The K M Links Game - November 2024 Week...
Quizzes & Puzzles16 mins ago
about to exchange but a sudden 'snag...'
I was told yesterday that we were all set to exchange contracts on my flat sale (had been an issue with absent landlords but both landlords have now signed freehold over to me) and my house purchase, yet this morning I was informed that one of the landlords solicitors said today that the Company Director (A company was down as 1 landlord) who signed the freehold over to me was not 'allowed' to sign it over. This has now meant all contracts are now on hold.
Why would a Director of a company not be able to sign anything on behalf of that company? The company hadnt known it was actually a part- landlord and problems with the lease have arisen as their original solicitors mis-wrote part of the lease and missed a paragraph out, causing all sorts of problems!
The landlords have never acted as landlords, been in touch or even collected the �1 peppercorn rent.
So why is their solicitor now saying the Director cannot sign it over as he cannot sign on behalf of the company?
Please help! Am frazzled with all of this now! Thanks
Why would a Director of a company not be able to sign anything on behalf of that company? The company hadnt known it was actually a part- landlord and problems with the lease have arisen as their original solicitors mis-wrote part of the lease and missed a paragraph out, causing all sorts of problems!
The landlords have never acted as landlords, been in touch or even collected the �1 peppercorn rent.
So why is their solicitor now saying the Director cannot sign it over as he cannot sign on behalf of the company?
Please help! Am frazzled with all of this now! Thanks
Answers
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Hi there VannaB ~ sorry to hear of your problems, it's always a nightmare when things like this happen. I hope that your solicitors resolve it for you soon.
As to why the director cannot sign - The director may not be able to sign for several reasons. He may no longer work for the company, may not have been in a position to agree this (it may be because he /she is in dispute with other directors, or company policy maintains that director 'x' deals with this aspect of the business and director 'y' deals with something else) or may have been made bunkrupt (therefore legally no longer able to be a participating director). Or (hopefully) it is something as simple as he is a director in name only and has no say in what happens (e.g. he helped a family member set up a business). In which case the current MD would sign it and everything will be sorted out.
I do hope this resolves itself quickly for you. Good luck
Sam
As to why the director cannot sign - The director may not be able to sign for several reasons. He may no longer work for the company, may not have been in a position to agree this (it may be because he /she is in dispute with other directors, or company policy maintains that director 'x' deals with this aspect of the business and director 'y' deals with something else) or may have been made bunkrupt (therefore legally no longer able to be a participating director). Or (hopefully) it is something as simple as he is a director in name only and has no say in what happens (e.g. he helped a family member set up a business). In which case the current MD would sign it and everything will be sorted out.
I do hope this resolves itself quickly for you. Good luck
Sam
Assuming the landlord is a limited company...
There could be a number of reasons such as a director having resigned or being struck off or some other action prevents him from signing documents eg an injunction. Maybe for some reason there are only certain authorised signatories and he isn't one of them.
A property transfer must be by way of a deed and signed as a deed, in the case of a company by either 2 directors or 1 director and a company secretary (you can't have a limited company with one sole officer (ie director or secretary), there can be only one director but must be a company secretary or other director). Unless validly executed the transfer is not valid.
Another reason could be in the company documents. Each company has an articles and memorandum of association which set out what the company can and cannot do.
Could be the company is not allowed (ie there is not power in the documents) for them to transfer property or similar. It is usually a standard clause but could have been taken out for some reason.
There are also some company formalities which may not have been carried out as yet such as if any resolutions, meetings etc... are required.
As you are, I assume, selling a lease of your flat, if you are also now getting the freehold I assume this is what will now be transferred to your buyer as in law you can't be your own landlord (which you would if you owned the lease and freehold) so the two merge in common law so the lease effectively disappears and the freehold remains which would then be transferred to the buyer.
If this is the case then the transfer from the current landlord of the freehold interest would need to take place prior to exchange as the contract will for the above reason, I'm assuming, be for the freehold title, so you must own it before you can become legally bound to selling it.
