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Help, flat sale halted because no one knows if there is membership or share certificate?(16 Posts)
My partner is selling his flat. Everything is sorted except for this, buyers are getting angry and threatening to pull out due to delays.
Apparently solicitors need to find out if there is a management or share certificate. If there is, partner will need to sign stock transfer form.
Partner's solicitor has contacted management company, who didn't know the answer. Management company suggested our solicitor contacts their solicitor- who haven't responded after 2 weeks of calls and emails.
Partner is using the same solicitor to sell his flat, as he used to buy it- we would have thought that they would have looked at this as part of his purchase process. However, they seem to have no idea about it.
Help! Can anyone suggest how this could be resolved?
It should be simple... for 15 years I was the secretary of the management company when we owned a flat.
There should be a certificate issued with every flat sale. They can be bought in a book, WH Smiths. The secretary cancels one, in the book, and reissues another with the new persons name on it.
So if one has been lost the Secretary can just re-write on with the original number written on it... and a note in the book that it was reissued due to loss.
It really is that simple, whether the owners run the management company or an agent.
The solictors cannot say they have no idea about such shares, though they may never had had one sent to them. Nevertheless, the resolution should only take 10 minutes.
Thank you so much for your reply Lazy. It is nice to find someone who knows what I'm talking about, as the solicitors are acting like this is all terribly terribly complicated!
The issue we have at the moment is neither our solicitor or management company know whether the set up with this building was to give each owner a share or not. Apparently the share thing isn't always done.
My feelings are that if the management company (who are a firm whose sole role is to manage various properties), know nothing about this, then the likelihood is that there are no shares.
Unfortunately our solicitor does not agree and is trying to find out more from the management company's solicitors- with no success!
You are right. The management company should know, that is what they are paid for. They must know what the parameters of the company actually are. What have they been doing for the money they charge?
One solution is for all current owners to be issued a share from now... as in the management company get off their bums and do some work, explain to all owners what is happening and the reasons why - as in no one else could sell unless this is sorted. If there has been no previous 'decision' then they could all make one now!
I had a similar problem when I sold my flat. We did as LouLou says and all the owners were issues with share certificates. Then I transfered my share to the new owners.
Your partner needs to get a copy of the articles of association of the company. The articles will say what the situation is regarding shares. The management company should have this. Failing that, perhaps he could ask the other owners if they might have copies.
The latest from our solicitor is that she is waiting for managements company solicitor to respond, which for some reason they aren't doing. Our buyers are getting very fed up.
Are the articles of association for the management company itself? So we should ask for a copy from them?
I don't relish the thought of trying to persuade them to issue shares! I got the impression that it wasn't necessary for the share 'thing' to be in place? Mrs Squirrel- what was it that made your management company prepared to start issuing shares?
I'm going to try to persuade DP to contact management company himself. After all he is their customer, they ought to provide some level of service.
I cannot believe how complicated this has become.
Thank you for your help and advice!
Management company's annual return will state who its shareholders are - as will its register of members. Those are the best places to check. You can check the annual return on line at Companies House.
If he does have a share certificate but has lost it, there's a very simple form of indemnity for lost share certificate he can complete to get a new one issued.
Can I just clarify that the management company is the 'professional company' that DP pays annual maintenance etc to.
There is also a residents group who meet annually to discuss things and make decisions- this is not a management company though is it? More of a group of people?
Where might we get an indemnity to cover lost certificate (if indeed there is one)- our solicitor is claiming there is no such indemnity applicable.
The managing agent will be the company engaged to look after the practicalities of managing the building.
The Management Company are the company who hold the buliding obligations, which they have contracted the managing agent to carry out on their behalf.
And the managing agents should absolutely know how the company is run/set up!
The two key documents that should allow your solicitors/the agent to establish whether shares should be granted in the first place are the Certificate of Incorporation for the Management Company and what your partner's flat lease says about shares. If each leaseholder is entitled to a share, it should be explicitly set out in the lease how many they are to be granted and what the leaseholders' obligations are if they sell their flat, ref. transferring the shares to the incoming leaseholder.
If there should be a share certificate and it wasn't issued, the company secretary can issue one.
If there should be a certificate, it was issued and it's gone missing, your partner can complete a share/stock indemnity form and the CoSec can issue a new share following receipt of this.
The residents group meet to make decisions that the management company then enact.
It is normal practice. The onus is still with the management company to have all this in hand.
Having said that, does someone other than the residents own the Freehold? That would change things as they would own 100% of it and the residents would own the rights to live / own a flat for xx years.
I'm not certain but I don't think the residents own the freehold.
Freshstart, are the Managing Agents acting as the company secretary or is it a member of the Residents Management Company?
I think if he can, your partner would be best advised to get this question answered and speak to whoever it is directly.
If I understand your post about your solicitors saying that an indemnity certificate 'doesn't apply' correctly, one or both of these parties doesn't know what they're talking about / or isn't in possession of the facts.
The company secretary should have an indemnity certificate template that has been written for the company in their books, but even if they don't, it isn't a prescribed document, you could just fill in a template similar to this and submit it.
Managing agents are acting as company secretary.
Don't think residents own freehold.
Sorry for brief typing am on phone.
OK, in that case, I'd bypass his solicitors, approach the agent directly and insist on speaking to whoever in the agency is dealing with this. If they duck calls or continue to be obtuse, get aggressive.
This type of task/enquiry tends to get put to the bottom of the tray unless the leaseholder or someone on their behalf pushes it to the top.
Surely an easy way to find out if there is a share certificate would be to ask your neighbours if they have one? If no one has one, then no one was issued them?
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