Share of Freehold company in a real mess?

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Share of Freehold company in a real mess?

I own two properties in a development of 52. Each property owns 1/52nd of the freehold, so I own about 4%. I was also a director (1 of 5).

In late November, one director and the managing agent were starting to be very obstructive, wouldn’t allow a vote for a chairperson, wouldn’t allow voting for decision making, kept vetoing decisions. If any of us asked for visibility to the company bank account, we were shut down and told we were being ‘confrontational’. You get the idea. Yes I realise that’s not legal for one director to put us in this situation but it happened because two people retired (old chairman and old managing agent) who had essentially set us up to fail, we had got into a bad place and 3 of the 5 were trying to fix it (one was absent due to personal reasons).

In additon our new managing agent turned out to be pretty useless, volatile, divsive, etc. A one-woman band, shoehorned in by the retiring managing agent. No qualifications, not other blocks being managed, doesn’t have a company, doesn’t have PI or PL insurance, nor understand what they are. No accredditation and sole access to the company bank account which holds over £200k. There is zero oversight on the account, and no limits on how much she can transfer, who to or what device to unilaterally do it on. They don’t have a contract and cannot provide one.

Worst of all, they have been found to be telling many untruths. When asked why there is no contract, she says she gave one to the board which was ignored – completely false. When asked if she manages other developments, one day will respond ‘many’ and the next ‘none’, depending on what answer is most helpful to her at the time.

Anyway, 4 directors resigned, hoping this would cause an AGM so all shareholders could appoint a new board who could get on with resolving all the issues. Unfortunately the remaining director refused to resign and is in cahoots with the managing agent. I would say about 50% of the shareholders who are aware of the situation find this both distressing and unhelpful. The company is not functioning, our insurances may be voided due to this and it’s a massive mess.

The remaining director has now called an AGM with one topic on the agenda – to appoint his mate in the flat below and then appoint him as chairman. They called it as a virtual meeting on the 22nd december at 7.30pm. Note this development is two large blocks, consisiting of mainly 3 & 4 bedroom houses. These two guys live in tiny corner flats and are not representative of the shareholders whatsoever. The mate below who is being appointed has quit twice from the board after getting into bitter aguments with other shareholders.

Both the director and managing agent are either ignoring all shareholder emails or responding in the most ineffective way to simply stall or delay.

Having read the M&A of A several times, it’s missing a lot, such as timeframes, and is worded very briefly, which these three people are using to hide behind.

What can any of us legally do? We want a proper meeting. We want to discuss and ask questions. Many of us want to dismiss the managing agent.

Is there something which is statutory in the 2006 Companies Act which can help us in this situation get a light shone on the situation? How can we force these people hiding behind emails and a one-topic Zoom meeting where no shareholder is allowed to speak?

I suspect we need actual real legal advice but wouldn’t know where to start… Help!

Alex

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Landlords risk fines, bans and bankruptcy – The answer?

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Landlords risk fines, bans and bankruptcy – The answer?

The conversation among private landlords has changed. It is no longer about yields, regulation or market cycles, it’s about survival. The publication of the government’s new civil penalty tables has pushed the sector into unfamiliar territory, where the financial consequences of ordinary operational mistakes are measured in five-figure sums, and the prospect of a banning order is no longer remote.

Across forums, advisory meetings and industry groups, landlords are expressing the same concern. They feel exposed, and they feel targeted. Some now feel unwelcome in the very market they have supported for decades. The shift has been sudden, and it has reshaped expectations about what it means to let property in the UK.

This sense of unwelcome is not just emotional. It is reinforced by policy decisions that introduce penalties large enough to destabilise a portfolio and enforcement powers strong enough to remove a landlord from the sector entirely. Meanwhile, other governments in Europe are signalling the opposite intention. Portugal’s recent move to reduce rental tax to 10% is a striking reminder that not every country is choosing to drive out private investment.

This divergence matters because landlords are increasingly comparing risk, reward and political climate across borders. The UK appears to be moving in one direction while competitor jurisdictions move in another. The consequences for supply, investment and market stability will be felt long before the first banning order of the new regime is issued.

Landlords are right to be concerned. The risks they face are significant, and for some, the financial outcomes can be terminal.

The new civil penalty tables make the scale of the risk impossible to ignore. A selective licensing breach now begins at £12,000. A possession error begins at £30,000. Reletting during a restricted period is set at £25,000. Breaching a banning order carries a starting penalty of £35,000. These are not maximums, they are baselines. They reflect the government’s expectation that councils will enforce actively and consistently.

The escalation is not limited to fines. Councils now have a clearer pathway to apply for banning orders. These orders do more than punish, they prohibit. A banning order removes the landlord from the sector entirely, revokes licences, forces properties into management arrangements and places the individual on the national rogue landlord database. Once imposed, recovery is difficult and in many cases impossible.

