Q: Although our residents’ association has been established for many years and is consulted by the freeholder’s agents, I don’t think we hold any particular legal status. What are our options going forward? For example, should we form a company and what kind of company?
FPRA Committee member Bob Slee replies:
You have indicated that you are consulted by your freeholder’s agent but you don’t say whether you have been formally recognised as an association by the freeholder. This is quite important as it gives you legal rights to be consulted over major works, appointment of managing agents, to have access to documents relating to service charges and to be able to appoint a surveyor to carry out an investigation into service charges.
In order to secure formal freeholder recognition under the terms of Section 29 of the Landlord & Tenant Act 1985, your freeholder can insist that you are properly constituted as a residents’ association in accordance with the stipulations of the Act. The FPRA produces a publication entitled ‘A Guide to Formation, Recognition and Running Your Association’. It is available to order from the publications drop-down menu on the FPRA website and costs £18.
A residents’ association does not require any additional legal status other than that described above. However, if you were contemplating an application for right to manage from your freeholder, or even a buy-out of the freehold, then it would be appropriate to form a company limited by shares which does have increased legal status under Landlord & Tenants and Companies legislation. If and when you find yourselves in that situation you may want to consult us again.
Question submitted May 2018