Completed my lease extension- who gets the premium?

[Ian_R]

I have just extended my lease; the money was paid to the freeholders’ company, who are the landlord.

This seems rather a stupid question, but what happens to the money? Is it divided up as shares/dividends amongst the freeholders? Does it stay within the company accounts for later use for good purposes, e.g. decoration? If so, what is the point when the company can charge this through the service charge? Presumably, I can track what happens to the money through the company accounts?

Thanks for any information

[sgclacy]

I have just extended my lease; the money was paid to the freeholders’ company, who are the landlord.

This seems rather a stupid question, but what happens to the money? Is it divided up as shares/dividends amongst the freeholders? Does it stay within the company accounts for later use for good purposes, e.g. decoration? If so, what is the point when the company can charge this through the service charge? Presumably, I can track what happens to the money through the company accounts?

Thanks for any information

The premium is a capital sum and belongs to the shareholders and can be distributed to them by way of dividend. It does not form part of the service charges

[jeffrey]

It might not be lawful for dividends to be paid! This depends on the Company's:
a. Memorandum of Incorporation; and
b. Articles of Association.

Also, there might be no shareholders- e.g. if it's limited by guarantee instead.

[Ian_R]

The last 363s Annual Return I have is for 2007, when the freeholders’ company was described as residents property management and as a non-trading company with 4 ordinary shares issued. No dividends paid for the year 2006. The audited profit for 2008 was £3,622, before I paid my premium!

My interest arises, because after applying to the LVT for an assessment on costs of the lease extension, I found out from released documents that they had “exaggerated” their costs. Final decision of LVT still awaited.