Resident management company director responsibilities

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    #16
    By guarantee. I think it was the standard way of doing not for profits at the time.

    It is common for being a member of a limited by guarantee company is necessary to obtain benefits, e.g. national societies.

    The general case where membership is optional is charities. A charity that does public lectures, for example, cannot stop members of the public from attending, although some will suggest a voluntary donation.

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      #17
      To answer the questions in post #13 as best I can
      The RMC is not the landlord, the RMC directorship was handed over by the original developer directors to 4 leaseholders who wanted to be company directors along with a representative from the MA. (these 5 parties are listed on CH)
      The ground rent is paid to a new landlord/freeholder (are these not the same person) who the original developer sold to almost a year ago. By owner-occupier I mean that yes, all are leaseholders as opposed to any rented out properties.
      Yes, the solicitor was recommended by the developer, there was a choice of two from what I recall, it is a discount market scheme property so the choice of solicitors and mortgage providers was very limited.
      At the moment both the RMC directors and the Managing Agent are not communicating anything to the leaseholders (I can't even get confirmation of if we are members, I was only told as it was limited by guarantee and therefore I am not a shareholder and the articles won't give me any information on the directors role - this came from the directors and my request for further detail on the articles and directors scope has been unanswered), the information on role of the directors was only shared with those people who wanted to be directors, the managing agent has not fulfilled many of it's obligations and the directors are busy 'negotiating' a reduction in service charge, we get sporadic messages promising an update 'soon' but that's where it ends.
      Many of the neighbours are first-time buyers and I don't think are aware they must have more rights to know what it is going on. I spoke to the leaseholders advice centre but they could only advise me on the lease and not on any company issues - given I seem to the be the only resident prepared to ask questions, I don't want to take on the expense of a solicitor myself and don't really know where to get information.
      I do recall at time of sale there was a condition to become an RMC member or something like that but I cannot find specific paperwork reflecting that.

      Comment


        #18
        Hi,

        Sorry but I'm more confused, but it may just be me. Before moving on, to be blunt you really do need to establish if you are a member of the company. Nobody can help you if you cannot help yourself on such basics.

        Some folk confuse the term 'RMC' with a managing agent (based on old threads here) but you seem clear there is a separate managing agent as you refer to a "representative from the MA".

        The RMC has to be either the freeholder and/or the landlord. It can't be neither.

        Quote: "The RMC is not the landlord".

        Quote: "The ground rent is paid to a new landlord/freeholder (are these not the same person) who the original developer sold to almost a year ago."

        Well yes they can be the same person. The question is, who are they in your case? The RMC? If not, and you say the RMC is not the landlord, something doesn't add up.

        Did you confirm from the Land Registry the identity of the freeholder and do you mean to say the RMC is not the freeholder?

        If yes, why do you also say the RMC is not the landlord?

        Let's for the sake of argument assume that the RMC is the landlord under the lease (but doesn't own the freehold) and the directors have a contract with the MA to act in its name.

        This makes no odds to the law.

        You still need to know if you are a member of the RMC.

        An RMC means a Resident Management Company. The clue is in the title.
        The residents who are members manage the company. They decide who gets to remain as directors using the Companies Act 2006 which overrides the articles on this point (removing directors).

        The residents who are members have the right to see the articles and these must be registered at Companies House or some statement that Model Articles are in force. The RMC cannot hide its operative articles from its own members. No argument.

        The articles will give details of the decision making actions of directors, and company meetings etc, but the CA 2006 provides the legal obligations for directors and how the company must conduct its business, including calling/running meetings and providing voting rights etc.

        Quote "Many of the neighbours are first-time buyers and I don't think are aware they must have more rights to know what it is going on."

        Sadly common enough. Which is why you are running around in circles because one leaseholder can do little as one member of the company. Unlikely that one leaseholder could get the manager replaced at tribunal?

        If you could be clear precisely on the set up and your place in it, the next steps might be easier to work through, but in the end the options will be:-

        1. A leaseholder or a group of same pop to tribunal and try to change the manager (even an RMC) by demonstrating fault. Bit weird to be fair if you do have a leaseholder run company because Appoint a Manager does not result in a manager under the control of the leaseholders but answerable to the court. Pretty much a backward step in my opinion given the shocking standards of the industry.

        2. A group f leaseholders create an RTM company to push the RMC and existing agent either wholly or partially aside depending on what part of the premises can claim this.

        3. A group of company members call a company meeting and remove the directors (ignore the agent in this for now - sack that director too).

        4. The new volunteer directors sack the agent company and get a new one.

        In the end it will need you to protect your legal rights. You can google almost everything you need to know for free. You can find out what you need to know by digging and demanding based on your confirmed status.

        If it turns out you aren't a company member and cannot become one (something I would not believe of an RMC but this is leasehold) then your 'rights' are paper thin in reality. Whatever anyone tells you. In leasehold your own neighbours once in charge and left to act unfettered can be worse than an external rogue agent.
        Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

        Comment


          #19
          Thank you for the challenges. On digging further through the paperwork I can see that one of the conditions of purchase was that all leaseholders would become members of the RMC on sale completion. So that confirms that I am a member. Companies House does show that Model Articles were adopted although I think model articles still leaves some ambiguity eg on the quorum for meetings and termination of directors so thank you for confirming that CA takes precedence on some of the legal matters.
          The lease identifies three parties, the landlord/freeholder, the tenant/leaseholder and the RMC so landlord and/or freeholder and RMC are definitely not one and the same. The RMC is listed as being responsible for undertaking the services repair maintenance insurance and management of the estate. The freehold was sold so ground rent is now paid to someone else, I don't know if just the freehold then is another party or who the landlord is now as that was initially the same party i.e. the original developer. The original developer still has activity such as confirming annually that the leaseholder is not subletting and will take a percentage of the sale price on resale, I am not clear what their legal title is now since the freehold sale.

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            #20
            Using the model articles is not a good idea, as they impose no restrictions on who can be a member, as long as the board accept the membership. As well as the ability of the board to get yes men as members, for some tax purposes it can be useful if members are limited to leaseholders and residents.

            Comment


              #21
              Originally posted by leaseholder64 View Post
              (The articles say that membership ceases as soon as the board are aware that the member is no longer a leaseholder.)
              Hello, this raises the question what do you in the Companies House website with respect to shares when a Flat is sold and the incoming leaseholder does not complete the Deed of Covenant and pay any fee to process that and get their share certificate? I thought it best not to remove the outgoing leaseholder from the list of shareholders in Companies House. You cannot allocate the shares to no one, so its either leave them in the name of the outgoing leaseholder or put them in the name of the incoming leaseholder, and once you change that allocation to the new leaseholder you loose what little leverage you might have had.

              Thank you

              Comment


                #22
                If the Articles state that the leaseholder ceases to be a member when he sells the flat, you should remove the name from the register as soon as possible. The new member is subject to confirmation until you receive the necessary documentation and you should chase the leaseholder for that information.

                Comment


                  #23
                  Thank you eagle2, its pity we cant delay transferring the shares in companies house to increase the pressure. What I have done so far is withhold the share certificate and remind them.

                  Comment


                    #24
                    There is nothing to stop you from entering in the register something like "member of flat X is pending further information" and in addition to withholding the share certificate and sending reminders, you are entitled to say that the new leaseholder will not be granted the rights of a member, eg the right to vote, until the information is supplied and the fee is paid.

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