Shared Freehold Flat

[Hotpend]

My father is a leaseholder in a small block where each owns a share in a management company that owns the freehold. Most of the leaseholders are elderly people who are unwilling to take on the rule of director of the management company.

An outside agent agreed to be company secretary for a fee but the directors must be leaseholders. A minimum of two directors required. At the present time there is only one director following the departure of one who sold his flat.

What will happen if no leaseholder can be persuaded to become the second director? Will Companies House close down the management Company? Will the freehold perhaps be transferred to an individual willing to become landlord? I am quite concerned. My father is 92 years old an the flat represents his life savings.

[Richard Webster]

Firstly, has OP checked with the managing agents how they see things proceeding?

The managing agents will probably have to get all the lessees together and explain the position. Possibly one could be persuaded on the basis that the minimum expected of them is to sign documents from time to time. As long as an annual return is submitted the company will not get struck off and the company secretary should be able to do that.

Another possibility is that the memorandum and articles of the company could be changed to provide for only one director and/or that directors need not be members of the company so an employee of the managing agents or OP could be appointed as a director.

OP may have to try to contact younger family members of the various lessees to get them to explain to their parents etc that they at least do the minimum to make their flats saleable in the future.