Freehold Management Company

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    Freehold Management Company

    Dear all,

    In 2002 I purchased a large building which was split into 6 flats.

    Each flat has their owns council tax, gas and electricity charge with one communal water meter to the building, and a single insurance bill.

    As we all know tenanting has its ups and downs, and ‘LandlordZONE’ has been a great assistance.

    I have never pushed for the highest rents preferring higher standard tenants, so as a business not worth as much as it could be, consequently current thinking is to create separate titles, and sell as individual flats, possibly one per Capital Gains Tax year, also keeping my remaining loyal tenants housed too.

    My intention is to create 6 freehold flats and eventually sell each with a fair and proportionate say on repair and maintenance, as I would want if I were to buy one.

    I gather that I need to set up a ‘Freehold Management Company’ of sorts to organise communal costs, currently charged totally to me.

    On line I am just coming up with tenant occupied set-ups, (i.e. RICS 3rd edition is for landlords, leaseholders and agents.)

    I do want to attract buyers as well as keep existing tenants, but when they do leave it will be refit and sell as and when.

    Please could you direct me towards any relevant advice please regarding, to name but a few, :-

    Do I have to be limited? - is it best or best not to?

    What are my obligations with regard to filing and accountability?

    Voting rights.

    Are voting rights per flat or as per percentage of ownership (not all flats are the same size)

    Currently insurance covers full occupancy, with strict monitoring of vacant units. If I sell as a holiday home, which is quite likely, will there be a premium increase, and can I apportion charge accordingly to that flat?

    And most important of all

    Is “Conveyancing Questions” the right place to post this problem. Please do tell me to move and I will.

    Thanks in anticipation.


    My understanding is that freehold flats are almost impossible to mortgage.

    You need a serious amount of professional advice. As such, I think providing a lot of advice here would be a disservice, as it might encourage you to skip the professional advice.

    The RICS guide talks about tenants because leaseholders are tenants, and you will almost certainly need to make these flats leasehold, not freehold. However the RICS guide does not cover business uses, like holiday lets.


      Sorry, leaseholder64

      I am a mere novice.

      I think what I should have said, and please correct me if I am wrong,

      Six separate titles, six separate flats and shares in the freehold.? The intention being to ensure that all do have a fair voice, unlike some of the horror stories on here.

      I am not trying to cut corners at all, but just doing as much research as I can, r.e. Management Company, before I do sit down in a Solicitors or Accountant’s office.

      This site has directed me to current Insurance Brokers in the past and is generally my first point of reference.

      Thanks and I look forward to any assistance.


        The only way of having six people share the freehold is to form a residents' management company and make them members. The flats are then held under leasehold.

        The lease and the company articles need to interlock to ensure that membership of the company follows ownership of the leasehold interest.

        These things are very easy for even lawyers to get wrong, and quite a lot of threads here are about the aftermath of share of the freehold arrangements that have gone wrong.

        The company has a separate existence from the leaseholder, although owned by them, and is the landlord of the leaseholders.

        The term "share of the freehold" is estate agent speak, not a legal concept, and can be implemented in other ways when there are four or less flats.

        Incidentally, I hope you realise that you are responsible for the health and safety of the communal areas, even with the current arrangement.


          I’m learning.

          Residents management company? - would that have to be a limited company, as I have read some are, or is the limited status optional.?

          I don’t doubt that it could be problematic, hence I am trying to do my homework – is there such thing as a or rics link to something specific – failing which what should I search for on here – previously I had tried but couldn’t find anything specific.

          Responsible for the H @ S of communal areas? Is that any different to as is for tenants? Is it insurable or a standard cover on an insurance policy? Basically any further warnings? All gratefully received.

          Thanks again.


            RMCs have no specific legal status, so they could have unlimited liability. However I very much doubt anyone has ever gone that way.

            As I think you need it to own the freehold, it will have to be registered, so making it limited liability, being the normal case, is likely to be easier.

            However, I repeat that you need professional advice.


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