Share of freehold - members entitlement to non-members lease extension.

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    Share of freehold - members entitlement to non-members lease extension.

    First time poster - please be gentle!

    I own a share of freehold in a block of 14 flats. Including myself, 10 of the 14 leaseholders in the block are members of the freehold. The other 4 leaseholders declined to join the new freehold company when it was purchased from the previous landlord in 2012. The original 10 leaseholders covered the extra cost of the 4 non-participant flats.

    The 10 members formed a management company and self manage the block. Generally, everything works very well and we all get on.

    I purchased my flat (and share of freehold) in 2013 from one of the original members. This is true for one other current member. The remaining 8 freeholders are all original members.

    The remaining 4 non-shareholding leaseholders each have around 70 years left on their lease, and earlier this year one of them asked to extend their lease. A price was agreed at £24000 between the management company directors (3 of the members) and the leaseholder, and the other freehold members where informed that we could expect to recieve £2400 each, before tax.

    However, I have recently been informed that because I am not an original member and did not participate in the purchase of the building freehold (specifically of the 4 non-participant flats), I am not entitled to this lease extension payment. I am informed that this information is based on advice from the company solicitor.

    Please could you advise me if this is legitimate and fair?

    Many thanks

    #2
    On the face of it it sounds quite wrong. I think the solicitor needs to explain why.

    Comment


      #3
      What is the capital structure of the company or how many shares were issues are there two classes of share capital

      Comment


        #4
        Originally posted by flatpackman View Post
        What is the capital structure of the company or how many shares were issues are there two classes of share capital
        Such a thing is possible, but surely not a for a management company.

        Comment


          #5
          Originally posted by flatpackman View Post
          What is the capital structure of the company or how many shares were issues are there two classes of share capital
          According to my membership certificate, the company does not have a share capital and is limited by guarantee. As far as I'm aware, everyone is 'equal'.

          Comment


            #6
            In that case you need to look at the company's articles. Some companies limited by guarantee cannot distribute profits at all. I would be surprised if the articles provide that the profits could be shared between some members and not others.

            Comment

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