One Freeholder Died and Now Nobody Can Sell the Flat

The sale has stalled because there is nobody left who can lawfully sign. That is what happens to a share of freehold when one of the freeholders dies and nothing is done about it: the flat itself is fine, the lease is fine, the buyer is willing, and the transaction cannot complete because the freehold is registered to, or controlled by, someone who is no longer alive.

What you do about it depends entirely on how the freehold was held, and there are two quite different arrangements hiding behind the same phrase. If the freeholders owned it in their own names, the position is usually straightforward and cheap to fix. If a freehold company owned it, and that company has been struck off at Companies House, you are looking at months of work and a legal bill before anyone can sell.

Either way, the problem does not fix itself, and it gets more expensive the longer it sits. A flat with an unresolved freehold is not just unsaleable. It is usually unmortgageable too, which removes most of the buyers who might otherwise have taken it on.

Share of freehold describes two different arrangements

Estate agents use the phrase to mean the same thing in both cases: your flat comes with a stake in the building's freehold, so the block controls itself rather than answering to an outside landlord. Legally the two structures behave nothing alike, and after a death the difference decides everything.

In the personal names structure, the freehold title at HM Land Registry names the flat owners themselves as proprietors, holding it on trust for everyone with a flat. No more than four people can be registered as legal owners of land, so this only works in small blocks — typically two to four flats. It is common in converted houses.

In the company structure, a residents' or freehold company is the registered proprietor of the freehold, and each flat owner holds a share in, or is a member of, that company. Any block with more than four flats has to use this route, and plenty of smaller blocks use it too because it survives changes of ownership more tidily.

You can tell which you have in ten minutes. Order the freehold title from HM Land Registry and look at the proprietorship register: it will name either individuals or a company. If it names a company, search that company at Companies House and check whether it is active, and whether its filings are up to date. Do this before you instruct anyone. It is the cheapest hour of the whole exercise.

One thing share of freehold is not is shared ownership, which is a different arrangement entirely, with rent payable to a housing provider on the part of the home you do not own. If that is what you are dealing with, read who pays the shared ownership rent after the owner dies instead.

When the freehold is in joint names

Here the news is generally good. Freeholders in this structure almost always hold the legal title as joint tenants, which means the deceased's interest in it passes automatically to the surviving co-owners on death, outside the will and without waiting for probate. There is nothing to inherit and nothing to transfer.

Bringing the register up to date is a formality: a death certificate and HM Land Registry's form for removing a deceased joint proprietor, lodged free of charge. Do it as soon as the death certificate is available, rather than at the point of sale, because it is the sort of task that is trivial in month one and awkward in year five when the certificate has been mislaid.

Two traps sit inside this apparently simple position.

The first is the sole surviving trustee problem. If a two-flat house had two co-freeholders and one dies, the survivor holds the freehold alone. A sole trustee cannot give a valid receipt for capital money, so if the freehold is ever sold, or a lease extension granted for a premium, a second trustee has to be appointed to join in. It is a simple deed, and it is a nasty surprise a week before completion.

The second is that survivorship moves the legal title only. The beneficial interest — the flat owners' underlying stake — is a different question, and in a great many blocks it was never documented at all. When the deceased's flat is sold, the buyer's solicitor will ask for evidence that the freehold share genuinely follows the flat. If there is no declaration of trust and no company, that evidence may have to be constructed from correspondence and conduct, and it takes time.

The deceased's flat itself passes under their will or the intestacy rules in the ordinary way, which is where families sometimes find that the person now entitled to it is not the person living in it. Where a second marriage is involved, that becomes its own dispute, set out in whether your stepchildren can force the sale of the house. Where several beneficiaries share a property and one of them lives there, see three siblings inheriting a house where one of you lives in it.

When a company owns the freehold

If the freehold is registered to a company, the freehold does not move on a death at all. The company still owns it. What forms part of the estate is the deceased's shareholding in that company, and that passes under their will or the intestacy rules like any other asset.

