Buying a share of a freehold?

Sandtree

I've never bought a share of freehold property but shouldn't the contract of sale have specified that the payment was for 1) realignment of the leasehold to yourself and 2) sale of X shares in Your Building Ltd ? 

The directorship is a bit of a red herring and certainly in the flat we rented that was share of freehold not all that took part in the buying of the freehold became directors and indeed some leaseholders didn't participate so the circa 150 flats in the development 120 or so own 0.8% each and there are 4 that are directors plus one non-owner director. 

Is the problem that the vendor isnt confirming they've sold their shareholding to you or that the company (which the vendor may be a director of still) isn't doing its paperwork to recognise the transfer?

Slithery

proformance said:

It seems like trying to persist with the old solicitors and get them to complete what we paid them to do is like banging our heads against the wall. They won't even answer our calls anymore.

But this isn't what you paid them to do. As you pointed out earlier they had no knowledge that you were buying a share of the freehold because you didn't tell them about it. All you have paid them for is the conveyancing of the leasehold which they have done.

eddddy

Essentially, it sounds like the situation is as follows:

• You want to be registered as a shareholder (and probably a director) of the freehold owning company
• The seller needs to be removed as a shareholder (and director) of the company
• The neighbour needs to be involved to sign documents

But 

• This offers no real benefit to the seller and the neighbour, and maybe they don't really understand it - so they are refusing to cooperate.

• It gives a benefit to you - but perhaps you don't fully understand the process.

• You probably have no way of forcing the seller and neighbour to cooperate - your only option is to try to persuade them, and/or rely on their goodwill. And make the process really easy for them.

In your position, I would start by getting a clear understanding of what needs to be done - who needs to sign what form etc, and why.

Then explain to the seller and neighbour why each form needs to be signed. Maybe they'll then agree. But maybe you want to pay a solicitor to check the forms.

It's also possible that the seller and neighbour will want their own solicitor(s) to advise them. Realistically, I guess they'd expect you to pay for that.

Or maybe you can instruct just one solicitor acting for the company, who can oversee all this.

NameUnavailable

Or, start writing to the previous owner who is now your part freeholder holding them liable for maintenance of the property, carrying out H&S and fire risk assessments etc..... they may realise that they don't actually want that responsibility!

Tiglet2

proformance said:

Hi all,

Sorry to revive this as I know it's quite an old thread, but I am still having issues getting this resolved by our initially instructed solicitors (who did the sale).

Since March when we completed, we have been trying to get hold of them to process the transfer of the "share of freehold" from the old owners to us.

Having said that, the one other freeholder (the owner above us) has also been really unhelpful as things have transpired. Apparently our solicitors sent him an email last month that he has basically ignored.

Instead, when I asked him if he had heard from them, he just replied saying "Sorry, I forgot to. Just tell them to issue the execution of share transfer from the old owners". 

It seems like trying to persist with the old solicitors and get them to complete what we paid them to do is like banging our heads against the wall. They won't even answer our calls anymore.

Is it possible we can advise a new solicitor? Or are these guys legally obliged to help us here? We surely don't want to have to pay AGAIN for a service which was supposed to be provided in the first place?

Thanks in advance,

Z

I think you need to establish what kind of freehold was involved here.  The bit in bold above may suggest that a management company (of which you become a shareholder) is not the set up here.  

First of all, if you have a copy of the freehold title, can you confirm who is the Registered Proprietor?
If you don't have a copy of the freehold title, please pay £3 and obtain it from the Land Registry here https://eservices.landregistry.gov.uk/eservices/FindAProperty/view/QuickEnquiryInit.do

Look at the freehold title and confirm to us whether the Registered Proprietor(s) are named as the neighbour upstairs and your previous vendor, or something else?

A 1% share (with Share Certificate) in the Management Company who, either, owns the freehold or manages it on behalf of the freeholder, would not require additional conveyancing, because the management pack would include instructions on how to apply for a share certificate in the new purchaser's name, together with any fees payable to do this.

A freehold that is owned 50/50 by the two leaseholders is not the same.  In this case, extra conveyancing would be necessary because the solicitor would have to draft the transfer documents for the freehold title as well as the leasehold title.  The Transfer (TR1) for the freehold title would list the freeholders (including your vendor) as the Transferors and the freeholders (including you) as the Transferees.  All named people would need to sign and be witnessed.  After completion, the solicitor would need to make an application to the Land Registry to update the freehold title register.  As you were also buying the leasehold title, there would be two transfers and two applications. 

It is important to note that in some set ups where a freehold property has been converted to two flats, that there might only be one freeholder that owns the entire building and is not willing to sell part of the freehold. In which case, owning the freehold was never part of the deal.  Therefore, it would have been important to make your solicitor aware that you thought you were buying both the leasehold and freehold, so that the solicitor could make appropriate enquiries.  

It does sound like you instructed your solicitor to purchase a leasehold flat and never raised any queries over the purchase of the freehold.

If I were you, I would certainly go back to your previous solicitor and ask them to open a new file to purchase the freehold, provided of course, that the freehold title was in the previous vendor's name.  This will incur a further conveyancing charge, but it would have done at the time of purchase anyway as this is a second transaction and would have been additional work.

wend33

I agree with Tiglet2, you cannot assume that the freehold is held by a company, they can often be held by the named tenants of individual flats and as such a transfer will need to be completed to remove your vendor and add yourself. Need to establish the situation first before seeing how to proceed.

proformance

Hi all,

Thanks for your measured responses and advice here.

To help form a clearer picture, here are some other pieces of info:

1) There is indeed a management (ltd) company with 4x equal shareholder directors (the existing owners of the other flat + the couple from whom we bought our property)
2) The "other" freeholder was the one who initially suggested that HE himself would add us as directors to the management company
3) In a separate process (and perhaps dependent on point 2) it appears that SOMEONE (who?) needs to exercise the "share transfer" from the OLD owners (from whom we bought the property) to us (again, it was the other freeholder that was the one who suggested that we need to do this)

Regarding the "contract of sale" - While the sale was advertised (and confirmed in writing by the "agent") as a "Share pf freehold" arrangement, it might have been our fault for not checking the MOS (memorandum of sale) thoroughly enough between the selling Agent to our solicitors when initially initiating the transaction. First-time buyer's mistake.

AdrianC

It's the CoSec of the Ltd who needs to produce the paperwork for the share transfer and for the directorship appointments.

proformance

AdrianC said:

It's the CoSec of the Ltd who needs to produce the paperwork for the share transfer and for the directorship appointments.

Thanks.. How do I find out who the CoSec is for a given ltd?

AdrianC

Companies House will show you who all the officers are.