Share of freehold questions - confused

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  • Starlane
    replied
    Originally posted by Macromia View Post

    I seem to remember you previously having your own threads about this subject. If you did find a solution there, I suspect that it's highly unlikely that you will find one by adding to someone else's thread.
    The best solution will depend on the specific circumstances - but is never likely to end well if you can't come to some sort of amicable arrangement.
    Agree thank you

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  • Tipper
    replied
    Forgive me if I missed in the above but how long is the flat's lease?
    That's very important...

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  • Macromia
    replied
    Originally posted by Starlane View Post

    Yes Macromia but how best do you do that if you are a non director and they wont listen, would it be appoint a manager route ?
    I seem to remember you previously having your own threads about this subject. If you did find a solution there, I suspect that it's highly unlikely that you will find one by adding to someone else's thread.
    The best solution will depend on the specific circumstances - but is never likely to end well if you can't come to some sort of amicable arrangement.

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  • Starlane
    replied
    Originally posted by Macromia View Post

    Realistically, they don't.
    That's the type of situation that my comments in this old thread were highlighting.

    If the directors are breaching the lease, and can't be made to understand that they can't do this, the only real option is to get control of the management of the property taken away from them.
    Yes Macromia but how best do you do that if you are a non director and they wont listen, would it be appoint a manager route ?

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  • Macromia
    replied
    Originally posted by Starlane View Post
    Macromia,

    So how does a leaseholder get the freeholder the landlord to enforce the continuing breaches when they are the directors breaching the lease themselves?
    Realistically, they don't.
    That's the type of situation that my comments in this old thread were highlighting.

    If the directors are breaching the lease, and can't be made to understand that they can't do this, the only real option is to get control of the management of the property taken away from them.

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  • Jatin38
    replied
    Originally posted by scot22 View Post
    Sounds like nirvana. We have owned a flat identical situation to yours. As has been said, it depends on owners as, of course, the other depends on freeholder. Over 20 years it has varied hoever, on balance, I prefer share of freehold. I'm sure your new neighbours will welcome someone like you. Best Wishes.
    I would also recommend you the same. Having a share of freehold would be a good option with numerous benefits: no annual ground rent, no premium cost for statutory 90 years lease extension.

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  • Starlane
    replied
    Macromia,

    So how does a leaseholder get the freeholder the landlord to enforce the continuing breaches when they are the directors breaching the lease themselves?

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  • EleanorDale
    replied
    Thank you, Macromia. I honed in on this: 'The freehold company cannot agree to breaches of the lease terms because the majority vote for this.' The problem that arises in my first experience of a freehold company is that the lease is breached willy nilly. And very few members, if any, have even read the lease. So when does the company/freeholder surface in defence of the lease? And if it/he/she does not, then what? I suppose one can, as a member, sue the individual lease breacher. I have investigated this. I went to a highly reputable local solicitors' firm. I found out there that my first interview at this firm will cost £400. But the firm would not litigate. It would refer me to a specialist solicitor in another firm, who will charge £1,000 for the first interview. I backed off rapidly. And Companies House will not, on its own say so, intervene in company affairs. I suppose where there is a real-person freeholder, this problem does not arise. It sure does in my freehold owning company: E.g. My neighbour, a director of my company, had a door fitted into the chinmey stack ot the wall that divides his loft from mine, and came and went into the loft above my flat as he pleased. According to the Lease, the company retains ownership of the lofts. Only our flats are demised to us. But the lease gives exclusive right of entry into a loft to the person in the flat below it. (Hang it! A freehold house would be much better!)

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  • Macromia
    replied
    Originally posted by EleanorDale View Post
    I notice that many of you are using the word 'freeholder'. Under what conditions do share-of-freehold people have one? In my context, we are all members of our company that owns the freehold of our company's property. So there is no freeholder.
    This illustrates one of the main problems with 'share of freehold' properties - many (perhaps most?) of the leaseholders who own flats in them don't understand that the normal leaseholder / freeholder relationship still applies.

    The freehold company (which is what the leasehlders own a share of) plays the role of the freeholder and is responsible for upholding all of the parts of the lease that would otherwise be the responsibility of a third party freeholder.
    For example, while some decisions can be taken by majority vote, and leaseholders may have more opportunity to sway decisions to agree with their opinions, The freehold company cannot agree to breaches of the lease terms because the majority vote for this.

    There can also be problems if the freeholder needs money to defend against court/tribunal action started by a leaseholder, or if they need to start action themselves against a leaseholder who is breaching their lease - if the lease and/or company articles make no provision for such sums to be recovered this can be a problem.

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  • vmart
    replied
    Yes, there is a freeholder - the company is the freeholder and you will each either be members (if the company was for example set up as a company limited by guarantee) with voting rights determined in the Articles; OR shareholders if the company was set up as a company with shares.

