At long last, that time of year has come around again: the annual general meeting of our residential block. Mr Millard and I own a couple of flats in the building; indeed, I am one of the directors of the management company that ostensibly “runs” the block. Of course, our lovely managing agents are the ones who carry out all the day-to-day work, but we appoint them – and, so, I suppose, the buck stops with us.

If you have a flat or two in a building like this, you might be involved in such an arrangement (provided you own the freehold, that is). Freeholds of residential blocks, especially new ones, are usually held by the development company that built them. After a certain period of time has elapsed, the builders tend to offer the freehold for sale, either to the owners of the block or to anyone else who might care to buy it.

It is probably quite a good idea for the owners to get together in a group and offer to buy the freehold. For a start, this prevents it ending up in the hands of someone else, someone who might, if they are unscrupulous, shove up the ground rent; or, if they are lazy, fail to appoint a decent managing agent to look after the dull but crucial necessities of service charges and communal facilities.

So, how many of you do you need to be able to club together to buy the freehold? If the purchase is “hostile” – that is, if the developer is not offering it up for sale, but you have requested to buy it (as is your right) – then a minimum of 50% of leaseholders must be involved. If, however, the developer is quite happy to sell, then all you need is one lessee. And if nobody wants it, then off to the open market it goes.

Background

• Tales of a landlady: Tax reforms

• Into the sunset

Background

• Tales of a landlady: Degrees of success

• Tales of a landlady: It pays to shop around

• Tales of a landlady: Residents only

• The ties that bind

• How low can you go?

Background

• Tales of a landlady: Avoiding the agents

• Tales of a landlady: In the dock

• Tales of a landlady: the age of reason

• Tales of a landlady: Heroes and villains

• Tales of a landlady: High maintenance

Background

• Back to the ’burbs

• A waste of energy?

• Tenants like gardens, but not tending them

• In the doghouse

• Parking mad

It’s eviction time

Can investors profit from the rise in repossessions?

• It’s eviction time

Background

• Do property workshops work?

• A letting gamble

• Spread betting

• When buy-to-let turns from a hobby into a living

Tales of a landlady: Persistent complaint

How can lettings agents justify annual renewal fees, asks Rosie Millard

Background

• Landlords: halo or horns?

• Bidding wars

• Time to quit the ring?

Is buying a freehold expensive? Well, if you have just bought a sumptuous buy-to-let property, paying out more money for the freehold probably seems like a right royal pain in the wallet, but I recall that ours cost about £2,000 for each freeholder.

Anyway, back to the AGM. One of the interesting things freeholders can do is decide how to spend the money from the ground rent, or from new freeholders joining up and putting in their share of cash. “I thought we might pop a fountain into the car park,” said Steve, my co-director, jovially. Everyone else looked at him rather wild-eyed. “Only joking,” he muttered.

In the end, we decided not to do anything with the money. Typically, however, freeholders can spend their money on things like pot plants for outside, or even a grand barbecue for all the residents of the block. Or they merely divvy it up between themselves.

“You must not spend the accumulated money on things that can ‘improve’ the building,” advises Nick Phillip, our efficient managing agent. “I think a video-entry system would be fine, but you would not be able to, say, turn the car park into a swimming pool.” Shame.

There is also a second pot of cash, the service charge, which is another thing altogether. In this case, the freeholders should think quite carefully, and seek advice from the managing agent. Do you want your service charge to cover just the bare minimum – that is, simply look after the communal areas on a weekly basis? Or should you charge 10% more so you have a reserve fund for emergencies?

“Some people put in a lot every year, so money is never collected on an ad-hoc basis for big projects,” Phillip tells me. “When the roof needs repairing, the front needs redecorating or the interior needs refurbishing, they already have their funds in place.

“That is quite extreme, although I think it is madness not to have a reserve. If there is no reserve, and a hole develops in the roof, how are you going to fix it?” Indeed.

Once we had discussed the freeholder’s pot and the lessee’s pot, it was on to the meat of the evening, namely gripes. Every managing agent I know agrees on this: freeholders love moaning at AGMs. About what?

“Car parking,” says one who works up in Barnsley. “Car parking and rubbish,” said another, from Plymouth. “Rubbish, rats and refurbishment,” a London agent told me. Noise, apparently, is another big issue.

Our AGM didn’t seem to go big on noise. It went quite big on why Tower Hamlets is so rubbish at, well, collecting rubbish, and whether we should put an extractor fan in the rubbish area – and could we have a light to frighten off the rodents that sometimes appear within said area?

Nevertheless, it was a rather jolly event. People got to know each other; two more directors were voted onto the board. Some boards have every single freeholder as a director – there is no upper limit, although you should have a minimum of two.

It made me feel more connected to the concerns of the block and thus better equipped to deal with my tenant’s concerns. I was therefore rather dismayed to learn that, come next month, management companies are not legally required to hold AGMs any more. I don’t know. They’ll be banning the office Christmas party next.

buytolet@sunday-times.co.uk

Times recommends

• Analysis: frustration for everyone - except investors
• Buy-to-let: professional investors cash in on the credit crunch
• Ten things you need to know about house prices