Share of freehold - being a company director

wessexw

I'm looking to a buy a flat at the moment, share of freehold would be good but I've been reading up learning that these are usually organised by the freeholders setting up a company and all becoming company directors.

Now in the past I set up a company and was the director while I had a spell self employed and I hated every second of it. I got in to all sorts of trouble with the HMRC due to not having a clue what I was doing, I got rid of the company soon as I could and vowed never to touch having a company ever again.

But here Im learning the have share of freehold seems to equal being a company director. There is there any way to have a share of freehold without being a company director?

Richard_Webster

Not all shared freehold buildings are owned by companies - although if they are not there different problems that I won't go into now.

If there is a company it depends on how they set it up and how many flats there are - if only 4 flats then it is generally sensible for all flat owners to to be directors - but if there are 30 flats then most people won't be directors. With a small building you will want a real say in the running and the others are likely to think that it is a bit weird you don't want to get involved - they may then make decisions without consulting you!

SimonMrGreenWard

Yes. Entirely depends on how it's structured. Majority of freehold flats don't have a separate company with which you need to be a director. (In this area anyhow)

wessexw

Thanks everyone, I went back to view it this afternoon and asked how the freehold is set up, they said that there's no company at all, nobody pays any kind of management fees or anything bar splitting the building insurance. If something came up that needed doing they'd just decide amongst themselves and split the costs.

Now something like that sounds perfect to me and my hatred of being involved in a company but I suspect that that kind of arrangement is not the best in legal terms?

wessexw

So is the above a viable way of doing a share of freehold anyone? Thanks!

BitterAndTwisted

Yes, friends of mine own a flat in a 4-flat property and have the same arrangement. Don't forget that you'll need to set aside some funds on a regular basis in case a new roof is needed or something equally pricey comes up at some point.

Richard_Webster

Up to 4 individuals can have their names as registered proprietors of the freehold title of a "shared freehold" building, or a company can own it.

If you have a company, then the company owns the freehold and when a flat owner sells his lease the company still owns the freehold so the legal title to it doesn't change - only the membership of the company.

With literal shared freehold you need the others to sign to transfer the freehold to themselves and an incoming flat buyer when a flat changes hands. You cannot just sign over the "shared freehold" to the buyer without the other co-freeholders joining in.

If one of the co-freeholders is having a dispute with the others about something, he may use refusal to sign as a negotiating ploy, or worse, he may have disappeared and had his flat repossessed and be uncontactable.

Jowo_2

I wouldn't have a clue how to submit my accounts to HMRC and Companies House paperwork without the support of my accountant who gives me structured spreadsheets to list my income and expenses, who sorts out my VAT, provides guidance on the regulations and issues me with reminders when payments and submissions are due....