Can a leaseholder with a share of freehold fill out the LPE1 form themselves?

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    Can a leaseholder with a share of freehold fill out the LPE1 form themselves?

    A solicitor has advised a leaseholder in our building that they can complete the LPE1 form themselves.

    The leaseholder concerned is a nightmare character who, going on past behaviour, would be very likely to conceal or misrepresent information the LPE1 asks for.

    I'm concerned that as the sole director of the company which holds the freehold of the building on behalf of five leaseholders who jointly own it, I can be held liable for statements the leaseholder makes on an LPE form.

    The building is an old house converted into six flats. Five of the six flats own a share of the freehold and we run the building ourselves. The Company is constituted just as a standard landlord company and the leases are rather old fashioned (drawn up in 1980s). The only reason I am the sole Director of the Company is that I live here and own one of the flats and that the others are blatantly too dodgy or feel they are not capable to take it on.

    I understood that when one of the flats is being sold, leasehold enqury forms could only be completed by the company , i.e someone who is serving as a Director of the Company, and not by the individual leaseholders themselves.

    However the leaseholder's solicitor has written to me stating that as the company holds the freehold on trust for the leaseholders, who each own one share in the company, therefore the leaseholders can represent the company!

    Could any kind person advise me on the point of whether the leaseholders can claim to "represent the company" in terms of filling in the LPE forms? Surely that would make a nonsense of the whole point of having a company with company directors, those directors being legally liable for any claims made on behalf of the company/actions of the company? The leaseholders can't for example, enter into contracts on behalf of the company, so I am baffled by why their solicitor is claiming they can fill in the LPE forms themselves?

    To give you a flavour of just how dishonest these leaseholders are, they have done things like structural alterations without permission, using black market builders which did not comply with the Building Regs, they also sprang a large gas leak and nearly blew up the building, they've mucked up the Fire Safety Protected Areas by putting in electrical installations that shouldn't be there, without permission etc etc. They get very very nasty and threatening with me when I have to pull them up on all this stuff each time, shouting and screaming and making threats. Also, I managed to get a survey of the bulding done and this highlighted a crack in the wall and possible movement of a large beam over their kitchen window, which the survey said should be monitored. The leaseholders have painted over the crack (again, their lease prohibits them painting the exterior walls but they just did it anyway). If they fill out and return enquiry forms themselves, I am sure they will lie about this and try to conceal it. As I understand it they would be liable for fraud if they do so, following a case where a seller painted over some dry rot? I'm concerned that I could also be held to be liable for false or misleading statements that they make "representing the company" in the sale of their flats.

    I have told their solicitor that I want any enquiry forms that would usually be filled out by a landlord or freeholder to be sent to me and that I will return them to the solicitor directly but from their response it looks like they are not going to do this.

    Would be very grateful for any advice please.

    #2
    A lessee with an ordinary shareholding cannot speak on behalf of the Company or the freeholder.

    Having said that there are many examples of rogue Directors of "share of freehold" Companies who bully their fellow lessees, and who hold them to ransom in various ways.
    So my question is why would they have felt the need to want to bypass you (in this form filling and their other heinous acts - since they have no obligation to spend their own money on solitary repairs of the building why are they feeling the need to do that at all)?

    Unless of course the articles say that everyone is a Director and you are preventing them from taking the role.

    Comment


      #3
      Originally posted by AndrewDod View Post
      A lessee with an ordinary shareholding cannot speak on behalf of the Company or the freeholder.
      Thank you for offering that reply. Could you possibly let me know where I could find this point covered in a legal textbook or reliable source?

      I had thought myself that this had to be the case under Company Law. The leaseholders' solicitor however seems to be making out that there is some special case in the situation where the leaseholder also holds one share in the Company (share of freehold) that gives them status to "represent the company", and that this is because "the Company holds the leases on trust for the lessees". Logically that sounds like nonsense since it would make it impossible to run these companies if any leaseholder could claim to be representing the Company, enter into contracts etc.

      The solicitor who wrote this letter is a Partner claiming to specialise in property law in a smallish firm and claims to "regularly advise high net worth clients and celebrities"....

      Comment


        #4
        LPE1 CLEARLY STATES a leaseholder can NOT fill in this form unless authorised to do so, so clearly you have not given authorisation, and only a foolish / inept freeholder would give authorisation, but he can't, as its the freehoder that issues and authorises assignment of leases ( or the parties in section one )

        Old form from www.lease-advice.org/files/2016/08/LPE1.pdf

        see top of page 1
        These enquiries are asked on behalf of buyers. The Seller should only respond to these enquiries if they are the Landlord, the Management Company, the Managing Agent or the Residents' or Tenants' Association or are representing any of them
        .

        new form from the Law Society
        https://www.lawsociety.org.uk/suppor...specimen-form/
        see top of page 2
        The seller should only complete this form if they are, or are appointed to represent, one of the parties in Section 1
        ( Landlord / Managing company / Managing agent / Residents - Tenants association )


        Q.E.D. -
        R.a.M.