In practice the mechanics run like this. The personal representatives obtain the grant. They then either transfer the share directly to the buyer of the flat on completion, or transfer it to the beneficiary who is inheriting the flat, using a stock transfer form. The company's articles usually require the directors to approve the transfer and to update the register of members, and well-drafted articles tie the share to the flat so the two cannot be separated. The register of members, not the share certificate, is what actually determines ownership — certificates go missing constantly and can be replaced.

The share is an asset that almost nobody remembers to list. It rarely has a meaningful value on its own, but it has to appear in the estate paperwork and it has to be dealt with, and it is precisely the kind of holding that surfaces two years later when the flat is being sold. Small, forgotten assets are a running theme in estate administration, from freehold company shares to the PayPal and Wise balances nobody knew about.

The more urgent problem is usually the directors. A company acts through its directors, and if the only director has died, nobody can sign consents, approve transfers, renew the block insurance or file anything at Companies House. Where a private company is limited by shares, the model articles allow the personal representatives of a sole shareholder-director to appoint a new director. Where the company is limited by guarantee — which is the structure many residents' freehold companies actually use — there is no equivalent provision, and putting things right may need a court application. If your block's company has only one or two directors, the practical steps are the same as for any small company in that position, covered in what changes when a director dies and there are two of you.

The worst version: the company has been struck off

Residents' freehold companies get struck off with depressing regularity, and always for the same reason. The director who handled the filings dies, moves, or simply loses interest; the confirmation statement and accounts are not filed; the registrar sends warnings to an address nobody reads; and eventually the company is dissolved.

When a company is dissolved, its property does not pass to its members. It passes to the Crown as bona vacantia, administered in England and Wales by the Treasury Solicitor. So the freehold of your building is now owned by the Crown, the company that used to manage it does not exist, and there is nobody who can grant a lease extension, give consent to alterations, or sign anything at all.

Three consequences follow immediately, and they are all worse than they sound.

• The block's insurance is in doubt. A dissolved company cannot hold a policy or make a claim on one. If the building burns or floods while the company is gone, the argument about who was insured will be long and expensive.
• Nobody can extend a lease. Leases shorten every year, and a short lease is what makes a flat unmortgageable. In a share-of-freehold block an extension is normally cheap and easy — but only when there is a freeholder able to grant it.
• Service charge cannot properly be collected or spent. Money paid into an account in the dissolved company's name is, strictly, the Crown's. Meanwhile the building still needs repairing.

Why the flat becomes unmortgageable as well as unsaleable

Cash buyers exist, but most buyers need a mortgage, and a lender's requirements are what actually stops these sales. A lender wants the freehold title in order, a functioning entity able to insure and manage the building, and enough unexpired lease term to comfortably outlast the mortgage. A register naming someone who died six years ago, or a freehold company struck off at Companies House, fails all three at once.

The buyer's solicitor will report the defect to the lender, the lender will decline, and the sale falls through — usually after the seller has paid for searches. Word gets round the local agents, the flat sits, and eventually it sells at a discount to a cash buyer who is pricing in the cost and risk of sorting the mess out. That discount is invariably larger than the cost of fixing it would have been.

For a bereaved family, the timing is the cruel part. The mortgage on the flat carries on regardless, and if the deceased was the main earner the survivor is meeting it from one income while the one asset that could solve the problem cannot be sold. That squeeze is described in one parent, one wage, nursery fees and a mortgage, and it is the practical case for cover that pays out quickly and independently of any sale. Life cover written in trust pays to the trustees rather than into the estate, so it does not wait for a grant of probate or for a freehold to be untangled. If a death in your block has shown you how long a stuck flat can stay stuck, you can get life insurance quotes and have an FCA-authorised broker look at cover against the mortgage balance and term. What can be offered, and on what terms, depends on underwriting.

