Freeholder - Abbotdeal
Abbotdeal
The original central block of Augustus Court was believed to have been built in the 1950s as accommodation for the local police force. In the mid-1980s it was acquired by Dicemews Ltd and redeveloped into the structure it has today with the addition of the stairwell for Nos 13-15 and, at the other end, the front and rear wings plus stairwell for flats 1-9. As the freeholder, it was Dicemews that offered and sold the 15 leases that resulted from the redevelopment. In 1996, all 15 owner/ lease-holders at the time negotiated with and purchased the freehold from Dicemews and agreed to share ownership of it equally between the 15 leased units.
There were primarily three options on how to handle the newly acquired freehold:
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to upgrade every lease to reflect the addition of a share in the freehold,
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to register the Residential Management Company, Termstake, as the new owner, or
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to set up a separate company to own the freehold and for the 15 owner/leaseholders to be the sole equal owners of the new company.
On advice from our solicitors, the third option was taken. The enormous overhead and additional cost (to each leaseholder) of the first option together with the high probability of legal complications further down the line rendered this one not viable. The second option was not chosen because it would have meant that ownership of the property would have been lost or, at minimum, at serious risk if Termstake had to be shut down or go into receivership for any reason.
The third option keeps the freehold entirely separate from the management of the property and is not only legally and financially cleaner, it also protects the freehold better. Abbotdeal Property Management Co. Ltd (Abbotdeal) is the name of the company that was set up for the sole purpose of owning the freehold and each lease is associated with a single, equal share in the company. There are no financial transactions relating to Abbotdeal so the Annual Return to Companies House shows the company as being ‘dormant’. This method is the one most commonly used by many other similar share of freehold arrangements in the UK.
As with Termstake, there are two Directors appointed to ensure Abbotdeal complies with Companies House regulations. Termstake covers the minimal fees charged by Companies House for the Annual Return for Abbotdeal - the small number of interactions for the company being handled by the Directors at no cost.