Probably best to
There could be a number of reasons such as a director having resigned or being struck off or some other action prevents him from signing documents eg an injunction. Maybe for some reason there are only certain authorised signatories and he isn't one of them.
A property transfer must be by way of a deed and signed as a deed, in the case of a company by either 2 directors or 1 director and a company secretary (you can't have a limited company with one sole officer (ie director or secretary), there can be only one director but must be a company secretary or other director). Unless validly executed the transfer is not valid.
Another reason could be in the company documents. Each company has an articles and memorandum of association which set out what the company can and cannot do.
Could be the company is not allowed (ie there is not power in the documents) for them to transfer property or similar. It is usually a standard clause but could have been taken out for some reason.
There are also some company formalities which may not have been carried out as yet such as if any resolutions, meetings etc... are required.
As you are, I assume, selling a lease of your flat, if you are also now getting the freehold I assume this is what will now be transferred to your buyer as in law you can't be your own landlord (which you would if you owned the lease and freehold) so the two merge in common law so the lease effectively disappears and the freehold remains which would then be transferred to the buyer.
If this is the case then the transfer from the current landlord of the freehold interest would need to take place prior to exchange as the contract will for the above reason, I'm assuming, be for the freehold title, so you must own it before you can become legally bound to selling it.
Probably best to
Hi Jenna ~ I don't want to hi-jack Vanna's thread but If this is a leasehold flat, then you buy the freehold, what would happen if (lets say for example) the flat is the middle part of a building with another flat above and one below. Does it mean you are the landlord for the flat above and the one below? That you own the freehold on someone else's ceiling and floor?
If the purchaser of the flat is now the freeholder, what happens to the leases on the other two flats?
If the purchaser of the flat is now the freeholder, what happens to the leases on the other two flats?
Hi,
You would be the freeholder for the whole of the land, the freehold will be subject to the 2 leases granted out of it for the other 2 hypothetical flats.
You would in this instance be the landlord of the two flat leases.
An easier example may be if you own a house with a garage built in, say there in a bedroom over the garage. If you grant a long lease of the garage then the you still own the freehold of the bit above, it is just that the freehold is subject to the garage lease. The freeholder would also be the landlord or the garage lease.
If the garage was sold off to another party such as the owner of an immediately adjoining property as a freehold parcel of land then the part of the building above would become a flying freehold.
Does that make sense?
You would be the freeholder for the whole of the land, the freehold will be subject to the 2 leases granted out of it for the other 2 hypothetical flats.
You would in this instance be the landlord of the two flat leases.
An easier example may be if you own a house with a garage built in, say there in a bedroom over the garage. If you grant a long lease of the garage then the you still own the freehold of the bit above, it is just that the freehold is subject to the garage lease. The freeholder would also be the landlord or the garage lease.
If the garage was sold off to another party such as the owner of an immediately adjoining property as a freehold parcel of land then the part of the building above would become a flying freehold.
Does that make sense?
:-( I've got a headache now LOL. Yeah I see what you are getting at. Thanks for the explanation although, being the inquisitive person that I am, it makes me want to ask what would happen if the other two leasers (or should that be leaseholders? ~ lessees?) dispute the granting of the transfer, say they want to buy it themselves for some reason? Opened a can of worms here haven't I? ;-0
Oh good grief man :) Google leasehold enfrachisement, maybe not if you have a headache mind lol :)
In fact try here...
http://www.lease-advice.org/cegsframe.htm
If the building, leases and leaseholders etc... are eligible it should have been checked whether an notice has been received in pre-contract enquiries. If anything is served after exchange then if the solicitors are aware it "should" be revealed in pre-completion replies to requisition on title.
In fact try here...
http://www.lease-advice.org/cegsframe.htm
If the building, leases and leaseholders etc... are eligible it should have been checked whether an notice has been received in pre-contract enquiries. If anything is served after exchange then if the solicitors are aware it "should" be revealed in pre-completion replies to requisition on title.
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