Buying a share of a freehold?

user1977

proformance said:

user1977 said:

proformance said:

Guys - can anyone help?

I've been asked by the remaining freeholder sharer whether or not the the shares in the freehold have been transferred to us by the old owners (whom we bought from), but HOW can someone just transfer shares from one to another without that person being on the Limited company?

Can anyone please advise?

I think you're getting this the wrong way round - you're not "on the limited company" yet because you're not yet a shareholder. Because your vendor still owns "your" shares. So they transfer their shares to you, and then you become a shareholder.

I've just seen that the old owners resigned from their appointments in September. Without telling us.

So, now it's just the other owners who remain as directors and shareholders of the company.

You can't just "resign" from having shares - what did they do with their shares, if anything?

proformance

GoogleMeNow said:

Did you ever purchase the freehold title at Land Registry to find out if the owner of the freehold was the management company or the named leaseholders?

As far as I see it, you need your solicitor to get in touch with the seller's solicitor (your vendor), so that the seller's solicitor can fill in the Stock Transfer Form, get the seller to sign it and provide the original Share Certificate and get the share transferred to you.

Hi 

Yes, we did this on day 1 and can confirm, it's the Ltd company that owns the freehold.

I've asked our solicitor to initiate and organise this since March through about 50 emails and 100 phone calls, but they are a very, VERY shady firm and will not touch our case again with a bargepole. 

In fact, I think we'd had a hard time contracting any firm to take this on for a reasonable price.

What should have been so easy (one would have thought) has turned into a complete nightmare.

Is there no way through without solicitors? 

proformance

user1977 said:

proformance said:

user1977 said:

proformance said:

Guys - can anyone help?

I've been asked by the remaining freeholder sharer whether or not the the shares in the freehold have been transferred to us by the old owners (whom we bought from), but HOW can someone just transfer shares from one to another without that person being on the Limited company?

Can anyone please advise?

I think you're getting this the wrong way round - you're not "on the limited company" yet because you're not yet a shareholder. Because your vendor still owns "your" shares. So they transfer their shares to you, and then you become a shareholder.

I've just seen that the old owners resigned from their appointments in September. Without telling us.

So, now it's just the other owners who remain as directors and shareholders of the company.

You can't just "resign" from having shares - what did they do with their shares, if anything?

Perhaps I shouldn't have presumed that then. More accurately, they have resigned as DIRECTORS from the Ltd freeholding company and I assumed thusly they'd have relinquished their shareholding.

Maybe that was my mistake - I have been conflating shareholding and directorship! I didn't think there was any other way of holding shares in a Ltd company, without being directors or employees!

user1977

proformance said:

user1977 said:

proformance said:

user1977 said:

proformance said:

Guys - can anyone help?

I've been asked by the remaining freeholder sharer whether or not the the shares in the freehold have been transferred to us by the old owners (whom we bought from), but HOW can someone just transfer shares from one to another without that person being on the Limited company?

Can anyone please advise?

I think you're getting this the wrong way round - you're not "on the limited company" yet because you're not yet a shareholder. Because your vendor still owns "your" shares. So they transfer their shares to you, and then you become a shareholder.

I've just seen that the old owners resigned from their appointments in September. Without telling us.

So, now it's just the other owners who remain as directors and shareholders of the company.

You can't just "resign" from having shares - what did they do with their shares, if anything?

I didn't think there was any other way of holding shares in a Ltd company, without being directors or employees!

The vast majority of shares are owned by people who aren't directors or employees.

GoogleMeNow

Can you contact your seller and ask them to initiate the share transfer with their solicitor?

If the set up is what I think it is, it is that the seller provides his solicitor with the original Share Certificate (or was this handed to you with your papers following completion?), the seller's solicitor completing the Stock Transfer Form (and getting it signed by the seller), then sending the original Stock Transfer Form and Share Certificate to the Management Company so that they may update their records. 

It might be possible for the seller to send the original Share Certificate and filled in and signed Stock Transfer Form to the Management Company direct, without using solicitors, providing it is for nil consideration. 

You cannot be a director of the management company until this is done.

proformance

GoogleMeNow said:

Can you contact your seller and ask them to initiate the share transfer with their solicitor?

If the set up is what I think it is, it is that the seller provides his solicitor with the original Share Certificate (or was this handed to you with your papers following completion?), the seller's solicitor completing the Stock Transfer Form (and getting it signed by the seller), then sending the original Stock Transfer Form and Share Certificate to the Management Company so that they may update their records. 

