How to Account for FH Purchase by Landlord


J

Jeff Gaines

I live in a retirement development of 20 houses and 4 flats, plus a flat
for our resident manager.

Our landlord has suggested purchasing an area about the size of a garage
from a leaseholder to be used for storage of rubbish bins. It was
originally included in the leaseholder's lease for parking.

The landlord has said that the cost of the purchase has to be spread among
23 leaseholders - excluding the one selling the space and excluding our
resident manager. I asked if that was correct since the purchase will
increase the freehold value of the site and the freehold is held by the
landlord. That caused a lot of puzzled expressions but the landlord is
adamant that leaseholders have to pay.

Any thoughts/guidance or suggestions as to how this purchase should be
accounted for?
 
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