Flat Management Company

pdc83

I have a bit of a problem which I would greatly appreciate if somebody could help...

I own a flat which I am trying to sell. There are two blocks of flats each with four flats per block. I have accepted an offer for my property but the buyers solicitors have advised the buyer not to buy because of the 'Management Company'.

The problem is that there isn't a management company! When the flats were built in 2006, the builder set up a company that was dissolved in 2009. In 2009 one of the owners of the flats set up a new company. Unfortunately, he died last year and consequently, the properties he owned were repossessed and further consequently, his management company was dissolved.

What should or can I do? Is it worth setting up a company myself so the sale can go through? Or does there legally have to be a management company in place for a sale of a property?

I'm really stuck and not sure where to turn to, just like my solicitor!!

G_M

So who has been insuring the buildings?

Who has been paying the electricty etc for the common areas?

Who has been doing the maintenance?

Has the ground rent been paid? To whome?

Time to get together with all the other leaseholders, establish who now owns the freehold, and put a new solution in place
a) so you can sell
b) so the buildings get looked after
c) so others can sel

pdc83

Thanks for your reply, answers to your questions below -

One of my neighbours has taken care of the buildings insurance.
There are no common areas as each flat has its own entrance.
We generally do the maintenance ourselves as there is only a small portion of garden and a carp park to taker care of.

As for ground rent... None has ever been paid in the 6 years I've been living here.

What I don't understand is that one of the flats that was owned by the guy who died, was reposessed & nothing has been in place since then so why hasn't the new owner had any trouble?...

G_M

Time to get together with all the other leaseholders, establish who now owns the freehold, and put a new solution in place
a) so you can sell
b) so the buildings get looked after
c) so others can sell

Check the freehold Title at the Land Registry.

pdc83

Thanks for your help.

I really appreciate it.

Richard_Webster

Does the original management company's name appear in the leases of the flats and do the leases say that that company has to insure and maintain the building? Did that company own the freehold or was there and is there a separate freeholder?

pdc83

Yes, on the lease it does state the management company. The original company was dissolved and since the death of the second management company (under the same name) director, this has also been dissolved. I have checked on the land registry website & a company checker website also.

pdc83

The original management company & the builder of the flats (who formed was in the original management company) own the freehold. Is this any help??

Richard_Webster

You need to be very clear here.

1. Is the freehold title actually held jointly by an individual (the builder) and the defunct management company?

2. In the leases who exactly is it that covenants to maintain and insure the structure and common parts of the building?

Please be clear as to the distinction between:

a) a managing agent who simply acts as an agent of the freeholder and may well do the work on its behalf and if a company is often referred to as a management company on the one hand; and

b) a management company that in its own right has obligations under the lease which are separate from those of the freeholder.

Please let us know answers to 1 & 2 and whether a) or b) applies.

pdc83

1) On the first page of the land registry plan it states that the registered owner is the management company. Like I say, the builder was the effectively the management company.

Further down on the same form under the title "Title Absolute" it states a transfer of land between the builder and management company.

2) The management company is responsible for insuring the building only etc. There is a strong chance that the building may no longer be insured. We all gave a cheque to the neighbour basically who was secretary to the newer (dissolved) management company.

I cannot say for sure what it states in the lease because my solicitor has the lease.

Effectively, the original management company was the freeholder.

I can say for sure that a) does not apply. i am not sure of the answer for b)

I'm a tad out of my league when it comes to the legal jargon as you can see! :-(

Richard_Webster

Unfortunately the precise details do matter and without accurate information we are just speculating and there are a number of possible scenarios

If the original management company owned the freehold then the freehold is probably now held by the Crown as part of the assets of a dissolved company and any new company set up by the flat owners would have to apply to the Treasury solicitor's Bona Vacantia Department to buy the freehold from the Crown.

Randomly setting up a another company with a similar name doesn't really solve anything without it acquiring the freehold because that company will not have any legal obligation to do things like insure and maintain the structure nor the right to collect money from the lessees.