The 4 Hidden Problems with Share of Freehold

A share of freehold is when a flat or apartment leaseholder owns a share of the freehold of their entire building.

Understanding Problems with Share of Freehold

While a share of freehold offers increased control and financial autonomy for flat or apartment owners, it also introduces a unique set of challenges. Without effective project management, these issues can quickly escalate, threatening the smooth running, legal compliance, and value of your property.

Key reasons why effective project management for your collective freehold purchase is essential:

• Coordination Difficulties: With multiple co-owners, getting agreement on repairs, improvements, or major decisions can create delays and friction.
• Financial Risk: Unexpected major repairs or legal claims can result in significant costs if not managed proactively.
• Legal and Compliance Challenges: Staying up-to-date with health & safety, fire regulations, and property law is complex and essential to avoid fines or legal claims.
• Maintenance Backlogs: Poor organisation may lead to essential maintenance being overlooked, turning small issues into costly disasters.
• Disputes and Relationship Strain: Decision-making deadlock and communication failures are not just frustrating—they can stall vital works or even result in litigation.

Skilled project management brings together expertise in law, finance, building management, and communication, ensuring your building stays safe, compliant, and valuable.

Key Problems with Buying a Share of Freehold

Shared Management 

A share of a freehold is not the same as buying a freehold house. When you purchase a freehold house, you have the complete right to control everything that happened to your property. You get to make all decisions with regards to what gets done or not done. When you only own a share of a freehold, decisions are made between yourself and the other share of freehold owners. 

This means it can be possible for your co-owners (shareholders) to make decisions that affect your property. However, if you did not own a share of the freehold you would be in a worse situation, where you would receive no input into decisions that affect the property. 

This makes shared management a minor problem with the share of freehold. Other freeholders will still potentially be able to make decisions that you may disagree with (if a majority vote is cast), but it is important to remember without a share at all there would be no opportunity for discussion in the first place. Because of the complexity of this and other issues, we recommend getting expert advice on buying a Freehold.

Lack of Expertise

It’s vital that all freeholders have, or have appointed a representative that has, a good understanding of Landlord and Tenant laws to ensure that building maintenance and upkeep responsibilities, as well as health and safety legislations are being met. Lack of expertise in these areas could lead to building deterioration, alongside unhappy or vulnerable residents living in potentially dangerous environments. 

Failure to comply with legislation could also lead to criminal prosecution, amongst fines or even imprisonment, which is why we always advise that you seek expert advice before purchasing a share of the freehold.

However, employing a managing agent will save you many headaches in this area – all good managing agents keep up to date with Landlord and Tenant laws, and any other building regulations you may need to follow.

Problems With Development

Problems with development can include things like: insufficient foundations, incorrect or substandard materials, poor drainage systems etc. In the majority of cases these problems will only come to light when you have a problem with your property, such as water penetration, so this is why it’s important to be aware of what can go wrong.

Building Defects

The final consideration is the one we see most often, hidden building defects. These problems will typically show up quickly after moving in. They can include: cracks in the walls/floors (or even above windows and doors), broken tiles, broken glass, faulty drainage systems etc and could leave you liable for finding thousands of pounds worth of repair costs. In order to avoid exposure to these hidden problems you should consider purchasing a share in a freehold property with a warranty, or employing expert advice before buying a share in a freehold.

With both development problems and other building defects, leaseholders would end up paying anyway, through their service charge, so why not buy your freehold and be in control of how your money is spent?

What are the Benefits of Buying a Freehold?

You may be weighing up whether or not to form a collective with the other leaseholders in your block. Though it might appear an overwhelming process if done properly it is not and there are many benefits to buying your freehold outright, including:

• Increasing the value of your property
• Full oversight of the quality of works and maintenance done to the building
• Taking full control of the management
• No ground rent or other hidden costs
• The ability to take out insurance plans which are more comprehensive or affordable

Though a freehold purchase will reap some or all of these benefits, owning a share of a freehold comes with some considerations.

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Why Managing Your Own Collective Enfranchisement Can Be Challenging

Taking on the management of your own collective enfranchisement may look appealing, but in practice, self-management often intensifies the issues found with share of freehold:

• Increased Administrative Burden: Organising meetings, minute-taking, collecting fees, managing accounts, and chasing late payments can become overwhelming for owners who already have their own commitments.
• Lack of Professional Expertise: Few leaseholders have specialist knowledge in property law, finance, or building maintenance, raising the risk of accidental non-compliance and costly mistakes.
• Impartiality and Dispute Resolution: Personal interests can conflict, and without a neutral party, disputes between owners are harder to resolve swiftly.
• Time Constraints: Effective building management is time-consuming, meaning delays to repairs and decisions are common when all work is volunteer-based.

A professional project manager or managing agent alleviates these issues, bringing expertise, impartiality, and procedural rigour. They keep legal and financial obligations on track, plan repairs, forecast budgets, resolve disputes, and enable leaseholders to make the most of their share of freehold without constant hassle or risk.

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Issue/Task	Self-Management by Leaseholders	Professional Project Manager/Agent
Legal Compliance & Regulations	High risk of accidental breaches	Regularly updated on current law; mitigates risk
Financial Planning & Budgeting	Inexperienced; may under/over budget	Expert forecasting, efficient fee collection
Maintenance Coordination	Prone to delays/disagreements	Planned schedules and prompt delivery
Dispute Resolution	Conflicts can escalate or deadlock	Neutral party mediates disputes swiftly
Administrative Burden	Time-consuming and stressful	Managed externally, freeing leaseholder time
Communication	Can be inconsistent	Structured, regular updates and meetings
Cost Efficiency	May miss savings/overpay contractors	Leverages networks for better deals and accountability

What are the Responsibilities of a Freehold Shareholder? 

Freehold owners, or the collective freehold shareholders, are responsible for the maintenance of the building and its land, as well as ensuring its smooth function. This includes key responsibilities such as ensuring things like communal lifts, stairways and halls meet industry health and safety regulations, carrying out repairs, and keeping up with ever changing property legislation. They can decide on the budget and what works are done and how they are prioritised. However, many buildings (or collectives) employ a managing agent to take care of this for them.

Looking For Support To Purchase Your Freehold? 

If you’re thinking about purchasing a share of a freehold but are worried about the potential hidden share of freehold problems, we can help. At the Freehold Collective, we help leaseholders buy their freeholds. We consult with leaseholders at any stage of their freehold journey, and offer a wealth of industry expertise developed over years of freehold purchases.

Share of Freehold Problems FAQs

What are the biggest share of freehold problems for co owners?

Key share of freehold problems include disagreements over building maintenance, property management, financial contributions, and service charges. Without clear managing agents, disputes can lead to freehold nightmares for collective freehold shareholders. Leasehold property owners in share of freehold properties sometimes face a freehold dispute when standards or contributions are misunderstood.

How are potential disputes resolved between flat or apartment leaseholders?

Potential disputes over ground rent or budgets among co owners are first handled between share of freehold owners or via a managing agent. If unresolved, issues may escalate to the tier tribunal property chamber for official dispute resolution.

Can a project manager help prevent share of freehold nightmares?

Yes. A project manager to facilitate the smooth running of the collective purchase process can significantly improve the future of your building’s property management, legal compliance, and dispute resolution, helping prevent share of freehold nightmares by setting up the foundation effectively.

What responsibilities do collective freehold shareholders have in a freehold flat or share of freehold ownership?

Co owners must handle building maintenance, ensure legal compliance, manage ground rent, and agree on service charges. Open communication with other freeholders and clear processes help avoid freehold problems and disputes in freehold properties.