Share Block Schemes

Question 1

Properties of Share Block

Answer 1

• Under the share block scheme, a person acquires a share in a company entitling him to use and occupy a specific apartment (flat or office) in a building owned or leased by the company
• The company operating the share block scheme is called a share block company
• A shareholder does not become the owner of the apartment which he is entitled to occupy; he merely has a right to use and occupy it
• His rights are regulated by the constitutionof the share
  block company and by a use agreement

memorandum and articles of association

Question 2

Share block Tranfers

Answer 2

• Must follow the memorandums and articles relating to the company
• This requires the consent of the share block company.
• The purchaser not only acquires the shares in the share block company but also takes over the seller’s rights and duties in the use agreement

Share Blocks Control Act; Companies Act 2008

Question 3

Share Block Funds

Answer 3

• Every shreblock company must have a levy fund which every shareholder/member contributes to
• The amount of the contribution is fixed in relation to the number of shares held by the shareholder
• The funds from the levy must be put towards teh upkeep, control and management of a property
• All collected funds should be entrusted to an EA or Attorney, or held in a seperate bank account/building society

Question 4

Share Block Pre-emptive Rights

Answer 4

1. A portion of the building is wholly or partially let for residential purpose
   and
2. The share concerned is to be offered for sale, or is in fact sold, for the first time. This means that if a tenant vacates the premises after having declined to exercise his pre-emptive right and a new tenant takes his place, the share may be sold on the open market without having to first offer it to the new tenant.

Question 5

Selling Share Blocks to the Public

Answer 5

• Any proposed purchaser must enter into a contract
• Acopy of the relevant contract must be available for inspection free of charge at an address indicated in the statement.
• If a share block is offered to a specific individual only then the 2nd requirement need not be complied with