Do I have to pay company costs?

[hairbrush]

The director of 'our' freehold company has denied me and some others the right to be shareholders of the company which manages the block of flats we live in. He has defended his decision by citing the company rules which appear to give him a right to refuse issuing new shares. As non shareholders, do we have any obligation to contribute towards the running costs of the company?

[atticus]

Look at your lease. I expect that provides that you should contribute to the cost of managing the block.

[hairbrush]

I'm referring specifically to the costs of running the company rather than the costs of running the block. For example, would I have to pay for D&O insurance which is currently listed on my service charge account but not in the lease?

[atticus]

On the face of it that would seem unlikely. Have you asked on what basis they say you are obliged to pay? Asking that question is often a good starting point.

[hairbrush]

We have challenged him but he refers us to the lease which states that the freeholder is indemnified by the lessees against all costs. Is a blanket term enough?

[atticus]

I would wish to see the lease. A well drafted lease will detail the costs that are to be paid.

[hairbrush]

The indemnity clause crops up more than once and appears to cover costs relating to routine building costs such as maintenance and buildings insurance. I don't think the clause is an umbrella term for everything the company has to pay for. If the freeholder refuses to separate and remove costs which aren't recoverable, is the whole service charge invoice invalid?

[hairbrush]

Can I send you a copy of the lease? I would have to spent a bit of time blocking out the names first.

[atticus]

Unlikely. I recommend that you ask someone with some knowledge or experience to look at your lease.

(This is in reply to the post two above this.)

[dls]

It really is impossible to answer without sight of the documents.
I question the likelihood that new shares are necessary.
The basic answer is not to react to pettiness with similar.thecost to you of a dispute will vastly exceed the sums now at issue.