Self Managed Freeholders

I am one of several freeholders of a building in which we all own flats. We are a LTD company and are all directors. One owner/director is not paying their share of expenses and not maintaining their flat properly.

What is the legal position? Can she be removed a s a director, retaining her share in the company, despite being one of the freeholders?

The non-paying owner could potentially lose their flat in the long term - this is very rare though. It can be a complicated process legally. I suggest you get a management company to deal with the admin side of the freehold - not only do they do the boring stuff like submit the ltd company accounts but they would also deal with the matters of non-paying owners and the like. A decent management company would also be well versed in the legal ramifications of that and be able to advise / take action accordingly.

you need solicitors advice who is versed in such a matter

Having had experience of several external management companies, I would never, ever let one near any of my properties again. They are almost all incompetent and dishonest.

Sorry to hear you’ve had a bad experience, good managing agents are hard to find! We use Estates Property Management for our block and they were very helpful when we had to deal with the same issue as you.

As Colin suggested, probably best to go down the solicitor route. Good luck!

Why not call a meeting of all the directors including the director thats not adhering to the conditions, restate all the previous conditions, ask for any new suggestions and suggest a new clause to be added to the effect that “any director failing to adhere to all conditions agrees to give up their directorship and automatically loses the right to live within these premises”
It may not work but will certainly give her room for thought.

You wouldn’t be able to deprive her of her share of the freehold unilaterally or through a directors meeting. You might be able to remove her directorship but that wouldn’t achieve much.

You would probably need to apply to the land tribunal with substantial arrears to take the property back. It is a complicated legal area.

Might it be possible to go to the small claims court to claim the monies owed? The leasehold advisory service is a useful source of information to look at but they will only advise leaseholders, not freeholders. You might find something on the website or they might give you a free advice session as a leaseholder?

You need to ensure you have served all the demands in correct legal form to have a good case.

I think you need legal advice one way or another.

If non paying owner has the mortgage on the property you should inform lender and usually they add sum of debt to owners mortgage and pay you that amount, as they don’t want to loose property for a relative small amount of money. Obviously, you will need supporting documentation to prove the case.