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Jacob's Island - Freehold
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Last Updated October 2005
The freehold purchase: What was it
all about?
In early 2001, Berkeley Homes offered us the chance to buy the
freeholds of the blocks comprising the Jacobs Island development. Four
blocks (together making up the bulk of the development) took up the
offer. The freehold of most of the remainder of the development was
sold by Berkeley Homes to a company in the Peverel group, which also
includes Peverel OM, our managing agent. The four blocks that have
purchased their freeholds are listed towards the end of this note.
Freehold, leasehold: What's the
difference? What do they mean?
In England and Wales, land law has traditionally made it very
difficult to own a flat outright. The usual device for getting around
the legal problems has been the long lease. Technically, this is very
similar to a lease that one might sign for 6 or 12 months if renting a
flat. The main difference is that the long lease is for a very long
term – often 99, 125 or even 999 years.
Just like in a short lease, this means
that there's a landlord and a tenant. The tenant is the person who
owns the flat by having the flat let to them under the long lease. The
flat owner is therefore the leaseholder, and the flat is often
described as being a leasehold flat. In a block of flats, each of the
flat owners will have a lease of their own flat from their common
landlord. The landlord is usually the person who owns the actual land
that the block of flats stands on. The landlord therefore usually owns
the freehold of that land and is often described as the freeholder.
Berkeley Homes, who built the Jacobs
Island development, owned the freehold of the land on which the
development was built. When they sold the flats to the original flat
owners, this was done in accordance with this model, with long leases
being sold to the flat owners. When the development was finished and
all the flats were sold, they didn't want to remain the owners of the
freehold any more, and therefore offered it for sale.
So how is the freehold owned by us?
The four blocks that took up the offer each formed a company to
buy the freehold. For these purposes, Blocks A, B and C (the three
blocks around the water gardens) are one block because they are
essentially one building interconnected below ground level. Each
company owns the freehold of its block.
Those who participated in the freehold
purchase and contributed money towards it have each been issued one
share in the freehold-owning company to which they contributed. So the
shareholders in the freehold-owning companies indirectly own the
freehold through this route.
Are the participants' flats now
freehold flats, then?
No. The participants' flats remain leasehold flats just as they
were before. The only difference is that the landlord is now the
freehold-owning company, but this is also the same for the flats whose
owners did not participate. The ownership of the freehold is via a
distinct and separate legal route.
I have more questions. Who should I
ask?
Simply get in touch with the JIRA Committee Member that deals with
Freehold Issues. |
