Freehold shares

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    Freehold shares

    Our management company owns the freehold of our block and is considering taking the freehold of an adjoining property. The company shares will be designated type A and type B for each block with directors only being able to vote on matters relating to their block. Will all shareholders then effectively have shares in both blocks and what would be the potential pitfalls?

    The biggest problem is that it seems too complicated to be able to work it with the sort of directors that RMCs get.

    The rules on director voting seem to be the absolute opposite of the normal rules. Normally you can't vote if you have a conflict of interest.

    The shareholders would have shares in the company, not the blocks.


      You say,
      Our management company owns the freehold of our block

      1) Is your block a RMC and farm out the running of the place to an independent managing agent, not connected in any way to you block ( shares, etc ) and any managing agent could run your block

      2) Or are you an RMC with shareholders, and the RMC directors of the RMC are wanting to buy the other freehold.

      Either way, if all leaseholders are shareholders in the "Company" then the shareholders should be voting on this, as if anything goes wrong, it's the shareholders that may have to finance any disaster, which could be in the millions !

      More info is needed as to the exact setup. ( It will take investigation and easy to read sentences to get to grips to the organisation and future pitfalls, even to the legality of it all )


        Thanks. Our RMC has the freehold and has employed managing agents. There is second block on site (built later by the developer). The second block wish to set up a RMC and buy their freehold. However, there are some joint communal areas (badly drawn plans and poorly written leases). It has been suggested that we join forces and our RMC buys their freehold (with permission from the developer).
        Hence the suggestion of Type A and B shares. Naturally the shareholders of each block do not wish to have their control affected by the others. Can this be assured by careful re-writing of the Mem and Articles?


          It sounds like a disaster in the making. Who exactly thinks this is a good idea, and why? The suggestion is a bad suggestion. A very bad suggestion.


            That is my opinion also, so as no one sees any merit, I shall vote against it. Many thanks.


              As post number 4.

              But you have to tell your RMC that it is a stupid idea, because........ ( and include to them )

              It will be your block leaseholders that have fund the buying of the freehold of the other block, and not the other blocks leaseholders.( sort of )
              You can't really ask the other block leaseholders for any money, as they wont be buying the freehold, and are not part of your RMC either,

              Why should you pay towards someone elses freehold.

              Freeholds are normally bought up to make a profit, by investors, who charge for every little thing, to make the money. You will not be allowed to make any money, as it will then be taxable.
              Buying the other freehold is of no benefit whatsoever to the current leaseholders in your block. None whatsoever. It's your company, your leasholders that are buying the freehold, and for what, More admin ?
              No don't just vote no, spell it out to them in the voting meeting.

              But it's up to the other block leaseholders to fund their own purchase of their freehold, and I can't see them collecting the money and giving it to you on a promise, when you are just "some people next door"

              Keep it to 2 buildings, 2 RMCs.

              Yes, disaster waiting to happen, and on all the heads of your blocks leaseholders.


                Thanks - all taken onboard. I have just heard that our managing agents have also recommended against.


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