Case study: restructure of a criss-cross leasehold

Our Commercial Property team recently acted for a seller on the restructuring of their property to increase its potential and investment.

The property was split into two flats, held as a criss-cross lease. This means the leaseholder of the downstairs flat owned the freehold of the upstairs and the leaseholder of the upstairs owned the freehold of the downstairs flat.

Our client was the registered proprietor of both the leasehold and the freehold of both flats, and they wanted to redevelop the property into three flats.

Our commercial property solicitors liaised with the client to discuss how this could be achieved and the options available. We referred the client to his accountant to discuss which of the options was the most tax-efficient way for this client to proceed.

On this occasion, it was agreed that the team would proceed with merging the leasehold and freehold titles in the property to effectively start with a ‘clean slate’. We liaised with the land registry on merging the existing leasehold and freehold titles (as our client was the registered proprietor of all of them) so that the client was left with one freehold title.

Our team set up a management company for the flat on behalf of the client, to relieve some of the responsibility from our client, as they intended to sell/refinance each flat going forward. Setting up a management company is attractive to both lenders and buyers.

We then drafted long leases for each of the three flats and transferred the freehold of the property to the management company, who then granted the leases back to our client; the most tax-effective method.

Our client was then left as the registered proprietor of three long leaseholds, which he can sell or refinance individually.

Further information

Our commercial property lawyers work with a wide variety of businesses across the South West and further afield.

To arrange a consultation with one of our experienced commercial property solicitors, call us on 0117 366 7345 or complete our online enquiry form.