Transfer of Freehold

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Transfer of Freehold

    I was the owner of a property containing 3 flats. I sold the flats to 3 different individuals. I still own the freehold which I have agreed to transfer, free of charge, a third share to each of the new owners, as it suits me not to have any further interest in the property. I set up a management company of which I am director. I have been looking into transferring the freehold to the three new owners with a 3rd share each, either by putting it into the company and naming the three new owners as directors and resign myself, which seems sensible as the company is already set up, or to make 3 seperate transfers. I am finding it so complicated. I don't seem to be able to do it online as I have no access to the portal. I have downloaded the forms but find the legal jargon is way above my head. I would like a solicitor to do it for me but the solicitor I used for the sale of the flats doesn't seem to know how to do it. Is there anyone here who can offer me any advice please. If there is a solicitor amongst the members here who would be willing to take it on for a fee I would be happy to hear from you. Many thanks, Keith.

    #2
    You can only make someone a director if they consent (and are not disqualified).

    Making someone a director does not give them any ownership of the company; that has to be done separately.

    What model articles are you using and what customisations have been made to the articles?

    It is probably safer to charge at least a nominal consideration for the purchase of the shares.

    Comment


      #3
      Is the management company a party to the lease?

      Comment


        #4
        As the registered owner of the freehold you can transfer title to the company for a sum of less than £6,000.

        You can then complete Land Registry forms that can be downloaded on-line from the LR web-site. Below a value of £6,000 there will be no need to have evidence of identity.

        The fee for registration is £40.

        As long as the company was formed with more than 3 shares, you can then transfer the shares to each of the flat owners.

        One matter is to do with Land Registry under Land Registration Act 2002, the other with Companies House under the Companies Act 2006.

        Since anyone capable of reading and writing English can do those tasks I fail to understand why any competent solicitor cannot undertake that task for you.

        Comment


          #5
          Thank you all for your comments. Much appreciated.

          Comment


            #6
            You can find help at a shop offering VAT, accounting and bookkeeping services to small shop keepers and companies.

            Comment


              #7
              Coming back to this thread, I would want to know why the freehold is of no value.
              I am assuming that there are 999 year leases with no ground rent payable, or the bother of maintaining the parts that were not demised by the leases is too much bother.

              Knowing why the freehold is to be given away will assist in offering more advice.

              Comment


                #8
                Gordon999,

                Thank you. I did used to use an accountant to file my taxes when I was letting the flats. I did ask his advice but he simply said he doesn't do legal stuff (his words) and referred my to a solicitor.

                Comment


                  #9
                  pilman,

                  Thank you.
                  Simply because of the state of the market in Yorkshire. We wanted to sell up and move away, and it suits me not to have any further involvement with the property. The flats didn't sell at the same time. Despite being good properties they were difficult to sell, I had to drop the prices several times to get a sale. I offered the new owners the promise of the freehold free of charge once the last flat was sold as an incentive for them to buy mine over somebody else's in an area that is flooded with vacant flats.

                  Comment


                    #10
                    When we sold our three holiday flats in a similar situation we were advised not to set up a company or make any other arrangements for ownership of the freehold but to let the 3 new leaseholders make their own arrangements. The freehold was included in the sale terms for each flat as a one third share. We never did learn what they all did with the freehold and weren’t particularly interested either!

                    Comment


                      #11
                      Form a limited company at a cost of less than £20 using an on-line formation company with one share issued in your name with you as the sole director.

                      Print out the forms TR1 and AP1 needed to make an application to Land Registry and complete them to show that the freehold is being transferred at a nominal cost to the new company.

                      Once the title deeds are received back from Land Registry offer to sell the £1 share to any one of the current leaseholders.

                      If no one is interested you do nothing further so that in a years time when no return is made to Companies House the company will be struck off the register and the property owned by the company will be considered to be "bona vacantia" a Latin term for "no legal owner" so will vest in the Crown Estate.

                      That means that you no longer have any obligation regarding the freehold estate, which is the future responsibility of the Crown Estate.

                      Explain that procedure to all of the leaseholders to make them understand what difficulties that will cause in the future if they want to transfer their leasehold title.

                      If one of them does not realise that accepting a gift of a £1 share is the most sensible way to stop that future event from happening, then you can proceed in the manner set out above.

                      Comment


                        #12
                        The Crown is exempt from any duty to maintain, so saying it becomes their responsibility is not really true. Also, I wonder if someone deliberately engineers this situation, they could be sued for the resulting failure to maintain.

                        Comment


                          #13
                          I am not sure PIlman's last post is the way to proceed if the object is to get the freehold to the leasholders. Apart from anything else it does not clear off your liability as landlord

                          You say you set up a management co but I am not clear how it fits in. Are the leases tripartite with the management co one of the parties? If so, how many shares are issued and who holds them?

                          Comment


                            #14
                            if the object is to get the freehold to the leaseholders
                            I thought the object was to get rid of the freehold and the responsibility for future maintenance obligations.
                            As soon as a company with no assets other than the freehold title is the owner of the building, then surely the individual who transferred the title is no longer liable for anything?
                            Isn't it the limited company's responsibility thereafter, until it is struck off and has no further interest at all?

                            I felt that if a leaseholder was told about that possibility then taking control of the limited company made sense.

                            It is a potential threat to dealing with any of the leasehold titles in the future, which ought to make a leaseholder accept the offer now being made to become owner of the freehold title at virtually no cost.

                            Comment


                              #15
                              Whilst the object may be for the OP to get shot of the whole thing, he does indicate that he wants to transfer the freehold one way or the other to the leaseholders. The way proposed by Pilman does get rid of the freehold, but does not release the OP from the landlord's obligations under the leases: see sections 6,7 and 8 of the Landlord and Tenant (Covenants) Act 1995.

                              To give helpful advice we need to know how the leases are structured. There are two main possibilities.

                              The first is that the leases are bipartite, that is the landlord is one party and each leaseholder another. If that is the case the OP says to the leaseholders: "I want to give you the freehold. There are two conditions - you release me from the landlord covenants and you pay the legal costs. Go away and discuss this among yourselves and/or with a conveyancer and let me know how you want to set it up."

                              The second is that the leases are tripartite, that is that the parties are (1) the landlord, (2) the management company set up by the landlord and (3) each leaseholder. Assuming the management company was set up for the sole purpose of managing the building and has no assets or obligations other than those set out in the leases, then, in outline, the easiest way forward I can come up with is that on the same day:

                              1. The OP transfers the freehold to the management company.
                              2. The leaseholders release the OP from the landlord's obligations contained in the leases.
                              3. The OP transfers all the shares in the management company to the leaseholders.
                              4. The OP resigns as director of the management company.

                              The OP puts the proposal to the leaseholders and tells them that if they accept it they should instruct a conveyancer to do all the paperwork.

                              Comment

                              Latest Activity

                              Collapse

                              Working...
                              X