[BNM] [OT] Freehold purchased... lease/ltd. company needed?

[Jonathan Hirsch]

Hi Chris,

You probably need to form a management company for the property  
(assuming one doesn't already exist - whoever you bought the freehold  
from should know), with you and the other freeholder owning one share  
each and agreeing to each pay an annual maintenance charge, which  
goes to cover communal stuff like insurance and a sinking fund for  
roof repairs etc. When one of you sells up, their share is  
transferred to the buyer. One or both of you would need to be a  
director, and you'd need a company secretary - usually you'd appoint  
a managing agent to take care of everything, but as there's only two  
households, that might be overkill... I'm not really up to speed on  
how you set up a management company, or whether you legally have to  
have one for only two flats, but a standard Ltd Co can be set up for  
about £50 to £100 - pretty much any accountant should be able to sort  
that for you. NB you *may* (I'm not sure - probably depends on the  
specifics of the property) also need public liability insurance (for  
when postie falls down any communal steps etc.). Chances are your  
individual home policies won't cover that (or at least, each  
insurance company would try to pass responsibility onto the other...).

Probably worth speaking to a few managing agents - they should be  
able to give much better advice than I can! I don't know who's who  
round here, although if anyone on the list can recommend a good one,  
I'd be interested as we (the management company where I live) have  
been talking about getting a new one for ages (our current one isn't  
local, which isn't ideal).

HTH,

Jon


On 21 Aug 2008, at 16:11, Chris Billett wrote:

> Might BNM Brain, I have a question:
>
> Myself and the guy upstairs (he bangs on the floor occasionally and
> yells for his breakfast, n' something about a trap door?) have just
> purchased the freehold on our flats. It's a house, split into two
> flats, and we've got a fifty-schfifty split. We want to get structural
> insurance in place before I inevitably burn the place to the ground
> trying to re-heat Thai after a night in the Bee's Mouth, but everyone'
> being difficult as we need to form a limited company or something -
> has anyone been through this process? Do I need a solicitor? I'm not a
> fan of them. I'd rather get this done in a matter of hours than weeks,
> too. Are the insurance companies who will make this easier or am I
> being a naive fool.
>
> Well, ta in advance for any tips. I'm sure someone's been there/done
> that.
>
> CB
>