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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 28234
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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My husband holds the freehold to a house converted into 3

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My husband holds the freehold to a house converted into 3 leasehold flats. He and I own ground Floor (our residential home) and first floor (rented out), and our son owns the second floor (also rented). We are in process of selling him the first floor, but we are having finance problems as we run the management/maintenance ourselves. How do we get/set up a proper management company please?
JA: What steps have been taken so far? Has any paperwork been prepared or filed?
Customer: Solicitors are preparing sale & purchase conveyancing, and son John is applying for BTL mortgage. We looked at Equity release for our flat, but refused as there was no independent management company.
JA: Has he talked to a lawyer about this?
Customer: Not yet, but realised that management issues need resolving - right-to-manage, or instruct separate outside company?
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No, don't think so

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

I am very sorry to read of the above and I imagine what a difficult position it must be. I will certainly try to clarify your options.

  1. May I confirm, the financial problems you refer to, are these unrelated to the management of the building please?
  2. do you wish to retain ownership of the freehold or would you prefer to own this jointly with your son?
Customer: replied 8 days ago.
Thank you, ***** ***** understand the situation of time restraints .
We have owned a portfolio of freehold houses for over 20 years, but leasehold is a new problem for us.To date we have simply paid out the necessary ongoing expenses of the building, the tax advisor has provided an account sheet for the common parts at the year end, and John has paid us his third for the top flat.Sorry by the confusing words "financial problems" - I meant problems arising when applying for finance because the maintenance is done casually. It seems that an official company is required, and I need pointing in the right direction.I thought David and John could own the freehold jointly, or would this still not be independent?
Should we set up a limited company and get a separate bank account for regular contributions from us both?
Or do we need to appoint an outside body - much more expensive I think.
Of find a friend who could join our "board"?I just need to know how we go about this.
Many thanks, Sandra

thank you and thank you for the above clarifications. There is no need to set up a limited company for management purposes unless the lease specifically requires this which I would not expect for a building of this size. Rather, what the legislation requires is that as landlord, your husband maintains an entirely separate account for the purposes of collecting maintenance payments, service charges as they are known, in order that both his and other tenants payments for service charges funds are not co-mingled with his own and can be readily identified.

The legislation also requires that records are kept appropriately for accounting purposes as any leaseholder in the building has the right to request a statutory set of accounts for the previous year and from there, further invoices and other documentary evidence to substantiate that account summary.

Obviously, whilst matters a relatively informal as between family, it may be that certain formalities can be dispensed with in practice but from what you say, this has led to an issue with regards ***** *****

Thank you for your request for a phone call. Is it convenient if I were to call you within the next few minutes or is another time better for you?

Joshua and other Property Law Specialists are ready to help you
Customer: replied 8 days ago.
I have to go out now till 4.00pm. Will be around later, or you can call tomorrow after 10am. Thanks

Thank you - I will try you now...