Advice re. shared ownership of maisonette

[TJM]

My parents have lived in their home for 35 years. They own the top 2 floors of a maisonette (2 flats in total over 3 floors). Recently (4 weeks ago), a property developer bought the ground floor flat, with the view to carrying out extensive renovations before selling on. Upon their 1st meeting, he asked my parents if they would be interested in buying a share of the freehold (currently held by a local council) - but that if they weren't, not to worry as he would be willing to buy the freehold to the whole maisonette himself. My parents informed him that they would want to buy their own. Since then, he has been bombarding them with telephone calls asking them to sign the documentation he obtained to start the proceedings. He has also told them that the solicitor he uses regularly has agreed to help them with the process at a discounted rate due to their contacts.

I am worried about his intentions and the repercussions on them.

If they purchase the freehold for their property - are they liable for any of the costs incurred due to the renovations of his flat?
What are they liable for?
What basic information should they arm themselves with?
What does he have to gain by rushing the process (the lease is 95 years)? ie. will it help him get planning permission? Will it give him the right to share the renovation costs? etc.

Any advice would be appreciated!!!

[JustinN]

Assuming the property is in England or Wales (other jurisdictions, such as Scotland, have different laws relating to property), it sounds as though your parents are being invited to become joint owners (with the developer) of the freehold interest in the whole building. The lease of their maisonette would still belong to them alone, and the lease of the ground floor flat would belong to the developer. The terms of those leases govern the rights and obligations of the freeholder(s) and leaseholders as between each other.

Owning a share of the freehold will give your parents more control over what freeholder's maintenance work is done and when, but the lease terms will still be the deciding factors

I suggest that the best way is to form a company, 50% owned by the developer and 50% by your parents jointly. The shares in the company can then be transferred as either flat/maisonette is sold on, avoiding the need to transfer the freehold title each time. The company should be set up in such a way as to oblige the shareholders to transfer their share(s) with their flat/maisonette. Using a company also avoids the problem, if the ground floor owner is in breach of his/her leaseholder obligations in future, of being unable to force that person, wearing their co-freeholder hat, to enforce the leaseholder's obligations against themselves!

On the other hand, if your parents do not want to get involved in co-owning the freehold, they can simply stay as leaseholders alone - they will still have their existing protection against (for instance) over-expensive maintenance contracts, etc

Either way, if the work the developer wants to do is the leaseholder's responsibility, he will have to bear the full cost himself. If it is the freeholder's responsibility, the costs would normally be borne by both sets of leaseholders - this all depends on the lease terms and who bears the cost of different types of work

It does not sound as though the developer is "rushing things". He wants to carry out renovation works that may well need the freeholder's consent, so that he can then sell the flat on - the less delay, the better, for him. If he (alone, or jointly with your parents) is the freeholder, that process is quicker and cheaper than if he needs to get consent from the council as freeholder.

In any event, your parents should ensure that all work complies with Building Regulations (and planning control, if applicable) - they will have more control if they are freehold owners than if they are not

I hope this helps