Joint freehold purchase with my neighbour

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    Joint freehold purchase with my neighbour

    Hello everyone

    I'm about to buy the freehold with my neighbour and was wondering if we should set up a company to do this or do it in joint names?

    I'm finding it really confusing deciding which way to do it as both have pros and cons.

    ​​​​I also don't know what it would involve day to day for both of us to hold the freehold as a company. Do you have to know all about company law in order not to do anything wrong or is it a lot more simple than I'm imagining it would be?

    Any advice would be greatly appreciated.

    Thank you.

    Beverly

    #2
    Buying the freehold under a "company name" if more than 4 persons are involved as buyers is the normal recommendation . But the problem is the legal requirement for annual filing of accounts by the Directors of the Freehold owning company to Companies House etc and reporting the change of company members after the sale of flat occurs and paying for a company secretary to manage the reporting.

    For a building with only 2 lease flats , the freehold title can be registered in the name of the flat owners as tenants in common. There is no annual reporting to Companies House but the problem arises if the joint owners ( now or in the future ) are not friendly and unwilling to co-operate as joint owners of the freehold, You can face problems selling the flat if other joint freeholder refuses to allow transfer of half share to incoming flat owner , so LEASE has advised use of a trust to own the freehold :

    Here is some advice from LEASE about this situation :

    https://www.lease-advice.org/article...tion-of-trust/

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      #3
      The company secretary duties for such a small company are not exactly onerous. If anything it is the accountant that you need to worry about, but such a company would generally be dormant, so the accounts won't change from year to year.

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        #4
        Thank you both for your advice.

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