It might be possible for the seller to send the original Share Certificate and filled in and signed Stock Transfer Form to the Management Company direct, without using solicitors, providing it is for nil consideration. 

You cannot be a director of the management company until this is done.

That is clear. So shares first, directorship second.

Please note though, that we were never given a share certificate as part of the buying process. This whole share of freehold concept was entirely missed out.

With that said, assuming the seller has (or had) a "Share Certificate" - they should contact their solicitor and ask that a "Stock Transfer" be initiated from THEM to US (as the buyers).

They, and/or we, will then send those to the "management company" (who is essentially the other owner) and then directoship can be sorted.

Is this understanding a fair summary of what you said?

GoogleMeNow

proformance said:

GoogleMeNow said:

Can you contact your seller and ask them to initiate the share transfer with their solicitor?

If the set up is what I think it is, it is that the seller provides his solicitor with the original Share Certificate (or was this handed to you with your papers following completion?), the seller's solicitor completing the Stock Transfer Form (and getting it signed by the seller), then sending the original Stock Transfer Form and Share Certificate to the Management Company so that they may update their records. 

It might be possible for the seller to send the original Share Certificate and filled in and signed Stock Transfer Form to the Management Company direct, without using solicitors, providing it is for nil consideration. 

You cannot be a director of the management company until this is done.

That is clear. So shares first, directorship second.

Please note though, that we were never given a share certificate as part of the buying process. This whole share of freehold concept was entirely missed out.

With that said, assuming the seller has (or had) a "Share Certificate" - they should contact their solicitor and ask that a "Stock Transfer" be initiated from THEM to US (as the buyers).

They, and/or we, will then send those to the "management company" (who is essentially the other owner) and then directoship can be sorted.

Is this understanding a fair summary of what you said?

Yes, pretty much that.  Good luck!

proformance

Do you know if there is a standardised template for "Stock Transfers" anywhere? I did a Google search, but came up with only variations of derivative-like docs..

ALSO, would this "Stock transfer" submission go to the management company AND HMRC Stamp Offices?

I ask because of this page I found on the web - https://www.companywizard.co.uk/support/stock_transfer_form

GoogleMeNow

Stock Transfer Form


Did you receive a copy of the Leasehold Management Pack and the Lease when your solicitors 'reported' to you on the purchase?  The instructions for transferring a share in Management Company or becoming a member of the Management Company should be detailed in the Pack.

If you did not receive the pack, then your solicitor most certainly would have.  During the due diligence of this transaction, your solicitor should have read the instructions in the pack or the lease, to ascertain how to assign the lease to you and ensure the correct notices were served and should have made enquiries of the seller's solicitor in this regard.  I think you have cause to make a complaint if your solicitor failed to act upon the instructions within the pack/lease.  There would have been extra fees to the management company for the transfer of the lease to you.

There would be no need to send the Stock Transfer Form to HMRC, since the share is usually 1 Ordinary share and would be transferred to you for nil consideration.

Please read the below:

TRANSFER A SHARE IN THE MANAGEMENT CO

It will sometimes be a requirement that each tenant holds a share in the company which is responsible for managing the development (the management company). If this is the case then the share (which has no commercial value) will need to be transferred when the lease is assigned. Look out for the following or similar wording: “Not to assign the property without ensuring that that the lessee's share in the management company is simultaneously with the assignment transferred to the assignee”. If a share does need to be transferred you will need to hand over to the management company following completion the existing share certificate together with a Stock Transfer Form signed by the seller. Request that the seller enquires of the management company to ascertain whether they have any other requirements, or fees.

BECOME A MEMBER OF A MANAGEMENT CO

Sometimes it will be a requirement that each leaseholder becomes a member of the company which is responsible for managing the development (the management company). This is similar to taking a share in the company except that it applies to companies limited by guarantee rather than by shares. If tenants do need to become members then the new owner(s) will usually need to complete a membership application form which will need to be obtained from the management company and returned to them, completed and together with the existing membership certificate, following completion. Look out for wording such as: “Upon the assignment of the lease the lessee must procure that the assignee becomes a member of the management company upon assignment”. If there is such an obligation then enquire as to what the management company's procedure is and what fees will be payable.

Which one of the above is applicable to your property?

proformance

Good info, thank you!

So the seller has responded and they have actually completed the stock transfer form!

It's just the ONE share that would be transferred.

I guess we sign this and send it to the management company then?

Regarding raising a complaint to the solicitors - they don't ever respond to us so it would be futile.