Joint freeholding shareholders should also be Directors?

Joint freeholding shareholders should also be Directors?

9:55 AM, 6th June 2025, About a month ago 4

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Hello, We have an Annual General Meeting (AGM) coming up and possibly 2 (more recent appointees) likely to resign as forthcoming building works might mean some actual input (eg getting redecoration quotes; liaising with fire alarm installation contractor; being the Fire Safety “Responsible Person” to weekly test fire alarm etc etc) and one selling their flat.

Would it be a way forward, for the benefit of the building, and current/remaining Directors, for ALL Leaseholders/Shareholders (no joint Leaseholders as all singles) to now become Directors?

ALL Leaseholders are Shareholders so have a vested interest in the building, both in compliance, organisation and aesthetics.

Here is some background:  8 flats in a converted (converted 1975 & 1986) Edwardian detached building. 3 owner-occupied, 1 family member occupied and 4 tenanted. All Leaseholders live within a 30-minute drive, bar 1 (100 miles away).

Freehold purchased jointly in 2003 and Ltd formed, comprising 4 Company Directors and Company Secretary (also a Director). Ltd legal entity with 1 Director and 1 Co Sec (who can be the same person) under Articles of Association (AofA).

Every flat (Leasehold) has 1 Ltd company share.

Over time, Leaseholders have changed, and Directors (bar 2) and co-secretaries have also changed. Still 4 Directors with 1 Director, also the Co-Sec.

Using an outside management company would at least treble the monthly service charge. More importantly would then require sticking to the lease’s exterior and communal internal re-decoration time scales, etc., which Shareholders have all agreed to carry out when needed, not when stipulated.

Any thoughts please?

Thanks,

Judith


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NewYorkie

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11:14 AM, 6th June 2025, About a month ago

I was in exactly the same situation; 12 flats and 4 directors. I was CoSec. We managed without an agent until our Treasurer died, and also compliance with rules and regs became too onerous for non-professionals.

None of the other shareholders would get involved, so we needed to employ a professional managing agent (under our control) but our service charges were too low. We gave them no choice but to vote at an EGM to engage an agent and increase the service charges. If they didn't agree, we said we would resign.

We engaged a good agent, but I do wonder what would have happened if we had all resigned. I sold up soon after.

Graham Bowcock

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13:07 PM, 6th June 2025, About a month ago

You cannot compel shareholders to be directors unless the Memorandum and Articles of Association (or maybe the lease) requires it.

Unfortunately small blocks are becoming rather difficult to manage. We managed one that was down to a single director who was basically holding the fort without any real interest or knowledge. We had to persuade him not to resign!

A good agent is essential to you.

Freda Blogs

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13:13 PM, 6th June 2025, About a month ago

Reply to the comment left by Graham Bowcock at 06/06/2025 - 13:07In addition to Graham’s comments, having several or all leaseholders as Directors is too unwieldy to manage, particularly when there is disagreement. Being a Director of a management company is a difficult and thankless task, so having an agent is a better option. Ensure they have the proper qualifications.

Billy Gunn

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4:44 AM, 8th June 2025, About a month ago

I live by 3 major Uni's and a lot of landlords are selling up due to Article 4.

My rental property is also by a Uni (in another City) and again landlords are selling up due to Article 4.

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