Legal Q&A: can a disgruntled neighbour stop me from extending my flat, even if the freeholder agreed?

The directors of our block's freehold company gave my plans the go-ahead but now say they can't sell me extra space because one leaseholder objects. Is this true?
Merrily Harpuer
Fiona McNulty16 August 2018

Question: I live on the top floor of a purpose-built block of 20 flats. We all have a share of the freehold. The directors of our freehold company agreed that I could buy the attic space and part of the communal landing to convert it into extra living accommodation.

However, they are now telling me that they cannot sell to me after all, because one leaseholder objects to my plans.

Are they allowed to do this to me? I may just have wasted thousands of pounds paying for plans to be drawn up and for the freeholder’s structural engineer’s and surveyor’s costs.

Answer: It appears the directors of your freehold company thought they had the power to sell those communal areas of the building to you but then subsequently discovered that they did not have that power.

Property management companies are common in cases like yours where the freehold has been sold to the leaseholders, who each have a share in the company that is responsible for the management of the building. The leaseholders therefore retain control of the company.

Unfortunately, such companies are often involved in disputes as leaseholders frequently disagree on matters. For this reason, the articles of association of the company should state clearly how decisions are to be made on its behalf. There may also be a shareholders’ agreement detailing the decision-making process.

In relation to your proposed purchase of communal parts of the building, you need to check whether such a decision has to be made unanimously by all shareholders, or by a majority of them, or if the directors have been given the power to make such a decision.

This important point should really have been addressed at the outset.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, Evening Standard, 2 Derry Street, W8 5EE. Questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.

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