Problem with developer - need advice!
Discussion
Does the developer own the freehold to the block?
If so you need to acquire it, hopefully for a nominal sum, and set up a LTD company. Then sell equal shares to all the residents (leaseholders) so they all have a share of the freehold.
The appointed Directors will then be in charge of the sites upkeep. With the costs split between each leaseholder / shareholder. If as you state part of the site remains to be finished then that work will also be financed by the ltd company, with the profits split between the shareholders.
If I recall correctly, where a freehold owner (in this case the developer) fails to meet their obligations, then that freehold can be compulsory purchased by the leaseholders. I think it requires 3/4 of the leaseholders to agree.
You should also contact the leasehold advisory service
If so you need to acquire it, hopefully for a nominal sum, and set up a LTD company. Then sell equal shares to all the residents (leaseholders) so they all have a share of the freehold.
The appointed Directors will then be in charge of the sites upkeep. With the costs split between each leaseholder / shareholder. If as you state part of the site remains to be finished then that work will also be financed by the ltd company, with the profits split between the shareholders.
If I recall correctly, where a freehold owner (in this case the developer) fails to meet their obligations, then that freehold can be compulsory purchased by the leaseholders. I think it requires 3/4 of the leaseholders to agree.
You should also contact the leasehold advisory service
Who was intended to manage the block once it was completed, had everything gone to plan?
There are usually two solutions to ongoing management of apartments; one is James' solution, where you set up a resident's management company (and it doesn't really matter who owns the freehold; sometimes the developer hangs on to it, sometimes they sell it as a 'freehold reversion' to one of the tenants or to a 3rd party - it only really becomes relevant in the dim and distant future when the block is demolished, as the freehold owner then owns the land under it and can redevelop it).
The other solution is to get a professional management company on board, to whom tenants pay an annual management charge. Obviously, this tends to cost more, but it is the easy way out and avoids all the complexities and in-fighting that can occur with a tenant-run management company (how do you deal with it if one of the directors sells up and moves to Thailand, and the new owner doesn't want to be a director, or if 'factions' evolve who have different ideas about management & maintenance?).
We as a developer usually prefer the second option and set up the management company to operate from 1st occupancy, as it causes a lot less grief and makes the flats easier to sell both for us and for purchasers when they come to sell on, further down the line.
We usually use a company called Curry & Partners, but there are lots of others, if you hunt round.
There is a third solution, where you have reciprocal freehold/leashold arrangements but you don't want to go there...
There are usually two solutions to ongoing management of apartments; one is James' solution, where you set up a resident's management company (and it doesn't really matter who owns the freehold; sometimes the developer hangs on to it, sometimes they sell it as a 'freehold reversion' to one of the tenants or to a 3rd party - it only really becomes relevant in the dim and distant future when the block is demolished, as the freehold owner then owns the land under it and can redevelop it).
The other solution is to get a professional management company on board, to whom tenants pay an annual management charge. Obviously, this tends to cost more, but it is the easy way out and avoids all the complexities and in-fighting that can occur with a tenant-run management company (how do you deal with it if one of the directors sells up and moves to Thailand, and the new owner doesn't want to be a director, or if 'factions' evolve who have different ideas about management & maintenance?).
We as a developer usually prefer the second option and set up the management company to operate from 1st occupancy, as it causes a lot less grief and makes the flats easier to sell both for us and for purchasers when they come to sell on, further down the line.
We usually use a company called Curry & Partners, but there are lots of others, if you hunt round.
There is a third solution, where you have reciprocal freehold/leashold arrangements but you don't want to go there...
jamesuk28 said:
Does the developer own the freehold to the block?
If so you need to acquire it, hopefully for a nominal sum, and set up a LTD company. Then sell equal shares to all the residents (leaseholders) so they all have a share of the freehold.
The appointed Directors will then be in charge of the sites upkeep. With the costs split between each leaseholder / shareholder. If as you state part of the site remains to be finished then that work will also be financed by the ltd company, with the profits split between the shareholders.
Some years ago now I found myself in a similar situation to the OP, and together with 3 other leaseholders formed a LTD company. Then the problems started, not for ALL the other leaseholders, certainly not for one, but it did very much for myself. If so you need to acquire it, hopefully for a nominal sum, and set up a LTD company. Then sell equal shares to all the residents (leaseholders) so they all have a share of the freehold.
The appointed Directors will then be in charge of the sites upkeep. With the costs split between each leaseholder / shareholder. If as you state part of the site remains to be finished then that work will also be financed by the ltd company, with the profits split between the shareholders.
Why, well the other leaseholders wanted and voted for a Property Management Company to run/manage the block of leasehold flats. With the one appointed taking to a female leaseholder, to such an extent, that they approved/commissioned improvement works to this female leaseholder’s flat, that they both failed to advise the other leaseholders of, but also seek permission of the same from those leaseholders.
It appears to me that where you form a LTD company with other leaseholders within a block of flats, you not only must yourself take an active part of the running of that company, but also seek other leaseholders to do the same, other wise your or their lack of interest, could be providing another person/s with an open cheque book that you and other leaseholders/directors will be responsible for.
You need to go back to your original conveyancer and check what was envisaged. On new developments the deal is usually that the developer sets up the management company and passes it over to the leaseholders on completion of the development. Your lease or transfer should provide what happens if the development isn't finished.
Once you've found out what should have happened you can work out what you need to do
Once you've found out what should have happened you can work out what you need to do
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