0:01 AM, 3rd February 2026, About A week ago 4
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Hi, would like some advice. A small development’s residents pay a rent charge for communal areas (garden, fences, lights, etc.). The company was set up with shareholders, with every resident having one share and voting rights.
There have been lots of issues with the company not following proper procedures. I have now found out that the company has been changed to articles of association with only two directors and no shares or voting rights for residents. When challenged, the directors say this was done on the advice of the accountant, as the company had not been set up properly.
The company had been operating for six years without an issue. Companies House say that it was fine. The accountant refuses to comment and just refers us back to the directors, which gets nowhere.
My concern is that when residents sell their houses under the TP1, the structure of the company has been changed so there are no shares and no voting rights for residents, only the two directors who control everything. Under the TP1, residents still have to pay one seventh of the service charges and the usual maintenance issues, such as keeping fences repaired.
The company has no freeholder, as it is in bona vacantia since the developer went into liquidation.
Does anyone have any advice please?
Thanks,
Peter
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Member Since February 2025 - Comments: 63
9:46 AM, 3rd February 2026, About 7 days ago
The articles can only be changed by a members’ meeting. All the members at the time should have received notice of the meeting and the proposal to change the articles. If they weren’t given notice and the chance to vote, then the change of articles is invalid.
Articles for companies like this often have entrenchment provisions, making it harder or impossible to change the membership and voting arrangements. If there were such provisions and they have been ignored, then the change to the articles is invalid.
Kizzie
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Member Since October 2022 - Comments: 401
10:52 AM, 3rd February 2026, About 7 days ago
Yes not unheard of directors capturing a management company in order to run it for their own benefit.
You should put a monitor on the company at Companies House and go back to the year the company was set up and download on CH website the Memorandum & Articles.
You have legal shareholder rights and obligations under the M&A separate from your obligations under your leases registered titles at HMLR.
Shareholders own the company which is a legal entity or personality in its own right and directors direct.
This is defined as a Residents Management Company (RMC) which may or may not also own the freehold interest.
If the FH has been transferred to the RMC then there should be a transfer deed TR1 registered at HMLR so contact them with your title number and ask for a copy and note the date and any conditions relating to the transfer.
And also if FH transferred to the RMC then it may be a nominee company for leaseholders so there may be a deed of trust with your leases which sets out individual contributions and how leaseholders run the RMC.
This is complex and you need specialist advice by solicitors dealing with property litigation
Judith Wordsworth
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Member Since January 2015 - Comments: 1382
11:10 AM, 3rd February 2026, About 7 days ago
If your shares have been removed report to Companies House.
They should not have gone digital access as many many companies can and have easily removed shares. One x in a box and proooof shares gone.
Cathie French
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Member Since November 2022 - Comments: 37
12:44 PM, 3rd February 2026, About 7 days ago
If the Development Company went into liquidation it is probable the the freehold title would have reverted to the crown. You can contact the treasury solicitor and negotiate for the management company to purchase the freehold title. However, sort out the issues with the shares of the Management Company first.