Residents’ freehold and management companies

There are a variety of situations in which the owners of separate units in a residential block are brought together in a company context. For example, the freehold of a building containing flats on long leases can be owned by way of a company in which the individuals have a share. Sometimes the purposes of the company may be purely to regulate the management of the block.

As well as offering a comprehensive property law and conveyancing service for those situations where a jointly owned company is put in place for a property purchase, we offer a broad range of other services for these type of companies, which we generically refer to as residents’ freehold and management companies (“RFMCs”).

Our specialist solicitors regularly work together to advise agents, directors, and shareholders on all matters relating to RFMCs, whether relating to inception, day-to-day operations, or individual “one-off” matters such as disputes.

Unlike many firms with general expertise in areas such as company law, commercial litigation and residential conveyancing, our teams not only have the necessarily technical knowledge to provide effective advice in this area, but are experienced in addressing matters which arise in an RFMC context and working together to provide a unified service to our clients.

Examples of areas where we regularly assist RFMCs include Freehold purchase, corporate advice, leasehold advice, construction works and Leaseholder and shareholder disputes. 

We can advise leaseholders who wish to acquire the freehold of their property - whether through a voluntary process, as a response to notice served by the freeholder, or as a statutory collective enfranchisement claim. 

Setting up and managing a RFMC can be time consuming and costly. As well as assisting with the ongoing administration of a RFMC, our company law experts can also help to ensure that an RFMC is established in an appropriate way for a particular freehold purchase to try and minimise the likelihood of disputes arising in the future.

Areas of company law and corporate governance where we regularly advise include:

• preparing for and running board and general meetings
• drafting and reviewing articles of association
• shareholder consents and voting rights
• share capital matters including allotments
• compliance with the Companies Act 2006
• commonhold ownership

We can also assist with the more general operations of an RFMC, such as its contractual arrangements with other businesses such as managing agents, or compliance with laws of general application such as the General Data Protection Regulation (GDPR).

We have a vast array of expertise in dealing with property issues that may arise in managing RFMCs, both in terms of day to day management work to weightier issues such as addressing concerns around proposed works or other property disputes. More information can be found on our lease extension and freehold purchase page.

RFMCs often encounter issues when significant works are required. We advise on the whole life cycle of works, including “Section 20” consultation with leaseholders and the legal aspects of appointment of contractors, including reviewing and negotiating the terms of relevant contracts (including those based on JCT terms).

As with our approach generally, our advice in this area takes into account not just technical legal concerns but also practical and commercial factors such as managing the risks of a contractor becoming insolvent.

Unfortunately, as with any other business or organisation, an RFMC may find itself involved in disputes – whether with external parties (for example, in relation to construction works), or more internally focussed issues such as service charge disputes or disagreements over shareholders’ rights.

We have a wealth of experience in advising RFMCs, directors, and shareholders in relation to these matters.

Areas where we are often asked to assist include:

• service charge disputes
• payment disputes under construction contracts
• disputes with external parties, including in a construction context, regarding defective work
• removal of directors
• interpretation of constitutional documents
• disputes around shareholder rights or the treatment of shareholders (including unfair prejudice claims and other minority shareholder protections)