Buying share in an existing management company

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    Buying share in an existing management company

    I'm a FTB and am totally confused about my lease. I put an offer in on a flat in Beckton East London and was told by the EA that the remaining lease was 100 years. I wanted the EA to confirm this as she had been vague about quite a few aspects of the flat and she reluctantly told me three days later the lease is actually 76 years. I requested the seller to extend the lease but she wants a quick sale and said she contacted the management company (Andrews of Bristol) and they said I'm able to buy a share of the freehold. I was a little unsure so I phoned the management agency and they confirmed this and said I wouldn't even have to wait the 12 months I had been advised by LEASE.
    I have 3 questions really:
    1. If you weren't part of the original tennants who set up a residents association and bought shares in the freehold- do you have the same rights in buying a share of the freehold and could you ever be refused?
    2. Does buying a share of the freehold mean you don't have to worry about extending the 76 year lease?
    3. It's an old Barrats home: Would Barrats be my freeholder or do they normally sell their blocks after building them.

    #2
    I suggest that you-

    1. Get a copy of the registered title for the flat and also for the freehold. ( cost is about 4 pounds each) from the Land Registry. This give the unexpired term of lease on the flat and name of the freeholder.( expect a company listed at Companies House where you can get the shareholder information - name of directors and number of shareholders who own a share of the freehold ). Check freehold company name is same as the freeholder shown on the annual ground rent invoice .

    Note- The Residents Asssociation may not be the freehold company if some flats did not participate in buying the freehold.

    2. Try to contact the company secretary of the freehold company and ask (1) cost of buying a SOF and (2) if the leases of the flats with SOF have been extended and get details etc.

    Comment


      #3
      In answer to the orginal questions.

      1. The freehold is normally owned by a company which was set up by the participating tenants when the freehold was aquired by them. Each tenant is then a shareholder in that company. so it is a share of the company they own strictly speaking, rather than a share of the freehold.
      If you or your predecessor was not one of the participating tenants then you have no right to a share of the company and the existing shareholders do not have to sell you a share. Perhaps more importantly if they are willing to sell you a share the price is completely negotiable.
      2. Even if you have shares in the company which owns the freehold, your lease is a different matter. You would still be leasing the flat and the term of the lease would not change just because you aquired a share of the freehold company. However, you would still have the same rights to extend the lease and if you could not agree a fair price you could take your case to the LVT.
      3. Do a search online at the land registry. It will cost you £2 to find out who owns the freehold.
      NOTE: Steven Palmer BSc (Hons) MRICS MBEng is an official LandlordZONE Topic Expert and a Director of Davisons Palmer Lim Any advice given by Steven in this Forum is of a general nature only and should not be acted upon without first obtaining advice specific to your problem/situation from a professional.

      Comment


        #4
        Thanks for your help SteveP and tenant29. I looked at the lease and it looks like the freehold is owned by the management company and the original freeholder. I have asked my solicitor to make arrangements for me to buy the share in the company and find out the price.

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