Buying a Freehold but no shared certuficatio

Switchit

Im trying to buy a freehold with a group of 8 flats which has 996 years on it.

The management company are saying no share certificates have ever been issued to any of the flats and I will be added as a director on companies.

However my solicitor is saying that being added as a director is not proof of ownership.

i have already laid all my fees and full amount of the purchase price to my solicitors and my solicitors are holding this and saying we are ready to exchange.

The management company seem to be one of the flats and nothing is being done about the share certificates.

I am totally confused if I go head without the share certificate will I still have proof of ownership?

If anyone the know can help would be much appreciated.

NameUnavailable

My understanding (having just bought a share of freehold property) is that if the freehold is owned by a Limited company then you will get a share of that company, or if it's not owned by a Ltd co you will be named as a co owner on the land registry.

I'm waiting on my documents having completed recently. As you say being a Director is a different matter entirely.

The management company are (usually) another entity employed by the freeholders.

Just for correctness, you are buying a lease with 996 years AND a share in the freehold. These are two separate things although may be conditional upon each other.

canaldumidi

NameUnavailable said:

My understanding (having just bought a share of freehold property) is that if the freehold is owned by a Limited company then you will get a share of that company, or if it's not owned by a Ltd co you will be named as a co owner on the land registry.

 8 owners exceeds the limit at the Land Registry, so some separate Deed would be needed I think in the absence of a Ltd Co.

The management company seem to be one of the flats

That needs a bit more explaining. What advice is your solicitor giving you?

Switchit

The landlord lives in one of the flats and is the management company which is a Ltd Co.

None of the residents have ever been issued a share certificate and management have never made out a share certificate.

All the residents are directors on companies house, however my solicitor is saying that no proof of ownership?

So I want to know will I still own the property without the share certificate and are there any risk of losing the property without the share certificate. Do i really need the share certificate?
 

loubel

I presume you buying one of the leasehold flats in the building which is meant to come with a "share in the freehold". You wouldn't own the freehold itself as that is owned by a company but you are meant to be getting the seller's share in that company.

You will either need to become a shareholder or apply for membership, depending on how the company is set up. Your solicitor is correct that becoming a director is not the same as being a member or shareholder and you will need to take their advice on how to proceed as they will have seen the company's memorandum and articles dictating how it should be run.

Unfortunately it sounds like the company director(s) don't know what they are doing, which is fairly common with these sort of set ups as taking advice costs money. 

Your ownership of the leasehold flat would be completely separate to your taking a share in the freehold company.

GoogleMeNow

You need to establish what kind of management company it is.  For instance a management company could be limited by shares or limited by guarantee.  Try looking on Companies House for the name of the management company to find out the management structure that the property has in place

Limited By Shares

If this is a company limited by shares, the company will normally issue one share to each flat owner. Each share will have a nominal value and upon payment for the share, each individual shall be entitled to and then become a member of the company and can vote as a member.  There will be a share certificate issued.  The share must be transferred to an incoming leaseholder (i.e. following a sale) and a new share certificate issued in the new purchaser's name.

It will normally be a condition of ownership of the flat that the new leaseholder becomes a member of the company and the old leaseholder transfers the share. If there are two leaseholders of a single flat (e.g. husband and wife) then they will own the share jointly. 

Care must be taken to ensure that any joint leaseholders are not issued one share each, as this will give them too many voting rights and upset the balance of power between flat owners.

Limited By Guarantee

This is usually the simplest form of property management company, especially if it is a relatively small block of flats. 

It is simple because it is much easier to deal with changes of ownership (the outgoing leaseholder resigns, the incoming leaseholder is admitted as a member) so there is no need to physically transfer shares of the company. The voting method is usually one member, one vote. There are also no share certificates issued. Each member is entered on the register of members provided that he fulfils the necessary qualification for membership (i.e. owns one of the flats). Each member is removed if he or she no longer qualifies as one (for example, if the flat is sold).

I am not an expert, but hope this makes sense.