Things You Need To Know About Flying Freehold
Many people are unfamiliar with flying freeholds, which make up a significant portion of home sales. Here’s what you should know about them.
What is a flying freehold?
When a property is attached to adjoining property, it is often difficult if not impossible to separate the ownership of these adjoining premises. This legal complication is true even with a common wall.
In most jurisdictions, having part of the property over or under another property’s ground floor means that you share the responsibility for those structures. When one of the structures is damaged, you may both be liable for the costs incurred to repair it.
Flying freeholds are made possible by building a structure that can support itself without being attached to an existing or neighboring property. The attached properties are still owned separately, even though part of each property is literally floating in space with no support.
The neighbouring property owners living in the home below own only the ground floor of their house, and therefore bear responsibility for anything that happens there. The property owner(s) who built the flying freehold is responsible for everything above ground level, including any damage done to the underlying property.
Generally, each case must be decided on its own merits, as the leasehold estate will typically belong to the person or persons with whom you have a lease agreement. In fairness, part of this lease may include responsibilities for maintaining and repairing shared structures such as external walls and party walls. When a lease is unclear about who owns a certain section of wall, it may be written case by case to determine the most equitable solution.
Properties which are built with flying freeholds may be subject to special regulations and restrictions due to their unique design. If you intend to build a home that is attached only at one point, check your local building codes before beginning construction. A leasehold estate will only be as strong as the support it gets from its ground lease, so special precautions must be taken to hold a structure up in midair.
Some jurisdictions offer special incentives to encourage this style of construction, usually because it is more environmentally friendly. Flying freeholds are often built with renewable resources such as bamboo or hemp, which do not require deforestation. They may also use solar power to supplement energy needs.
Flying freeholds are most commonly found in cities where space is at a premium, but where it is also desirable to be close to other homes.
Examples of flying freeholds
1. When part of one property is built on top of another, creating a freehold situation, the upper property owner does not own the building or land beneath the “flying” portion. For example, when there is a house where part of the property extends over or under another property on a freehold.
2. A property that has a balcony that overhangs part of the property next door.
3. A property with a basement that extends under the property next door.
4. An upper flat with balconies that directly overhang the walkway making up part of their neighbour’s property.
5. A set of terraced houses where two houses share one roof between them, but each has its freehold title to the other party’s land.
6. The line between the two adjoining properties was not drawn straight down the middle from top to bottom in semi-detached or terraced houses.
7. A converted attic of a freehold property that reaches into part of the neighbour’s freehold property.
8. If one of the adjacent properties has two lots, meaning there is a house and an outbuilding (e.g., garage) on the same lot, but they are not freehold title to each other.
What are the legal requirements of a flying freehold?
Each property should have adequate legal rights throughout the conveyancing process, this includes the following:
1. The overlying freehold property should have a right of support from the lower property.
2. The underlying premises should have the right of shelter from the overlying freehold property.
3. There should be rights for each owner to access the other owner property, to maintain and repair the property with a flying freehold.
4. Each time the property is sold, all flying freehold owners should have the right to be notified of the sale and must be prepared to sign a mutual agreement of covenant.
Flying Freehold Indemnity Insurance
An indemnity insurance policy will almost certainly be required by the mortgage lender. The cost of this is generally paid for by the seller, although it may be as much as a few hundred pounds.
During the conveyancing process, indemnity policies are frequently discussed and clarify access rights.
However, there is no need to delay if you do not have a buyer. There are several reasons to begin the legal procedure while you wait for a buyer. Most solicitors charge on a no-sale-no-fee basis, so there’s no financial incentive to put it off any longer.
Before a buyer can be found, your solicitor will examine the title deeds and select the most effective approach to address the flying freehold. If an indemnity policy is required, one may be discovered ahead of time and made available as part of the transaction.
Freehold properties are commonly known as flying freeholds because they can change position in relation to one another by moving up or down. Freeholding is where two or more adjoining properties are united under the same ownership. This is different from a 999-year leasehold which would mean that adjoining properties are owned by separate entities.
As an adjoining property owner, you will need to be able to access your boundary line and your adjoining neighbour’s land without obstruction. This means that if someone has moved into the adjoining property, they are responsible for ensuring you have easy access to your land.
