A flying freehold is when a section of a freehold property extends over, or under, a neighbouring property. The flying part of the property need not be in mid-air, it can be over a part of the adjoining property’s freehold land, or over a common part.
Examples of flying freeholds are a cellar which spreads out under the neighbour’s property or a terraced semi-detached house where the dividing line does not go straight down the middle so part of one owner’s property is directly above the other’s property. Historically there are many areas where rows of houses were built with no thought that they may one day be sold off individually and have roofs, bedrooms, stairways and cellars creating flying freehold interests. The most commonly seen example is a covered passage between two terraced houses. If the passage is owned by the property on the right, but the upper floor of the left property extends over all or part of the passage then this is a flying freehold.
Flying freeholds are problematic for the property that is ‘flying’ over the other as it is dependent on the other property for support and upkeep. It is often the case that the part of the property ‘flying’ over the other forms part of the structural integrity of the flying freehold property. As a result the flying freehold must rely on the owner of the neighbouring land to maintain the neighbouring property so that the flying freehold property is not damaged. A flying freehold owner must consider the effect that a lack of maintenance of the neighbouring property would have. What if the neighbouring property is completely obliterated or re-developed or the roof that shelters the flying freehold falls in? These are concerns that the owner of a flying freehold property must consider and therefore should inform its solicitor as soon as possible if it suspects that part of the property that it is purchasing is a flying freehold.
Many sellers have been unaware that their property is a flying freehold until they intend to sell or mortgage the property. Some lenders are reluctant to accept a flying freehold as security for a mortgage as it is subject to a risk that the neighbouring property may fail to maintain and repair its property which could damage or prejudice the structure on which the flying freehold rests. A lender will generally require the flying freehold to have all necessary rights of support, protection, and entry for repair as well as a scheme of enforceable covenants together with a requirement for any subsequent purchasers of the neighbouring property to give the same covenants.
Traditionally under English Law it is not possible to enforce positive covenants against another. This causes issues when trying to ensure that the neighbouring property maintains its part of the property that the flying freehold is supported by. Legal issues such as rights of access to maintain and repair, costs of repairs and major renovation must be considered and provided for when purchasing a flying freehold property. A solicitor can resolve these issues by converting the freehold interests into leasehold, deeds of mutual easements and covenants, indemnity insurance and the Access to Neighbouring Land Act 1992.
Conversion to a leasehold structure can be quite expensive and time consuming and requires the co-operation of both owners and their respective lenders as it entails the transfer of both parts of the flying freehold to single ownership with long leases granted to each owner containing the necessary rights and covenants which would then be automatically binding on successors in title. A deed of mutual easements and covenants is one of the most common solutions used but again requires the co-operation of both parties and their lenders. The main concern is that positive covenants do not automatically bind successors in title and therefore an arrangement is needed to ensure that any future purchasers must enter into the same form of deed.
Another common resolution is to put an indemnity insurance policy in place. It is important to ensure that the policy provides for an increase in the indemnity limit in accordance with property price inflation. A purchaser needs to be aware though that an indemnity insurance policy does not provide the flying freehold owner with the rights necessary to ensure that the neighbouring property is sufficiently maintained. Indemnity insurance policies also often exclude cover for structural alterations or change of use which prevents redevelopment or substantial improvements. In the event that these potential resolutions are not available the Access to Neighbouring Land Act 1992 may be a partial solution if the correct procedure is followed. This Act permits someone to enter onto the adjacent land in order to carry out works where they do not have the consent of the owner by way of a court application. This is limited as the court cannot grant access if the adjacent owner would suffer hardship, interference or disturbance that would make it unreasonable for the court to make an order. This is an expensive solution with no guaranteed success and should be a last resort.
People can live happily in a flying freehold situation if the neighbouring land is adequately maintained however if selling or purchasing a flying freehold it is important to be aware of the issues that may be experienced in order to avoid problems.