There are two main types of land ownership: freehold and leasehold. Freehold ownership is where the person owns outright all of the land and buildings on a plot. For example, houses are usually freehold properties. On the other hand you have leasehold property. This is where a property is owned for a set period of time, and rent is paid to a landlord (often the freehold owner).
There is also a concept known as a ‘flying freehold’. This is when a section of a freehold property extends above or below a neighbouring or adjoining property. For example, where a room or balcony is situated above a shared passageway or protrudes over an adjoining property or section of land. Flying freeholds are most common where an older, large building has been converted into a number of smaller freehold properties.
It is not always obvious whether a property is subject to a flying freehold. It is therefore paramount that any potential purchaser carefully inspects the property and looks out for any sections that appear unusual or to extend outside the boundaries. Where any doubts arise, a purchaser should immediately refer to their surveyor and solicitor. A surveyor will then physically inspect the property and assess the section of the building which has raised concern. The solicitor can then advise on the title deeds.
What does this mean?
Where a flying freehold exists, the owner will need specific rights to benefit the property. For example, rights of support from the property below and the right of shelter from the property above. The owner will also require rights of access to enter onto the neighbouring property for maintenance and repair as required.
The prospective owner of a flying freehold will also want to check whether there is an obligation on the neighbouring property to maintain and repair that property. This is important as the flying freehold section relies on the good structural condition of the lower property. You would want to ensure that, if works need to be carried out, you have a way of forcing an unwilling neighbouring owner to contribute and assist.
Both properties should also be under an obligation to each other to maintain and insure their part of the property to ensure the consistency.
What do I do if my flying freehold property does not contain required legal rights?
Unfortunately, there may be a case where you have found your forever home which is subject to a flying freehold and the legal title does not assist you with the rights and covenants you require. Here, an indemnity policy may be a solution.
Indemnity insurance will cover you if a part of the property lies under or over an adjoining occupied property. The policy will cover the inability to force your neighbour to repair for the support and protection of your property. This includes where the adjoining premises are uninsured or inadequately insured.
Alternatively, you could enter into a mutually agreed Deed of Grant and Covenant to vary the title deeds. With this, you could ensure the correct rights and covenants are granted and noted on the title. This can be a lengthy and expensive process. You and your neighbour will both need to agree on the rights and covenants before they can be added and registered on the title deeds for both properties.
Lenders’ views
Where you are purchasing the property with the aid of mortgage, your solicitor must report to your lender if any part of the property is subject to a flying freehold. Lenders have differing views on lending on properties with flying freeholds.
Some will lend if you ensure that an adequate indemnity policy is in place. Others, on the other hand, may reconsider their valuation or offer and whether they can lend in such circumstances. Therefore, potential purchasers should seek advice on the risks concerning future saleability and the possibility of any decrease in value.
If you have concerns regarding the future marketability of the property, your surveyor should be able to advise.
Levi Solicitors LLP’s expert conveyancing team can advise on all types of residential property. If you are purchasing a property or think you have an issue relating to a flying freehold, call us on 0800 988 7756.
