company (sometimes free). The company may also offer free patrols. If you go for the free option, the company is motivated solely by the number of tickets issued. If you pay for signage and regular patrols there will be more emphasis placed on deterrent and informing motorists of the rules than just issuing fines. I would certainly strongly urge against issuing fines yourself as this is both illegal and unenforceable and very confrontational. The specialist companies will always be willing to visit your site provide options and take instructions from your Directors or your agent and it is important to communicate well with all the residents details of any new parking regulations you impose and explain why. As to whether parking enforcement deters buyers , well from experience in my own block the opposite appears to be the case as potential buyers value the fact the management have taken responsibility for and tackling the issue of selfish parking. We have much more background to these issues in our past newsletters on our members’ website. [Submitted April 2016]

Question 2

Buying the Freehold and Parking Problems

Accepted Answer

There are two matters we should value your advice on: 1) We have recently been offered the opportunity to purchase the freehold of the property. This offer came through the agents for the Freeholder. No price has so far been mentioned. I have never heard of a flat owner holding a freehold. I don’t know how it works. Which of the 21 flats would own the land? None of us are particularly enthusiastic about this proposal. We have a 999-year lease, as from 1960, the date the flats were built, and pay a ground rent of just £12.60 per annum. Those with a garage pay an additional £4.87. We do not see any advantage in purchasing the freehold, but I may be missing something. I would like, as Secretary, to be able to give an informed opinion to any flat-owner who asks how they should respond to the offer. 2) We have a big problem with parking. There are garages, but not enough for every flat. We park where we can, on the forecourt, taking care not to block other cars. In other words, there is scarcely enough room for residents’ parking, let alone visitors, and outsiders who choose to use our premises for parking. We already have a notice at the front of the property saying “RESIDENTS PARKING ONLY” but this does not deter. What can we do to deter rogue parking? We have looked into a company who have authority to issue penalty tickets – they patrol on a regular basis – but it would involve unsightly (to my mind) notices everywhere about NO UNAUTHORISED PARKING and information about FINES, to ensure that people have fair warning that patrols are in operation. My own opinion (it is others who have had this idea) is that the law of unexpected consequences could soon kick in. For example, we, the management, could get a lot of aggravation from anyone getting caught – people do not usually pay up quietly. Secondly, I feel that notices plastered everywhere, both at the front and rear of the property (where the garages are), could deter potential buyers and that the value of our properties could fall. FPRA Chairman Bob Smytherman replies: I will do my best to provide some initial thoughts and advice on the two areas you raise. I am not a lawyer, but have been dealing with issues from a practical point of view with over 20 years’ experience as a Director of an RMC of a 46 flat development in Sussex. We have a range of legal and other experts with many years’ experience to provide more detailed responses to members’ queries. On the issue about buying the freehold, it is likely that the Freeholder wants to sell for a variety of reasons to your management company. The individual flats would remain leasehold with a share in the Freehold. This is usually (if the price is right) a good thing to do as your development will be managed by Directors with a direct interest in the running of the estate (hopefully). The fact you have such a long lease at the moment makes the advantages of owning a share of your own freehold a lot less. The ground rent is already low and - unless there are any horrors in your lease - is unlikely to rise drastically over the next few years. I would suggest you send us a copy of your lease so we can ask one of our specialist in 'Collective Enfranchisement' (or buying a share of the freehold to you and me) to have a more considered look about the advantages. Owning a share of the freehold could substantially add to the value of each flat. If you do decide to take advantage of the freeholders offer I would certainly seek an independent valuation to ensure it is a good deal and not take the freeholders word for it. The issue of parking control is my area of expertise by default as my own block suffers a similar issue of too many cars and not enough spaces for all the residents and visitors, as well as living close to a commuter train station. A few years ago FPRA campaigned against the Governments proposal to ban wheel clamping on private land as this provided a very good deterrent to selfish parking Sadly the Government ignored us and introduced the ban leaving the only enforcement option for illegal parking on private land being the issue of parking tickets. These are self-regulated by companies that are members of the British Parking Association. Not ideal, but if you do go down this route I strongly advise ensuring whoever does this for you are members of the BPA. This will involve the adequate number of signage on your development. The criteria for the number and nature of the signs is regulated and will be supplied by the company (sometimes free). The company may also offer free patrols. If you go for the free option, the company is motivated solely by the number of tickets issued. If you pay for signage and regular patrols there will be more emphasis placed on deterrent and informing motorists of the rules than just issuing fines. I would certainly strongly urge against issuing fines yourself as this is both illegal and unenforceable and very confrontational. The specialist companies will always be willing to visit your site provide options and take instructions from your Directors or your agent and it is important to communicate well with all the residents details of any new parking regulations you impose and explain why. As to whether parking enforcement deters buyers , well from experience in my own block the opposite appears to be the case as potential buyers value the fact the management have taken responsibility for and tackling the issue of selfish parking. We have much more background to these issues in our past newsletters on our members’ website. [Submitted April 2016]

Buying the Freehold and Parking Problems

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