Buying freehold - becoming a director

manic

I am just in the process of buying the freehold of my flat.

The solicitor has asked if I am prepared to be appointed as a Director of the company. What will this entail?

Also, does the fact that I'm already Director of my works Limited company cause any problems?

courtjester

As a director (presumably of a management or non-profit making company holding the property freehold) you take on certain (joint) responsibilities with the other directors for the proper running of that company. Whether it entails you doing anything depends on how the company is managed - these tend to be rather like residents committees rather than a commercial operation of course, so it is a lot less formal.

The essential responsibility is keeping of accurate accounts and making an annual return.

When you are appointed as Director you will be required to sign the relevant Companies House notice and declare other directorships. Other than that, I don't see why it should affect your existing work's directorship.

Hurdler

I live in a block of flats where we did just that - only 12 flats and I 9along with 2 of my neighbours) volunteered to do the director thing.

Word of warning... we're all v v busy people and after getting caught up in inevitable neighbourly squabbles and also having to do a LOAD of paperwork, we decided to turn it over to a managing agent - thankfully one of the directors (who was an estate agent) used to work for them.
Initially 9because we'd been burned by useless managing agents before) we wanted financial control but after I got ubelievable hassle for official accounts - we handed EVERYTHING over - but it helps to be the focal point when you DO go through with the purchase for the solicitor to speak to one person. It also helps to have a small committee to help guide residents meetings.

My advice is do it to get the freehold - very worthwhile - and then hand it off to a reputable managing agent - one fairly local to you who can come out and meet up with you guys and at least keep a physical eye on the place.

matmad

We are a block of 12 flats and we manage ourselves sucessfully. BUT, it took a fine of £3000+ from Companies House for late filing penalties before we finally organised ourselves properly.

You will really need to take your responsibilities as a Director seriously and do your homework about exactly what paperwork and accounts you must submit.

The problem is usually that everyone is happy to let one or two people do all the work - and there is a lot of work! If you don't know what you're doing, or you don't want to commit too much time, you should probably consider a managing agent.

On the other hand, if you can get together a band of reliable and committed residents and have regular meetings, it is possible to do and very rewarding.

I am not a director - my husband and a neighbour are - but I do all the other things involved in keeping things running smoothly. It takes up a huge amount of my time doing everything from keeping accounts, collecting service charge, resolving disputes, flat sales info, weeding, and a million other jobs - you name it!

I do take a small payment for my time now, but for ages I did do it for nothing. The only things that keep me at it, are that I have a vested interest in the smooth running of things, and I know we would never find a management company that would be so hands-on.

So, it works for us now, but we found out the hard way.