Ask our Experts

What our customers are asking


"1. What practical requirements are there for the purposes of the buyer becoming a member of the freehold company, as envisaged by clause 34 of the 4th schedule of the lease. 2. Please could you confirm if clause 4 of the 5th schedule of the lease can be amended to ensure it fully reflects the risks to be accounted on the buildings insurance. " - Ms Sobot, St Marylands Road W2

Your answers in short are: 1. If they are not already a FH shareholder, buying a share at market price - our valuers can establish this for you at "their cost" 2. Any schedule of a lease can be amended but only with both parties agreement, therefore when a property extends their lease or buys the FH there is scope for modernisation, but only if both parties agree this


"We are contemplating buying the Freehold as we have received a Section 5 Notice offering us the 1st right of refusal else the Freeholder has nominated another buyer. My questions are: 1) assuming all parties were interested in purchasing their share what would we each end up having to pay? 2) Would all the shares be equal? " - Miss Azami, NW8

The answer to question 1 is A - that would be up to you as shareholders in the new freehold owning company to decide, some choose 1/9th, some choose to do it by relationship to flat sizes or flat values, in valuation terms it is normal for valuers to add a notional 1% enhancement to flats value by virtue of them owning a share of freehold The answer to question 2 is A - yes they should be as once you have achieved a level playing field by either paying in a 1/9th share or paying differential premiums to the purchase, the company will operate better in the spirit of equal share decision making after that. So you deal with any inequity in the initial share premium, not in voting for the next 99 years etc..


"On decision making - at present the Freehold flats have one vote each in the Freehold company, which may causes a stalemate in the future. However, we don't want the non freeholder director to have the casting vote, as this will give them greater control than the freeholders. So the question is: Can we appoint a non freeholder as an additional director, but limit their vote to only maintenance issues and not issue affecting the interest of the freehold." - Mr Roberts,

YES, you can and you can call up on that person when you need to. Qualified Chartered surveyors such as myself can act as a 'professional Director' the cost is 100 per annum


"We would like any changes to leases to done at market value, but with a get out that its done at the Freeholder's discretion. We could then allow changes to Freeholder's leases for a nominal 1 upon agreement by both freeholders. Is this possible?" - Mr Roberts,

In short YES this would be achieved via passing resolutions which then need to be held in the company minute books


"We achieved our RTM 1st and run the block through a RTM company, we have since bought the Freehold and have a Freehold company as well and would like to simplify things. The problem being, 1 leaseholder is a member of the RTM company only and a Director" - Mr B Roberts, SW15

There is little point having 2 companies on a small site such as this as the accountancy costs of preparing service charge accounts for the RTM company and 2 sets of dormant company accounts for both the RTM and Freehold Company is dis-proportionate to the benefits. The RTM is the legal entity that is standing in the shoes of the Freeholder or now Freehold Company and managing and to stop it managing you'll need to agree to disolve the company, wind it up. This is a procedure that requires clearance from the tax office, non-trading/dormancy status and then an application to Companies House. Our Solictiors practice Ringley Legal LLP could arrange this for you. But first, I suggest the way to deal with the Director of the RTM Company who is not a shareholder in the Freehold Company would be as follows: 1 - clearly they want to remain 'in control' so they need a directorship 2 - check the articles of the Freehold Company and see if persons other than shareholders or members can be a director of the freehold company, if necessary call a meeting or pass a written resolution so that they can. Ringley Legal LLP can assist you with the resolutions. 3 - to protect yourselves and not expose you to inviting someone into the Freehold Company who then gets their freehold share for free, pass a resolution that lease extensions shall be issued to Flat 1 and Flat 2 (the participants) on request for 999 years at a premium of 1.00 and that future freehold shares or lease extensions will be sold to any leaseholder in the property at market price, such price to be determined by a Chartered Surveyor acting in the capacity as 'joint expert' for the parties. Ringley Legal LLP can assist you with the resolutions. 4 - then it would be safe for you to invite the non Freehold Company owner to be a Director of the Freehold Company to participate in company business, setting service charges running the block etc.... and get their consent to wind up the RTM Company thereby effectively transferring service charge management to your new Freehold Company. Again Ringley Legal LLP can assist you with the winding up. When you've simplified the arrangements I would recommend Ringley's Block Care 300 legal and financial administration package at 525 + Vat per annum which will help you self manage repairs but safely with us running the legal paperwork, budgets and demand cycle. To see what Block Care 300 - from 525 + VAT per year gives you go to In respect of the ground rent this would remain payable by Flat 3 who did not participate to the Freehold Company. In respect of the reserve fund, this should be held by whatever entity is collecting the service charge and producing the service charge accounts.

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