Shared Freehold – Inadvertently took on the company director role?

Most interesting. I await replies.

Withiut sight of both the freehold and leashold titles it is very difficult to comment.

Why not draft a document ie. deed, that states each freeholder is obligated to pay their 1/8th share for upkeep of communal areas and which will be demanded on x date annually. I’d make the date the same as the ground rent date. Date it and All sign it with each Freeholder signature 3rd party witnessed.
Shouldn’t cost very much and actually simple to draft.
But check your lease as there may well be a clause referring to Landlords (ie Freeholders) obligations.

As leaseholders the block buildings insurance should cover communal areas I would have thought.
Interesting that you say your solicitor says next buyer solicitors may not notice! Hence why I do my own conveyancing lol

The freehold company should be insuring the block as a whole and each leaseholder should be billed for their share. This then provides cover for all the communal space as well as the individually leased areas. It’s common in these sorts of situations that individuals just get on with their own thing as regards insurance, but it’s not correct and can cause problems. I’d suggest you do some research on freeholders responsibilities and obligations and look to rectify the issues. Whilst it will be an effort to undertake, it’s necessary. You need to examine the wording of the current leases and take advice as to whether the terms are sufficient to meet the needs if they were properly enforced and if so enforce them. You are the director and things need to be done right to protect each of the leaseholders from their own naivety. You may find the leasehold advisory service helpful, they can perhaps highlight the risks of not changing the setup so you can use that information to convince the other leaseholders of the dangers of their current situation. https://www.lease-advice.org/ what happens for example if a guest/member of the public were to be badly injured or killed on an uninsured common area? if your current solicitor is looking to charge an excessive amount to carry out the work you should shop around. I believe a lease can be amended by an additional agreement being drawn up and registered at HMLR. It really shouldn’t cost many thousands of pounds. We’ve done it quite cheaply in the past using a small local solicitor.

I am a retired (non-conveyancing) solicitor and find the solicitor's comment "My solicitor has said it may happen with the next potential buyers, it all depends on how deep they look into the freehold etc." wholly unacceptable but sadly true from my former practice in professional negligence and disciplinary (SDT) work. That solicitor seems a negligence claim in waiting?
Ask Property118 for a recommendation depending on your location.

Have you looked into the Company at all? I may be wrong but, from what you have said and without having looked at any documentation, that the likelihood is that the Company was set up by the original developer and they would normally have required each flat owner to hold a share in the freehold company.

No doubt each of the leases will state that (a) the Company is under an obligation to insure the common parts etc regardless of what has actually been happening; and (b) that the owners of each of these flats have to contribute towards the insurance etc; (c) the leases will also likely contain forfeiture clauses allowing you to take forfeiture action if the tenants do not make the payments due under the leases within 14/21 days normally.

This is not a lost cause by any stretch and, to be honest, is not even that difficult to get sorted you just need a bit of time and be happy to ruffle a few feathers if the other flat owners do object to doing things correctly - but as you are selling you may not care!

If you want some help with this respond with your email and i will contact you to discuss. You may just want me to review the leases and give you a POA and let you carry it out (which is fine) or alternatively you may say can you just deal with it which is also fine. Either way, its unlikely to cost thousands of pounds and i will tell you why, if the leases do (as i think) require the flat owners to contribute towards the Company's expenditure, the first thing we will be doing is sending a letter to each tenant telling them what needs to be done and pointing out that if they don't do it the Company will incur more and more legal costs and they will be liable for a % of that under the terms of their lease and failure to pay when demanded will result in forfeiture proceeds!

Honestly, i wouldn't worry about this at all it really is not that difficult...i do agree with Blodwyn though...you may need a new lawyer.

Hope this helps, Charles

It is not impossible (although unusual and not very practical) that each property has taken out their own insurance which should if properly declared cover the communal areas. I have a property set up just like this, and have never had an issue with sales and purchases. We now join forces and insure as a block but we previously each had our own. Presumably your house in insured so ring your insurance company/broker and ask. No need to get involved with the leases at all (although you probably should find out what they say) just if necessary combine the insurances which can be done as each one is renewed by any decent broker.

Reply to the comment left by CMS at 27/05/2022 - 06:29Hi Charles
The properties are two bed semi detached house in a four block. It has never had insurance in place for the whole block. Just individual buildings insurance by each owner because they are houses. There is a shared carpark to the RHS of the blocks and each owner has their own legal designated parking space that’s numbered. We have sold the house and all the checks and surveys have gone through. Its just the queries on the following questions.
1. Are you able to let us have accounts for the last 3 years ? Or is the service charge just paid into 1 bank account.
2. Please let us have a copy of the Buildings Insurance Schedule ?
3. Please confirm if there is a Lease Notice fee that needs paying on completion of the Purchase ?
4..Please provide any post completion requirements fees, documents required et
5. Bank Details for the payment of any Lease Notice Fees
6. A copy of any Fire/Asbestos Risk Assessment
The Solicitors have repeatedly informed them of the situation with the shared freehold, and that each house owner has their own buildings insurance, and as for a management company, and that there isn't one as such that my father reluctantly took on the role of company director as there wasn’t one, which as previously it got into such a mess years ago that it was rectified by a local accounts company and all the debts were sorted, so my father agreed to submit the accounts each year so that it never got into arrears with company house ever again. And that all I have been making sure is the accounts are up to date, and they are until 30/10/2022. I ended up with this out of default because sadly my father died of terminal cancer rather unexpectedly.
Many Thanks
Lisa

Reply to the comment left by Lisa Peterson at 15/07/2022 - 09:09
Hi Lisa,

If these are four terraced houses then the buildings insurance being taken care of by each property owner, in practice, isn't really an issue but if it states in the lease that the 'freeholder should insure' some solicitors can be a little funny.

Are there any common parts owned by the freehold? Perhaps the parking spaces?

Do you have a copy of the lease that is trying to be sold? If so, message a copy to me on the new Message service and I will let you know how I would deal with it.

None of this is tricky so I wouldn't lose sleep over it - its just a pain in the backside more than anything.

If you can get it, message me (1) a copy of the freehold title and the title plan; and (2) a copy of the lease being dealt with.

I will help you if you like. Best, Charles