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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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Good Morning. I own a leasehold flat in a converted property

Resolved Question:

Good Morning.
I own a leasehold flat in a converted property of 7 flats. I also am part owner in the freehold which is administered by a property management company of which we have 3 directors. I am selling the flat and have willing buyers but they want to bring their cat with them but this is not allowed in the terms of the lease. I have approached the other 6 owners and 5 of them have agreed that it would be ok but the 6th is not agreeable. Can this be carried by a majority decision or do all parties have to agree or do the 3 directors have the final say ?
Many Thanks
***** *****
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is ***** ***** I will assist you.

The purchaser is seeking permission effectively to breach the lease. It is very unlikely the company will amend the leases simply because they would have to do it for everyone and it would be expensive and time consuming.

Therefore on the basis that the purchaser has permission to breach the lease, that permission has to come from the landlord - i.e the freehold company. The freehold company is managed by the directors who must act in the best interests of the company and members as a whole. Therefore what it actually comes down to is the company agreeing not to enforce the terms of the lease. The only way the company can act is through its directors and the directors can only be forced to act by shareholder resolution. A shareholder resolution is either an ordinary or special resolution ( a special resolution requires a 75% majority and an ordinary resolution requires a 50% majority).

Therefore if the purchaser comes in and "breaches the lease", the company would need to enforce the lease - the directors are not prepared to do this as you know, and there is only one member who would be interested in enforcing these terms. That member by himself could not pass a resolution compelling the company to act.

That means the only remedies available to this member would be ones S/he has to take out in his/her own name, these are actions such as injunctions or unfair prejudice applications under the Companies Act which are incredibly expensive and time consuming.

The only thing you need to do is check what it says in the Articles of Association of the company, if they do not say a "Unanimous" decision is required to change the terms of the lease (or unanimous decisions are required for any member resolution), then you are probably ok if 75% of the member vote in favour of allowing the cat.

Kind regards

AJ

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