How to Account for FH Purchase by Landlord

Discussion in 'UK Accountancy' started by Jeff Gaines, Mar 27, 2014.

  1. Jeff Gaines

    Jeff Gaines Guest

    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?
    Jeff Gaines, Mar 27, 2014
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