Enforcing the responsibilities of the freeholder

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    Enforcing the responsibilities of the freeholder

    This is more of a curiosity, but I would love people’s thoughts.

    We own our flat as a share of freehold, in a large block of flats. Because it’s so big, the freehold is set up as a company, with directors.

    For the past few years, there has been an apathy amongst the directors that is somewhat alarming. Large- and medium-scale repairs haven’t been addressed, and we’re at the point where one leaseholder was threatening legal action due to ongoing repairs that hadn’t been addressed. The property managers that had been hired to run the building were also pretty poor.

    In addition, we had an apathy among leaseholders; huge swathes of flats refusing to pay the service charge, directors then not chasing up, etc.

    I came on as director about a year ago, and we’ve managed to turn the building around pretty well. We’ve got new property managers who are FANTASTIC, we’ve addressed a number of large scale repairs and things are going well. We’re also chasing up the arrears that the leaseholders owe, with the help of solicitors.

    But I suppose that’s where my question lies. If I hadn’t stepped up, what is the logical conclusion of that? Presumably the leaseholders threatening legal action would eventually have carried that out. Assuming they were to successfully take the company to court (I can't imagine the other directors would even bother to turn up to court), what would be the expected outcome? Would the company be forced to pay compensation? How would that even be administered, when the directors don't bother doing anything and the other leaseholders don't pay service charge? Can the freehold be stripped from the company, if it is found that the company are not meeting their legal obligations? And if so, where does it go?

    As I say, I’ve stepped up and we’re turning it around. But I suppose my main question is – how is the legal obligations of the freehold company to the leaseholders actually enforced, bearing in mind the leaseholders are also the freeholders?

    #2
    The outcome is that lessees take FTT to the Tribunal. The freehold company cannot carry out it's obligations because its income does not match its expenditure. The service charge accounts go bust because the FH itself has no assets to make up the shortfall. The freehold reverts to the crown.

    Negligent Directors can also be sued - but that's trickier.

    Everybody has a property which is unsaleable or massively discounted for any sensible purchaser.

    Comment


      #3
      I see - I think. But then who is responsible for repairs? The crown... as in, the Queen?!

      Comment


        #4
        Originally posted by Cheeseplantsrock View Post
        I see - I think. But then who is responsible for repairs? The crown... as in, the Queen?!
        It is likely the FTT would have appointed a manager long before any of that

        Comment

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