    While people generally speak of owning a share of the freehold - they don't. You may find this interesting/helpful:
    https://forums.landlordzone.co.uk/fo...ad-in!-part-1=

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  • EleanorDale
    replied
    I notice that many of you are using the word 'freeholder'. Under what conditions do share-of-freehold people have one? In my context, we are all members of our company that owns the freehold of our company's property. So there is no freeholder. All of us own an equal number of the company's shares. So collectively, we own the company. I had an idea that this is the situation of every share-of-freehold context. It will be funny if it turns out that I'm wrong. (I would know of the freeholder if we had one, would I not?)

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  • Macromia
    replied
    As others have suggested, having a 'share of freehold' only means that you have more control over what happens to your property if all other leaseholders want to work together to maintain the building.

    If you look through previous threads on this forum you will find numerous examples where a small group of leaseholders have taken control to the exclusion of everyone else, some leaseholders have refused to pay their share of costs, or leaseholders have breached their leases (and refuse to listen to anyone else in the block) because they think they can do what they like because they are freeholders.
    In all these cases it can be difficult, and potentially expensive, to get the property managed properly.

    Third party freeholders aren't necessarily much better, but(unless the freeholder lives in the block) it does mean that you are less likely to have fight against your neighbours if the building needs work done.

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  • vmart
    replied
    I generally prefer TP freeholder for some of the reasons alluded to above. Our freehold is subject of an enfranchisement claim and I dread the day the Nominee Purchaser (NP) takes over. We are not participating as we would not wish to even attempt to work with the members of the NP. The extent of breaches in their respective properties and service charge arrears staggering - yet these are the people the law allows to make future decisions regarding the block via enfranchisement. Part of the reason they wanted to engage in collective enfranchisement was they believe they will be able to avoid paying arrears and do anything they want in their respective flats and we worry how this will impact on us and our property.

    Personally, we are mostly satisfied with our existing freeholder as is one of the other flats (also not participating in the enfranchisement claim). It is notable that the non-participants are those that abide by the terms of their leases and pay their service charges!

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  • Gordon999
    replied
    Originally posted by sixunforced View Post
    Not sure if this is the right place for this query but anyway, I'm a first time buyer and have been searching for a property for like two years now (not continuously but on and off and obv covid halted my search for a while). I found a really nice 2 bedroom flat for under £320,000 in a block of around 12 flats (I think) and my offer has been accepted, however the only issue that is concerning me is that it is a "share of freehold." From what I've read, overall this is a better option than an ordinary leasehold option as it gives you more control and autonomy about how the building is run etc. and also it slightly increases the overall value of the property, you can increase the length of lease plus it's easier to sell the property?

    At the same time though I'm reading reports of people saying it can be good but only if the others involved play their part in the agreement. If they do not co-operate then this can cause issues?

    So what is the verdict here really? Is share of freehold worth going for or should I stick with a leasehold flat (as most flats are leasehold)??
    Owning a share in the freehold company is definitely good for the leaseholders, because there is no annual ground rent to pay, and freehold company can reduce unfair payments under the lease and offer Nil premium cost for statutory 90 years lease extension.

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  • EleanorDale
    replied
    • sixunforced, I write more to amuse you then to frighten you off share-of-freehold. I have lived in my nice little flat for 13 years. Both generations of director in all this time were pretty thoroughly hopeless/dim/delusional. But it is only two days ago that I discovered something that really made me drop my jaw: We have four directors for our 20-flat Victorian conversion of four terrace houses. They all complain that our Lease is 'too hard to read', and want to 'change' it. And they are directors for display reasons only, and to butter their egos.

      The factotum is an estate agent who was imposed on our company by the first generation of directors. (This was odd, because the First Tier Tribunal has sole jurisdiction to impose a director on a leasehold company, but this court has no jurisdiction to impose a manager on a private residential company of shareholders.) The 'manager' appointed all four directors. And he decided that he is not a manager at all, but our company secretary, but, ahem! the sole decision maker in our company.

      Suddenly, I became aware that the manager/company secretary has created a new bank account for us to pay our annual maintenance fee we into. And that account is held in the name of HIS private company. The literacy-challenged directors had agreed to this!

      And my 13 years of share-of-freehold experience have not taught me what the heck I can do now. Perhaps Companies House will help. IF it does, it will be only to take exception to the fact that a Directors' Special Resolution has happened, but it was not sent to the Registrar, and the company members were not informed of it. And that will be interesting, for I bet that neither the directors nor their boss, the manager/secretary, know what a Directors' Special Resolution is.

      Still, I have a registered title. So nothing drastic will happen to my interests. I am trying to inform the other shareholders. But I am the only one of the 20 who lives here full time. They will get my letter in a day or two, and perhaps some of them will read it. Tiddly-dum tiddly dum ...

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