My Management Company has been dissolved!
It is a fairly common occurrence for leasehold management companies to be struck off the register at Companies House for failing to file statutory documents (usually annual returns). This typically occurs with small owner-managed properties where the flat owners have not kept an eye on Companies House deadlines. It is a simple mistake to make but can lead to big problems as once a company is dissolved, its bank account will be frozen and its assets are deemed Bona Vacantia and will belong to the Crown. If the management company owns the Freehold of the property, this will pass to the Crown and the resultant defective lease will mean that the flat owners will be unable to sell or mortgage their property.
There are two options available to rectify this situation; an application to the court to restore the company or an Administrative Restoration. Both options are only available within six years from the date of dissolution of the company and in circumstances like this the application would be made by a former director or member of the company.
There are advantages and disadvantages of both methods and the route to take will very much depend on the circumstances. However, both options involve applying to the Treasury Solicitor to ‘disclaim’ (give up their interest) in the asset and will usually take between six and ten weeks to complete.
There are also occasions when it is not the management company that has been dissolved but the original developer of the property. In these circumstances it may not be possible to restore the company and, if this is the case, another course of action can be taken.
We were recently instructed by a management company who was having problems with a part of their car park. The developer company which originally built the estate had long since been dissolved and the land in question had passed Bona Vacantia to the crown. The management company wants to acquire the land so it had control over it for effective estate management. This involves applying to the Treasury Solicitor to purchase the property from the Crown. The Treasury Solicitor will want to ascertain that you are the most appropriate person to sell the land to and also ask the District Valuer to value the land. However, there is a minimum purchase price of £1,000.00 and you will also have to pay the costs of the District Valuer and Treasury Solicitor.
If you are having problems with dissolved companies, whether management companies or otherwise, please contact Doug Armstrong for some initial advice on the best steps to take in your circumstances.