Joanne Wood, Solicitor at Mullis & Peake LLP, explains how early legal involvement and careful management help ensure smooth freehold transfers to Residents’ Management Companies (RMCs). She highlights the importance of transparency, standardised documentation, and adherence to statutory procedures in protecting both developers and residents during the handover process.
Practising property law in a regional solicitor’s practice brings a variety of work and clients. Over the last few years, several clients that have purchased freehold reversions of blocks of flats specifically for the ground rents. Our clients have not been greedy and have been happy to accept a nominal annual ground rent with gradual increases as opposed to the escalating ground rents of the type that have been complained about in recent years.
Instructions for those types of transactions have now scarce but, as a result of our experience of such matters and long-standing good working relationships with developers such as Weston Homes, we have been fortunate enough to have been instructed to act on behalf of RMCs acquiring the freehold interest of development sites – completion being effected on the sale of the last unit.
In order to minimise risk, ensure transparency and keep costs to a minimum, we are instructed at an early stage and generally at the outset of plot sales so as to be as closely involved within the drafting process as possible. This said, our relationship with some of the developers has meant that documentation has evolved to be in largely standardised form, subject only to necessary revision particular to each individual site.
Our involvement means that we are separate and in addition to the solicitors instructed to act on behalf of each buyer and separate and distinct from the developer and developer’s solicitors.
As solicitors to the RMC, we ensure that any procedures required by the Landlord and Tenant Act 1987 are followed, if required, and check that the relevant procedures and practices are in place for a smooth handover of the freehold interest and management responsibilities on completion.
Working closely with the developer’s solicitors, we can ensure that buyers of flats are given as much information as possible regarding the freehold transfer at the outset via the developer’s information pack. This is important to us given that we are not acting for the individual property owners but rather the RMC.
