Right to manage/buy freehold if building >25% commercial?

stg123

Hi

We've found ourselves in the position of having a crap management company that won't do anything. But our buiding is more than 25% commercial - more like 35% or 40%.

There are lots of repairs that need doing but don't think they will unless we can oust the management company. Do we have any power to do this?

SquatNow

If they arn't doing any repairs, and are just collecting money, couldn't you just stop paying?

I mean, the worst thing they could do is stop doing repairs. oh wait...

Worth asking.... iseveryone else paying their fees. If no-one else is paying it may be that the management company has no money to do repairs.

martinman3

stg123 wrote: »

Hi

We've found ourselves in the position of having a crap management company that won't do anything. But our buiding is more than 25% commercial - more like 35% or 40%.

There are lots of repairs that need doing but don't think they will unless we can oust the management company. Do we have any power to do this?

From http://www.lease-advice.org.uk

To exercise the right to purchase the freehold or the right to manage

no more than 25% of the internal floor area to be in non-residential use

there are also other requirements.

That means you cannot force the freeholder to sell to the leaseholders but you can still ask how much they want for it, as the non-residential part gives them a nice return the price may be quite high though. I would check with estate agents what would be the approximate cost of a similar freehold first before approaching your freeholder. If you could afford it I would suggest buying it through a third-party, your solicitor, to keep the purchasers secret otherwise the freeholder may increase the price as it would be worth more to you than to an property investor.

You can also propose to the freeholder that you maintain the building yourself and they may agree, though very unlikely if freeholder and managing agent are the same or linked somehow.

stg123

Oh I'm sure other tenants aren't paying their fees either. But the management company are also very poor. So it's an vicious circle that needs to be broken. They have threatened to sue people/charge interest on those who haven't paid. Not sure to what extent they have the power to do this - or if they ever have.

stg123

So there's nothing to stop anyone asking to buy the freehold?

Are the management company allowed to threaten to charge interest if we don't pay the bill?

martinman3

stg123 wrote: »

So there's nothing to stop anyone asking to buy the freehold?

Are the management company allowed to threaten to charge interest if we don't pay the bill?

Yes, that is correct. As i said previously, if you and other leaseholders are interested better to do it secretly to protect your relationship with current freeholder and or management company if price is too high for you.
Also, if you had the right to collective enfranchisement, in your case if < 25% commercial, the leaseholders would be offered the chance to purchase the freehold before anyone else if a third party made an offer to purchase it. As that does not apply, the freehold to your building could legally be sold to a third party without your knowledge but it also means that the freeholder cannot be forced to sell if they don't want to.

It depends what the lease says, if not then they could take action through courts to get payment or if size and length of non-payment large enough they could try for forfeiture of lease but rules for that are quite strict now.