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Joshua
Joshua, Lawyer
Category: Property Law
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Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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The owners of thirteen boats on a marina with thirteen moorings

Resolved Question:

The owners of thirteen boats on a marina with thirteen moorings set up a private, non-profit, non-trading limited company.

The owners of twelve of the boats each paid a premium of £200 per mooring and were allowed to purchase the appropriate number of shares for each mooring at par (£1).

The owner of the thirteenth boat paid the full £200 premium but did not purchase the 718 shares which were allocated and set aside by the company for future purchase. Meanwhile a monthly fee was charged for this privilege.

As the years passed the marina grew and additional boats were given moorings. These later boats paid increasingly higher premiums (e.g. £250, £512, £911, £2000, and £2886) and purchased shares from the company at par as above.

Twenty years on, the thirteenth boat is still paying the currently agreed monthly fee, but the owner now expresses a wish to purchase the allocated shares.

Is that owner entitled to purchase the shares at par?
Submitted: 3 years ago.
Category: Property Law
Expert:  Nicola-mod replied 3 years ago.
Hello,

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Customer: replied 3 years ago.

I am happy to wait in the hope of an answer.


Thank you


Michael

Expert:  Nicola-mod replied 3 years ago.
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Customer: replied 3 years ago.

Thank you.


Michael

Expert:  Nicola-mod replied 3 years ago.
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Customer: replied 3 years ago.

Please do continue.


Sorry to have given you a tricky one.


Thanks


Michael

Expert:  Nicola-mod replied 3 years ago.
Hello Michael,

We will continue to look for a Professional to assist you.

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Expert:  Joshua replied 3 years ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

I have been asked to look at this for you. Could you tell me please did the original founders of the company actually own the mooring rights and/or berths please?

If not who did?

Does the company now own the thirteenth berth and mooring rights?
Customer: replied 3 years ago.



The formation of the company coincided with the purchase the small area of adjacent land and of the moorings using the money raised through the premiums and the initial issue of shares. The company therefore owns the riparian land and all the moorings including the thirteenth.



The number of shares issued/allocated depends on the dimensions of each boat, i.e. size of mooring required.



The moorings are licenced by the Port of London Authority which owns the river bed.



Hope this answers your questions.

Expert:  Joshua replied 3 years ago.
Thank you for the above. Did the person who used the thirteenth berth in question at the time enter into any form of participation agreement or take the benefit of any share option agreement with the company please?
Customer: replied 3 years ago.



I am not quite certain how to answer this question, except to state that the Marina has always been fully residential, non-profit and non-trading. No dividends have ever been paid and the only new shares to be issued have been sold at a premium by the Company in circumstances where new or larger moorings have been required. To all intents and purposes the resident of the thirteenth mooring was an equal participant in all affairs, except in so far as voting at an AGM was concerned.


In 1990 identical new agreements were issued for all moorings. That for the thirteenth mooring contained additional footnotes to the effect that the Company had ‘allocated but not issued’ 718 shares and acknowledged the sum of £200 paid in 1974.

Expert:  Joshua replied 3 years ago.
Thank you. Finally do you know what the £200 premium was originally paid for if not for the shares?
Customer: replied 3 years ago.

Hi Joshua:


 


My only information is that the £200 was paid in order that the shares could be set aside for future purchase.


 


Kind regards


Michael

Expert:  Joshua replied 3 years ago.
Thanks. Based on what you say the thirteenth owner would need to produce evidenceof either a participation agreement with the company which gave him rights to acquire the shares at the original value or an option to purchase the shares via an option agreement.

Unless he can produce one of these things he would rely on the company's good graces in order to obtain the shares.

The burden of proof would be on the thirteenth owner to adduce evidence that he is entitled to an option to purchase the shares from the company in the form of one of the above if he wishes to exercise such rights. If he cannot do so there is no obligation on the part of the company to sell him such shares

Is there anything above I can clarify for you any further?
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other Property Law Specialists are ready to help you
Customer: replied 3 years ago.

I understand your answer and see the logic in it. Clearly we have to dig deeper into the archives. If we find more we shall get back to you.


Thank you.


Michael

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