To prevent damage, adjoining property owners should agree between themselves about their responsibilities. This may be done informally or through the formal process of entering into a deed of an easement with adjoining neighbors.
As long as an easement is registered on the title deeds, it will override the flying freehold status. This will be useful in situations where the adjoining property is unoccupied or owners are denying access to one another.
Easements can also be created if adjoining properties are interchanged. If you’re planning on doing this, it’s advisable that you speak to your solicitor about how best to handle the situation.
Should I Buy A House With Flying Freehold
There are some truly unique properties out there. There are times when a neighbouring property is purchased or gifted, and it included a freehold or leasehold interests in the structure underneath neighbouring properties. In essence, it’s a ‘flying freehold’.
You may have discovered the ideal house to buy, only to learn that it has a flying freehold. It also implies that you may be wondering whether or not it’s worth buying a property with flying freehold.
If you want to get a mortgage for your property, make sure it has a flying freehold coverage of no more than 20 -25% of the property’s total gross floor area. Otherwise, you might be unable to obtain a loan.
The other property owners will also have to enforce positive covenants, verifying their legal responsibilities.
In addition, they will have to agree to maintain a structured insurance policy. The costs will consequently be shared by future owners.
It’s therefore vital that you discuss the issue with future owners and get their approval before agreeing on any future covenants or arrangements. You should also ensure you take legal advice from a solicitor to ensure your rights are protected when purchasing a property with flying freehold.
Finally, you should also note that future owners are allowed to alter the property’s internal arrangements, provided future owners agree unanimously that the proper legal obligations are adhered to.
So before buying your future dream home, make sure you do all your research t have an in depth knowledge about the house and its surrounding area.
Flying Freehold Mortgage
In English property law, the phrase “flying freehold” refers to a portion of a freehold property that hangs or is beneath another freehold. One freeholder does not own the structure that supports his or her portion of the property.
A room situated above a shared passageway, garage(s), or a balcony that property extends over a neighborhood property, for example.
The good news is that most mortgage lenders will consider your application if you’re considering a mortgage for a flying freehold property.
However, because most freehold properties covers a specific surface area, this is generally limited to 20% of the whole gross floor area of the property – some future lenders will allow up to 25 percent and others only 10%.
Maximum Loan to Value (LTV) is restricted to 90%. If the flying freehold affects less than 15% of the overall external floor area and adequate rights of support and mutually enforceable repairing covenants exist.
Source: UK Finance Mortgage Lenders’ Handbook
Flying Freehold Property Problems
What are flying freehold problems?
1. If the property owner refuses access.
Your neighbor may refuse access to your property even if the appropriate access rights are established in the mutual positive covenants. This is certainly probable, but neighbor disputes do happen.
2. Neighbors’ disputes between freehold owners often occur.
If you and your neighbors have a disagreement about the freehold, it may be difficult to come to an agreement regarding any required future repairs or access.
3. Noise levels between the upper and lower properties.
If the flying freehold involves a portion of the property that overhangs or underlies another freehold’s rooms, you must ensure that there is enough noise insulation between the properties.
4. The right to use a scaffold over the property extending beneath the flying freehold.
The owner of the higher property may demand the scaffold. However, the owner of the lower property has the option to refuse or charge a fee for such a right.
5. In practice, legal rights do not always guarantee the same outcomes as freeholds:
Having the appropriate mutual covenants in place does not always ensure that your neighbors will be friendly.
The only way to resolve airborne freehold disputes is through the courts, which might be expensive. This is why flying freehold indemnity insurance is so important.
6. Water leaks from the flying freehold to the neighbouring property.
If the bathroom of the flying freehold is saturated and there’s a leak, the water will most likely seep through to the underlying property.
A leaking roof on the overlying property would put the underlying property at risk as well.
7. Inadequate house maintenance and repairs on the property with flying freehold.
You have no legal obligation to maintain your home or even make required repairs. If the neighbouring property with a flying freehold fails to carry out these repairs, it could have an impact on the other.
8. Insurance protection:
It’s critical to verify that both property owners are adequately covered. However, this does not necessarily imply that each owner will be insured.