freehold question

[mike_cain_007]

Hi Homemove,

8 years ago i bought a lovely 2 bed ground floor flat in brighton.

The flat is in a building which contains a total of 5 flats.

3 flats have 78 years remaining on the lease. 2 flats have 95 years remaining on the lease. Each flat has been valued at £300,000.

The ground rent is 150 per year.

Each flat was given a "share of the freehold" certificate. (Unfortunately the certificates were not registered at companies house.)

The company which owns the freehold to the building was dissolved by companies house around 3 years ago due to the company accounts not being filled ontime. Apparently this is a common.

The director of the dissolved company is now in his 80's and forgot that companies house needed accounts filling, which now presents a problem. He also has no interest restoring the company.

I have found that out that the freehold is now owned by the queen and that selling each flat is now not possible as the person buying the flat would not be able to get a mortgage. Is this true?

I would like to find out if;

1. Can we restore the company or have the right to restore the company as we are only lease holders?

2. If the company is restored, can we the lease holders then file our "share of freehold certificates" with companies house?

3. Three of the flats have a lease of 78 years. If we own a share of the freehold, then how much would it cost to extend the lease of each of the flats?

Please Advise.

Many Thanks

Michael

[JustinN]

To answer your direct questions:-

1: If you are (or are entitled to be) registered as shareholders in the company, you certainly have the right to apply to restore the company to the register. As leaseholders, you probably have the right to apply anyway

2: I do not know what you mean by "share of freehold certificates". If they are certificates of shareholdings in the company then you should be (a) included in the register of members of the company and (b) notified to Companies House as holding shares - any omissions in these respects will need to be resolved as part of the application to restore the company to the register. If you have some other form of entitlement , then your rights - and the remedial action to be taken - would depend on exactly what that entitlement is

3: There is a ready reckoner for calculating the approximate cost of an extension under the relevant statutory provisions at The Leasehold Advisory Service - Lease Extension Calculator - this assumes you do not own a share in the freehold-owning company, however. If you do, it may be that the company will agree free (or reduced cost) extensions. In addition, there will be legal costs to pay

In addition:-

4: It is possible to arrange "missing landlord" indemnity insurance, but this really only covers the risks for a buyer of the leasehold interest in not being able to get confirmation from the landlord that there are no breaches of the lease by the current tenant - it is not a satisfactory substitute for getting the company restored to the register and under proper control and management

5: At present, the building is probably uninsured - as a matter of urgency, therefore, you should address this issue

6: Finally, though the director of the company professes to have no interest in restoring the company, he is clearly in breach of his obligations as director and can be made personally liable as a result. Pointing this out to him may result in a more co-operative attitude

I hope this helps

[Simon Seaton]

Whist the reference Lease Extension Calculator is very useful, in this case, assuming the company is restored, it may be that the new shareholders will agree not to charge a premium.

With 78 years remaining you may have a problem in a few years time selling as a number of lenders do not like to lend on properties with less than 70 years remaining. Of more immediate concern should however be restoring the freehold company.

[Richard Webster]

An alternative may be to seek to buy the freehold back from the Crown (through the Treasury Solicitor's bona vacantia department).

It is a question of which route is cheaper and easier - paying for it to the Crown or trying to get the company restored (which will involve substantial legal costs for the court application)