Business, Legal & Accounting Glossary
Colloquial term for a Freehold property that does not stand in its own patch of land, and it therefore dependent in some way on the good behaviour of other landowners. If, for example, I had a two-storey house and wanted to sell (rather than lease) the top storey to someone else, I would be creating a flying freehold. The new freehold would be of value only so long as the old one was properly maintained. In addition, there would need to be some mechanism for obtaining access to the top storey that could be enforced by the new freeholder. There has been a great deal of discussion whether such an arrangement is technically possible under UK law as it currently stands. Although people will not normally want to sell parts of their houses, the ability to create dependent freeholds is of great interest to property developers. The opinion at the moment seems to be that although there is nothing unlawful about creating flying freeholds, they are unworkable in practice. If I wanted to build a block of flats and sell the individual units as freeholds I would experience no legal restraint from doing so, but in practice, there would be few buyers. Finance companies do not regard such things as sound investments and are unwilling to enter into mortgages on them. The reason for this is that there is no clear way to create positive obligations on freeholders that ‘run with the land’ in the same way that a restrictive Covenant does. While covenants could be imposed that prevent the freeholders blocking each other’s staircases (for example), it would be difficult to create a covenant to maintain a shared roof that would be binding through multiple sales of the properties.
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This glossary post was last updated: 6th April, 2020 | 0 Views.