Enfranchising from a company I'm already a member of.

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    Enfranchising from a company I'm already a member of.

    The estate I live on has 2 blocks. All the leaseholders are members of the company which owns the freehold and manages the block ("Share of freehold").

    Suppose one of the 2 blocks decides to go it alone - so in other words gain the freehold from a company they are already a member of and own a part of?

    Does anyone have any real life experience of this happening? Please don't ask the question "why?", as there are some very good reasons that I don't feel it would be relevant to go into here.

    What would happen to the common grounds in this case? Both blocks are roughly the same size (one is a bit bigger than the other), but there are shared garden and parking areas.





    #2
    Well over a year later - BUMP!

    Comment


      #3
      I guess that no one had any experience of this (and I don't either)!

      An important question will probably be: "Are each of the blocks under separate freeholds, or are both under the same freehold?"

      Comment


        #4
        It would be interesting if you would explain further. 50% of the members would need to agree to the new company, so only the larger block would be able to proceed and it would need to compensate the members of the smaller block, The common grounds are probably contained within the freehold title but you can confirm at the Land Registry. The lease will explain who is responsible for the management of the blocks and the allocation of charges.

        Comment


          #5
          A recent ruling gave that common grounds were still managed by freeholder in an RTM case.
          There are also more than 3 months in a year.

          Comment


            #6

            Originally posted by eagle2 View Post
            50% of the members would need to agree to the new company, so only the larger block would be able to proceed and it would need to compensate the members of the smaller block.
            I'm pretty sure you are misinterpreting both the letter and the spirit of the legislation there. The rights are granted to people who live in certain buildings and qualify, and I don't see why it is different here? And I'm not sure where the notion of compensation comes from? Happy to be proved wrong, but I think you've got yourself confused here.

            Originally posted by eagle2 View Post
            The common grounds are probably contained within the freehold title but you can confirm at the Land Registry.
            AFAIK the common grounds are contained within the freehold title. However... last time I remember looking at the Land Registry I could only find the 10 leases, not the freehold for the entire estate.

            Originally posted by eagle2 View Post
            The lease will explain who is responsible for the management of the blocks and the allocation of charges.
            The lease was drawn up before the 10 leaseholders became members of a newly formed freeholding company, which was in the early 90s around 10 years after the original leases were granted. So the reasonable assumption is that at that point the freehold was bought, and the current company set up. All costs for the entire estate are split evenly, 10% for each of the 10 leaseholders.

            Comment


              #7
              Originally posted by Section20z View Post
              A recent ruling gave that common grounds were still managed by freeholder in an RTM case.
              There are also more than 3 months in a year.
              Do you have a link to that ruling please?

              Comment


                #8
                Originally posted by Macromia View Post
                I guess that no one had any experience of this (and I don't either)!

                An important question will probably be: "Are each of the blocks under separate freeholds, or are both under the same freehold?"
                They are both under the same freehold.

                Comment


                  #9
                  I think the case of Mark Cutter v Pry Ltd may address the questions you are raising

                  Comment


                    #10
                    Originally posted by sgclacy View Post
                    I think the case of Mark Cutter v Pry Ltd may address the questions you are raising
                    Thanks - looking at that now, and there are indeed a lot of similar issues.

                    Comment


                      #11
                      If all leaseholders are members of the same freehold company, you should consider getting on the board as director and changing the Managing Agent which administers the service charge account.

                      The Managing agent has to comply to the RICS Residential Management Code which you can find and view online..

                      Comment


                        #12
                        Originally posted by Gordon999 View Post
                        If all leaseholders are members of the same freehold company, you should consider getting on the board as director and changing the Managing Agent which administers the service charge account.

                        The Managing agent has to comply to the RICS Residential Management Code which you can find and view online..
                        I'm already a member and director of the freeholding company. I want to split the company so that we manage our own building on our own.

                        It doesn't make an awful lot of sense for me to be making decisions about a building I don't live in, and vice versa. I don't need to know what sort of carpet they want, nor do they need to know what light fittings I want. That sort of thing.

                        And I'd rather not pay for the maintenance of their roof, or their door entry system, or whatever it might happen to be.

                        From a selfish point of view, their building is significantly more expensive to maintain. Also, I'm happy to organise and do a load of stuff for my building, but I resent doing it for the other building just because none of them feel inclined to do so.

                        An amicable divorce is what I'm after. But there are some complications due to shared parts, such as a driveway and a car park.

                        Comment


                          #13
                          I don't see why you are trying to complicate matters, the Company owns the freehold and the lease explains how you should allocate charges. You have a duty as a director to act in the interests of all members,

                          Comment


                            #14
                            Originally posted by eagle2 View Post
                            I don't see why you are trying to complicate matters, the Company owns the freehold and the lease explains how you should allocate charges. You have a duty as a director to act in the interests of all members,
                            Once more, you don't really seem to be following what is being asked here. That comment is totally irrelevant to what is being asked. The legislation was passed because it was deemed reasonable by Parliament for leaseholders to be responsible for the property they live in. The fact that I am already a director of the company doesn't trump that. You don't really seem to understand either the detail or the intent the legislation so - respectfully - I'd be happy if you refrained from commenting further as you really aren't adding any value to the conversation.

                            Comment


                              #15
                              Surely all you need to do is declare independence and takeover the management of your block as a RTM company?

                              Who owns the freehold is irrelevant.

                              Comment

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