Home owners find out the price of freedom: A freehold stake in your flat may be more trouble than it is worth, says Mary Wilson

THE Leasehold Reform, Housing and Urban Development Bill has finally had its third reading in the House of Commons, and leaseholders - if they qualify - will soon be allowed to buy the freeholds of their properties and manage their own affairs.

But once leaseholders find out how expensive and time- consuming managing their own property is, there may not be the anticipated surge of applications to enfranchise leases.

Rosie Mills, an advertising copywriter, who lives in a house in west London which is split into four flats, is just about to sign over the block - which she has been running on and off for the last six years - to a management company.

'It came to a point when I couldn't cope any more. There was one freeholder who was in arrears with his bills and it was terribly difficult dealing with that, and then there was a dispute with the insurance company over a ceiling that had fallen in and I just flipped.

'We are each going to be paying pounds 200 a year more to this management company, but from my point of view it will be worth every penny.'

Ms Mills bought the flat as a quarter-freeholder six years ago. She has a one-bedroomed basement flat, the other flats are on the other three floors of the house.

'I am the company secretary as well as a director, so it was up to me to file the annual accounts and pay the filing fee to Companies House.

'The first thing that happened was that one of the flats had a sitting tenant and we had to get a new lease executed. After about six months sorting out the mess this chap decided to buy the flat.

'I was very lucky in that I had a friend who was a solicitor. I consulted her a lot over that time. If I had been paying for the advice, it would have cost a bomb.

'After we had sorted this out, the four of us decided we needed a managing agent. We used one for a year, but they were just too costly and we decided to get somebody else. The one advantage I can say about being the freeholder is that at least you can choose your managing agent.

'The main problem throughout has been that two of the freeholders are very rarely there. One is abroad and the other away a lot, so everything landed on my shoulders. I think handling it yourself can work if all the freeholders take their fair share of the problems.

'I have had to write all the letters, take the photocopies, keep the freeholder in France up to date and so on. It has been immensely time-consuming.'

Eventually an agent who was near retiring age agreed to manage the block for them. He cost only pounds 100 each a year. Everything was fine during the first year, but then when the building insurance came up for renewal the freeholders decided it was far too expensive.

'This chap just didn't answer any of my letters. So again it was down to me to find out how much insurance we should be paying. Everyone was putting pressure on me and I was going into new territory.

'The crunch came when I got a letter from the bank saying the account was overdrawn. It turned out that there had been a bank error - they had withdrawn money that should have come from another account - but one of the freeholders had also not been paying his monthly contribution on time.

'We had each agreed to pay pounds 300 a year in monthly instalments to cover insurance premiums, maintenance, company accounts and so on.

'Letting this person know he was in arrears was really tricky. I decided to drop him a note saying that we were looking for new managing agents, and, by the way, did he know that he was behind with payments.'

According to Ms Mills, he was uncomfortable that a fellow householder had had to remind him of his obligations.

To add to the problems, a leak in the roof was discovered and there were insufficient funds to cover the repairs. Although three of the freeholders were happy to pay extra, they were unsure whether they could rely on the fourth person. At this point they decided that enough was enough and started to look for another managing agent.

The new company will be charging each freeholder pounds 500 a year to cover costs and all other outgoings. All four freeholders have agreed to this, and if anyone gets behind with payments this time Ms Mills need not lose any sleep over the matter. 'It will not be my worry any more,' she said.

(Photograph omitted)