Should I pay this blast from the past?

Question: I own a flat in a warehouse development. A few years ago, all the residents at the development got together and bought the freehold from the developer.

I recently remortgaged the flat and now I have been told that the lease has a clause in it that requires me to notify the lessor’s solicitors about the remortgage and to pay a fee for the privilege.

Is this necessary now that I am a member of the freehold company?

Answer: This situation is actually one of the most efficient ways to deal with the management of a block of flats. It is often described by estate agents as “shared freehold”. Flat-owners often think of themselves as “owning” the freehold.

However, technically this is not the case. This is because the company has a separate legal personality from its members (the flat-owners) and it is the company that owns the freehold. This means that, when a flat-owner sells a flat, the freehold ownership is not affected, but the new owner then becomes a member of the company.

This saves the necessity for any conveyancing on the freehold title, when the flats are bought and sold.  Details of changes of ownership and mortgages do need to be kept by the company and the company often has its own solicitors - hence the continuing requirement to notify those solicitors and pay their administration fee.

What's your problem?

If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors www.ttuk.com.