Legally splitting up a property

Q: I want to have separate deeds for a house that contains two apartments each one with its own deeds. How do I go about this?


Assuming that Mr. Allen owns the freehold of the building in his own name, he cannot grant long leases to himself, nor can he transfer just the plot at the back to himself.  The only way of having separate leases now would be for him to set up a company (with himself as sole shareholder) and for him then to transfer the freehold to it.  It could then grant long leases back to Mr Allen.  The disadvantage of that of course is the cost and time of setting up and managing a company and transferring the freehold, plus any potential tax implications (on which he would need to take advice).  However it would have the advantage that if Mr. Allen wanted to take out a mortgage over one or both of the flats, he should find it easier to do that.  Mortgagees can be reluctant to grant mortgages over buildings containing flats which have not been demised on long leases.

If he does not want to mortgage the apartments but is solely concerned with selling them, that is not a problem at all.  He would simply grant new leases to the buyers.  Following the sales, he would remain the freeholder but since the freehold of the building would then have little value (and he would have the hassle of the freeholder’s responsibilities under the leases), he might simply want to transfer the part of the freehold containing the building to the new lessees after both had been sold.  The agreements for the sale of the apartments should state that after the second sale he will transfer the freehold of the building, with him retaining the plot.   The transfer document would then be a transfer of part of the title.   If he chooses not to transfer the freehold to the lessees, then the plot would remain as part of the freehold title.  If he then wanted to sell it off, he might have to offer a right of first refusal to the lessees.  Similarly, the lessees, if they chose to exercise their right to acquire the freehold, would potentially be able to acquire that at the same time.

When he sells off the apartments, he must be sure to reserve any rights he might need to develop the plot, for example for access, running of services etc. Mr. Allen might also want to take advice from a planning consultant, before selling the apartments, of the likelihood of getting planning consent to develop the plot.  He should also check the current title in case there are any old restrictive covenants limiting development, although if there are it will probably be possible to get indemnity insurance against the risk of anyone trying to enforce them.

I hope this information is of some assistance. However it is intended for general information purposes only based on the information given to us.   It does not constitute specific legal advice, which should always be sought on a particular problem.

Mischa Borris, White and Co Solicitors


For answers to your questions, dedicated support and expert advice on your homeowning queries, join us as a member today!


Related guides