Share of freehold and management company

dklm86290

Reaching out for advice...
We have just moved into a share of freehold flat, there are three people sharing the freehold (including us). There is a mangagement company which is pretty quiet, there are no accounts from recent years and no minutes.  All decisions are made amicably over whatsapp as far as I can tell. All been very friendly so far.  We have a difficulty in that my husband and I both work with offenders and the management company is named the address of the house so if either of us become directors our home address will be searchable by people whom we don't want to know where we live. One of the other directors pointed out that even if we changed the name of the management company the history of the company will still appear and potentially be found by someone who was particularly interested.

My question is does it affect our rights as freeholders if we choose to remain off the directorship of the management company? Are we allowed to stay off the management board?

Many thanks any advice gratefully received!

poseidon1

No necessity for you to be directors, you are shareholders in the freehold reversion company a status which comes with its own set of rights and obligations.

You have indicated that in any event the company itself is operated as a dormant entity so evidently 'management' of the property is conducted informally in your joint capacity as leaseholders by agreement and through informal communications . My own flat conversion operates precisely on that basis, where one of the newer leaseholders is not a director of the freehold company.

Directorships for all in these situations, is neither mandatory or necessarily desirable.

Finally based on your self confessed exposure to potential undesirables, I for one would object to you and your partner being appointed as directors, for the precise reasons you state,

dklm86290

Thanks so much Poseidon1 thats incredibly helpful advice, really appreciate your response. What a great forum! I was thinking I needed to pay for legal advice so very glad of your help

MyRealNameToo

dklm86290 said:

Reaching out for advice...
We have just moved into a share of freehold flat, there are three people sharing the freehold (including us). There is a mangagement company which is pretty quiet, there are no accounts from recent years and no minutes.  All decisions are made amicably over whatsapp as far as I can tell. All been very friendly so far.  We have a difficulty in that my husband and I both work with offenders and the management company is named the address of the house so if either of us become directors our home address will be searchable by people whom we don't want to know where we live. One of the other directors pointed out that even if we changed the name of the management company the history of the company will still appear and potentially be found by someone who was particularly interested.

My question is does it affect our rights as freeholders if we choose to remain off the directorship of the management company? Are we allowed to stay off the management board?

Many thanks any advice gratefully received!

So presumably the freeholder is the company and you are a shareholder of the company? 

In theory shareholders own a company and day to day operations of a company are controlled by the directors. The shareholders typically have the power to appoint and fire directors. The core rules of the business will be embedded across the articles and memorandum of association. These cover things like how directors are appointed, on what things shareholders should get a vote on, how decisions are made, how decisions are made if there is a split vote etc 

Its always worth reading these things as ultimately if things go wrong its what court judgements are based on even if they are dull documents. After all the directors may choose to put everything to a vote and wait until there is consensus but if the company rules say they can enact a decision made by a majority you can't then complain if you are out voted 2:1 and they go ahead despite you previously gave more time for a descenting voice to come around to an idea. 

Also remember that as well as being a shareholder you are also a leaseholder and therefore the freeholder still has to follow your normal rights as a leaseholder such as giving notice of major works and you challenging that the works are improvement not maintenance. 



In principle the company could have been registered with a random name and used an accountant's or forwarding service as its registered address. Equally statutory directors can list their contact address as accountants or forwarding services hence why many directors have the same address as their firm. However the deal for shareholders getting limited liability (hence the name "limited") is that all this is public record and all history is preserved so its too late now to go back and change things