        Comment


          #5
          I would write to the solicitor pointing out that the views expressed on the LPE1 have not been complied by the company and without its authority and therefore will not be bound by any representations made in it

          Also advise that should the purchaser feel they have been mislead by the LPE1 that you will refer them to the letter

          Send it by recorded delivery to the solicitor and the vendor

          The estate agent handling the sale may if asked let you have details of the purchasers solicitors in which case a copy of the letter to them would most certainly do the trick.if not send your letter to the agent and ask them to forward it to the purchaser

          Comment


            #6
            OP has still not explained why the sellers solicitor felt the need to take this route.

            Comment


              #7
              Originally posted by AndrewDod View Post
              OP has still not explained why the sellers solicitor felt the need to take this route.
              In my many years of assigning leases, I have found that ALL do not observe the law, the lease, the rules and regulations etc etc, and just want the money, quickly.

              recently they have sold a flat without the freeholders permission to assign, when it clearly states in the lease that permission must be obtained, so i threatened to change the common entrance door locks to the flats.
              ( of course the lock just happened to fail two days before move in date )
              The solicitors / agents then jumped into action.

              marinagirl,
              Fill in the LPE1 form yourself, and expand on section 6.2, stating the breaches of the lease you mentioned in your first post.
              You can say briefly on the form that there are current breaches of the lease, and are shown on appendix "xx" attached ( stapled ) to the LPE1.

              Your covering letter will include ( and also stapled to the LPE1 form ) that no one has your permission to fill in the LPE1 form, and if the persons refusing to accept the form from the managing agent (you ) or the freeholder will be in breach of the law, and if a leaseholder of the flat fills in the form, that will be seen as fraud, as they are not the representative of the freeholder or agent.

              Does the lease state that authorisation to assign the lease to the prospective seller, has to be obtained ?
              If so, I hope you have refused to grant due to breaches of the lease.

              Note, YOU have to get permission from the freeholder to assign the lease, so hope you have authorisation from the freeholder to administer assignments, as only you know whats going on, and therefore the freeholder should say, "Well, as you know whats going on, who may not have paid the service charges, who has breached the lease, he authorises you to assign lease's as you are the only person who will have all the facts to be able to fill in the LPE1 form.

              to reiterate.
              Fill in the LPE1 form and send it to those concerned.
              But also state that by filling in this form, is not autorisation to assign the lease.
              ( don't say any more, not even we will consider if you accept the form -- trust me, they can "get you" if you "imply" authorisation would be granted If they do this that or the other )

              You have a printer, so get busy

              Comment


                #8
                As I doubt this has been raised by the OP as a point of principal, there are likely underlying issues here which means the leaseholder filled in LPE1 would be different to the company director filled in LPE1.

                OP, It might be worth giving further information.

                Comment


                  #9
                  Hi. You are sole director of an RMC with 5 member flats and 1 non-member? Your first question is if you can be held liable for a statement a leaseholder makes on an LPE1? How would you be if you did not authorize it?

                  Is the seller also a director? Does the articles allow any director to act alone?

                  Answers above confirm that an ordinary shareholder cannot bind the company/speak for the company, any more than he/she could incur costs in the name of the company, borrow money in the name of the company, take somebody to court in the name of the company, or extend their own lease in the name of the company, or do anything at all to bind the company, other than exercise a vote per the articles.

                  What you describe as: " the others are blatantly too dodgy or feel they are not capable to take it on". Have you been elected by the member flats as sole director or just sort of taken over? Who decided they were dodgy? Is your term of office legal and valid? Do the articles allow only one director?

                  If you have revealed all the facts, the seller's solicitor seems willing to rewrite company law for their client. The flaw in the ointment is that the buyer's solicitor will want the registered freeholder's answers.

                  Who is the registered freeholder? The company right? Even if the seller were a director, he/she cannot act for the company unless the articles allow one director to act alone. Where would that end?

                  Does this partner solicitor also opine that the buyer can register their own assignment and forgo a notice to the freehold company?

                  Have you held up filling in the LPE1 form so that they decided on this course? Have you demanded a reasonable fee?
                  Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                  Comment

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