Shared Freehold becomes Management Co

eric222_2

I own a third of a shared freehold house (3 flats in total) and we do not have a management company in place. The lease issued to all freeholders is pretty useless and now needs renewing.

2 questions...

1) Rather than simply extending the old lease it looks like the other freehold owners now agree to us setting up a company owned by us to manage the place. I understand the company formation part, what I'm not sure about is the new lease and constitution. Do we need to make these up from scratch, get a lawyer to draw them up for us or can we use pre-existing ones?

2) If one freehold owner objects to us setting up a management company, can the majority overrule them?

Thanks, Eric

Fire_Fox

Welcome to MSE! Everything leasehold here:
http://www.lease-advice.org/publications/

eric222_2

I saw that site in my searches but couldn't find anything that related to already owning the freehold and needing to replace old leases and set up a management co. Did I miss something though?

Fire_Fox

The LEASE site is huge, if you just glance over it you will miss all sorts. They have a free (and very helpful) telephone advice line, but please don't use it for basic questions as they are very stretched. Do not underestimate how much work self-managing is, the hours of reading to get your head around the legislation is only a tiny fraction.

Free advice booklet 'Application to the LVT' contains sections on varying leases, there is also a mine of information under 'The Right to Manage' (I know you are share of freehold). Or try clicking from the Home tab takes you to the wizard, click 'I own a flat', 'I own a share of the freehold', 'I want to change a term in my lease'.

Setting up a managment company is the same as setting up any other company, so research that. A quick Google found this:
http://www.flat-living.co.uk/information/rmc_index.htm
No doubt you will also need to pay for professional advice.

eric222_2

I understand the company side and already have a ltd co formed for my business. In this case the company would be made dormant. On the LEASE site I could find nothing about the situation of already owning the freehold and wanting to form a company, including both searches and using the wizard.

Richard_Webster

If three of you own the freehold you can set up a management company if you want but unless you transfer the freehold to it (which requires all to sign) you've just spent money on setting up a company for fun, because it won't have any legal status.

All three of you can grant new leases to each individual if you want, or once the freehold has been transferred to it the company can do this. Don't try doing it yourselves using a standard form - it is bound not to be completely appropriate for your particular situation. You do need a solicitor to do it to avoid problems later.

Please don't confuse a management company with a managing agent (which could be a company, e.g Solitaire, Simarc, Peverel OM, etc and many local estate agents who do property management as a sideline or even their main business) but who/which essentially acts on the freeholders behalf to collect service charges and organise work, but is only an agent of the freeholder and has no legal rights as freeholder or leaseholder itself.

eric222_2

Hi Richard

Is this something you could help out with in a professional capacity? Any range of costs that might be expected for such work?

Richard_Webster

I'll PM you.