The combination of high penalties and lifetime commercial consequences raises a fundamental question about the direction of policy. Private landlords supply most of the rental properties in the UK, yet they are now subject to financial risks that exceed those imposed in many sectors of the regulated economy. A minor administrative failure in property management can now attract penalties that surpass those issued for dangerous conduct in other areas of law.

The effect on behaviour is already visible. Landlords who once focused on refurbishment, portfolio growth or strategic refinancing now spend much of their time calculating whether the returns justify the risks in the long term.

This is not a prediction of market collapse, it is a simple observation. When a government raises the cost of participation, some participants will leave. When another government signals it wants landlords to stay, as Portugal has done by reducing rental tax to 10%, investors pay attention.

The UK can sustain a strong rental market only when private investment is respected, stable and rewarded proportionately. At present, the message being received by landlords is the opposite. Uncertainty is rising, penalties are rising, and administrative risk is rising. That is not a sustainable foundation for a sector that houses millions of people.

The coming year will determine how landlords respond. Some will modernise their processes and remain, others will scale back or exit entirely, but every landlord should recognise that the risk calculus has changed. A fine can now wipe out profit, a ban can wipe out a business, and bankruptcy is not an abstract possibility for those with high leverage and sudden enforcement action.

The warnings are clear; Landlords risk fines, bans and potential bankruptcy. The choices made now will determine who survives the new era of enforcement and who does not.

For landlords who decide not to absorb the new risks, the next question is how to exit safely and sensibly. Selling strategies were discussed in my recent article linked below.

https://www.property118.com/should-you-sell-with-tenants-in-place-a-practical-strategy-many-landlords-overlook/

However, selling is only half of the decision. The other half is where to place the capital once the exit is complete. Rising regulatory risk in the UK does not mean investment opportunity has disappeared altogether. It simply means the playing field has changed. Some investors will look overseas to jurisdictions offering stability and lower taxation. Others will redirect capital into asset classes with lower regulatory exposure. The important point is that landlords have options, and with careful planning the proceeds of a property sale can be deployed in a way that preserves income while avoiding the escalating compliance burden. I recently published an article on this subject too – see link below.

https://www.property118.com/where-to-invest-if-i-sell-my-rentals/

These decisions are not easy, but the environment now demands clarity. Holding rental property is no longer a passive activity (was it ever?). It has become a highly regulated business with heightened exposure, serious penalties and irreversible consequences for those who fall foul of the rules, intentionally or not. Whether landlords stay or leave will depend on their appetite for risk, their ability to adapt and the strength of their long-term objectives.

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Tenants prioritise EPC ratings when choosing a home

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Tenants prioritise EPC ratings when choosing a home

As tenants increasingly seek more energy-efficient homes, many landlords are choosing to sell properties with lower EPC ratings, according to a new report.

A report by Hillarys reveals a stark postcode divide and EPC upgrade challenge for landlords, with some property types costing nearly £1,400 more than others per year to heat.

As previously reported on Property118, almost two in five landlords (38%) intend to sell their property in the next year, (38%), with energy efficiency requirements cited more often than any other factor influencing their decision to sell.

Larger and detached properties may require greater retrofit investment

Hillarys warn lower EPC-rated properties may become more difficult to let, as 86% of renters are now prioritising energy efficiency when choosing a home, and more than half (52%) are willing to pay a 10% premium for a higher-rated property.

The retail company say lower-rated EPC properties expose tenants to higher energy costs, with an E-rated property (£1,942) costing 313% more per year to heat on average than an A-rated property (£470).

The findings reveal landlords will have to spend thousands of pounds on EPC improvements, as detached properties have the highest heating costs. In the UK, the majority of people live in houses (78%), which are the least energy-efficient and the most expensive property types to heat.

Detached properties are typically the most costly, with detached houses averaging £1,974 per year, more than triple the annual cost to heat an enclosed end-terrace flat (£574).

Hillarys warn larger and detached properties may require greater retrofit investment to remain competitive if tenants continue to choose homes based on running costs.

Small cost-effective measures can improve tenant appeal

Lisa Cooper, head of product at Hillarys, says landlords can take smaller, cost-effective measures that can improve tenant appeal while longer-term EPC work is underway.

She said: “Retaining heat by preventing air leakage at windows is key to ensuring bills stay low and properties warm. Small, cost-effective changes, such as sealing draughts, using thick curtains and ensuring windows are properly insulated, can all help.

“Another great solution to maintaining heat inside is installing thermal blinds, which have a unique honeycomb structure. This clever design traps air within its cells, providing an extra layer of insulation at your windows, reducing heat loss by up to 55%.”

In York, almost two-thirds of homes have an EPC rating of D or below

The study also reveals that more than half of the properties in the top ten costliest areas to heat have an EPC rating of D or lower. In York, almost two-thirds of homes have an EPC rating of D or below, and in Stoke-on-Trent, more than half (52.03%) fall into the same category.

Historic and coastal locations tend to have the highest energy costs, including York (£1,181), Dundee (£1,134) and Bath (£1,064), where older stone buildings and exposure to harsher weather conditions contribute to rising energy bills.

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