Management company don't hold the freehold!!

[sismith370]

After some advice on a tricky situation. I have detailed as much info below as possible but removed the details of the companies involved as unsure if we need to seek legal advice...

Background:

I live on a private estate built 7 years ago - builder goes bust when building the site and receivers take over his assets - build of houses was complete but road not. Management Company on the original TP1 starts to manage the site, communal areas, road, landscaping etc (very badly managed) and continue to do so taking rent charges etc for at least 6-7 years. For completeness I have lived on the estate for 2 years.

Current: (short version)

Management getting worst so a meeting is called between residents and the management company. Residents request further info on the freehold ownership of the managed communal areas, private road etc as it is unclear just who owns it.

We now find out that the freehold for the communal areas is actually still held by the receivers for the bust developer in liquidation. It seems it was never handed over to the company detailed in the TP1 and then passed to the management company to manage.

The extract below is taking from an email from the property management company area manager to the residents rep on the estate.

'In the meantime, I have made some enquires regarding the ownership of the Freehold, it appears that according to our records the developer, XXXX retains the Freehold in liquidation, no doubt receivers will have been appointed to wind up the company, which is a long drawn out process. The developer may have entered into an agreement to dispose of the freehold, if this agreement has exchanged, then the receiver will at some point complete the transaction.

If no agreement has been entered into, the receiver may sell the freehold to release the equity to pay off creditors'

If this is the case then should the management company be collecting rent charges for these freehold/communal areas?

What legal standing do the residents have - can we buy the freehold if it has not been passed on?

What is the best approach for dealing with this - any advice groups etc or should we head straight for a Solicitor?

A confused and somewhat unsure homeowner (I own the freehold on that just to be clear)

Thanks for all replies in advance...Si

[Gordon999]

1. Buy a copy of the freehold title from Land Registry ( online downloads cost 4 pds ? when you enter your post code , you will be offered choice of the freehold title and the leasehold title - choose "freehold" one ) and check which leasehold properties are under the freehold. Also buy the site plan to make sure the property info is correct.

2. From knowing the leasehold properties and the annual ground rent per unit, you can work out the total annual ground rent collected by the freeholder. Alternatively, the management company may provide the same information .

3. Go to www.companieshouse.gov.uk and enter name of developer and check address of receivers ( accounting firm ) which is handling the administration .

4. Then your group of leaseholders + houseowners can make an offer to buy the freehold at say 13 - 15 times total annual rent. Alternatively if your site is mostly freehold houses, your group of flat/house owners may be able to negotiate a price for the communal areas with the Receivers.

You have to take the initiative and make an offer.

Good luck.

[jeffrey]

sismith370: you + neighbours really need professional advice specific to your circumstances. Do not try this exercise on DiY basis.

[sismith370]

Thanks all - I have spoke to the main residential reps and I have stated that I feel we need clear legal advice.

Thanks for the help and I will update once things move forward.