It is worth saying plainly that these situations usually begin with a death nobody expected, in a block where the paperwork was informal because everyone got on. That is not carelessness; it is how most small freehold companies are run. It is also why a sudden death in your thirties or forties leaves such a tangle behind.

Putting it right, and how long it takes

Start by establishing the facts: the freehold title from HM Land Registry, the company's status and filing history at Companies House, the lease and any declaration of trust, and the grant of probate for the deceased if one has been obtained. Then the route follows the structure.

Where the freehold is in personal names, lodge the form to remove the deceased proprietor, appoint a second trustee if only one co-owner is left, and document the beneficial ownership properly while everyone still remembers what was agreed. This can be done in weeks.

Where a company is still active but its officers have died, the fix is to appoint directors and update the register of members, following the articles. Where the articles do not permit it, an application to court may be needed. Weeks to a few months.

Where the company has been dissolved, it usually has to be restored to the register. There are two routes: administrative restoration, available to a former director or member where the registrar struck the company off, generally within six years of dissolution; and restoration by court order, which is broader in who can apply and what it can achieve, and which also generally runs to a six-year limit. Restoration treats the company as though it had never been dissolved, and property that passed to the Crown ordinarily returns to it. Budget several months and a solicitor. Where restoration is not available, the alternative is to deal with the Treasury Solicitor to acquire the freehold from the Crown, which is slower still.

Source: Companies Act 2006, sections 1012 (property of a dissolved company as bona vacantia), 1024 (administrative restoration) and 1029 to 1032 (restoration by court order); Law of Property Act 1925, section 34 (maximum of four registered proprietors). Published on legislation.gov.uk under the Open Government Licence v3.0. Company status can be checked free on GOV.UK.

Once it is fixed, keep it fixed. Appoint at least two directors so the company survives one death. Make sure Companies House holds a current address and that reminders reach a living person. Keep the freehold title, the leases and the company records together, and tell someone else in the block where they are.

Scotland and Northern Ireland

Scotland does not have leasehold flats in the way England and Wales do. Long residential leases were largely converted to outright ownership by the Long Leases (Scotland) Act 2012, so there is usually no freehold to share: each owner owns their flat, with common parts owned in shares under the title deeds and repairs governed by the Tenements (Scotland) Act 2004. Where the deceased held a share of common property, it forms part of the estate and the executor needs confirmation before it can be transferred. Company law is the same across the UK, so a Scottish residents' company can be struck off and restored on the same basis, with bona vacantia in Scotland administered by the King's and Lord Treasurer's Remembrancer.

Northern Ireland has both freehold and leasehold flats, and land is registered through Land Registry Northern Ireland or the Registry of Deeds. The company law route is identical, because it is UK-wide, but the property mechanics and the grant procedure differ from England and Wales, so take Northern Ireland advice on the title side. Property held outside the UK is different again, and governed by the law of the country it sits in — see the Spanish apartment, the mortgage and forced heirship.

The rest of this topic, including what a surviving borrower owes and what a lender can do while an estate is unresolved, is collected in our guide to mortgages and property when someone dies.

Frequently asked questions

What happens to a share of freehold when one freeholder dies?

It depends on how the freehold is held. Where the freeholders own it jointly in their own names as joint tenants, the deceased's interest passes automatically to the survivors and the register is corrected with a free HM Land Registry form. Where a company holds the freehold, the shares in that company pass under the deceased's estate instead.

Why can a flat become unsaleable?

Buyers' lenders want the freehold properly held and the building's management functioning. A register naming someone who died years ago, or a freehold company struck off at Companies House, means nobody can validly grant consents, insure the block or sign documents, so the lender declines and the sale stalls.

How is a dissolved freehold company put right?

The company can usually be restored to the register at Companies House, either administratively or by court order, after which directors can be appointed and the freehold dealt with again. It takes months and legal costs, which is why it is best tackled before the flat is marketed rather than after an offer is accepted.