S20 works and conflict of interest

  • Filter
  • Time
  • Show
Clear All
new posts

    S20 works and conflict of interest

    I have a flat in a large development. I have share of in the freehold company. They want to carry out decoration works. They issued S20 notice. The lowest quote was rejected (apparently they said they had issues with that company). However the second lowest quote was the director's husband. He happens to be a one man builder. Ordinarily, I would not have minded him winning the contract, except the building works are £100k+. The couple do good things together in terms of social stuff e.g. picnics, but have never been happy with the way they spend the money on the estate. The director is too strong, so the other directors just follow her. If there is a problem with the works, there is no come back. The cost is pretty steep. None of the companies who provided quotes appears to be trade bodies of painting firms.

    I am wondering, if they are breaking company law, by not declaring the conflict of interest?

    There is nothing in the S20 decision about a related party, being appointed. It is n't a secret, because they mentioned in the meeting, but most people don't turn up to these residents meeting.

    Whilst they should declare an interest and not vote, it seems to me that the interest was known and wouldn't have changed the result.

    The rules for who can enforce such breaches seem to be complex, but whilst the directors can always do so, there are many cases where individual members cannot.

    If you are convinced that the reasons given, in the stage 3 consultation, were bogus, you would be better off under L&T law than company law.


      A landlord should obtain at least one quote from a contractor who is “wholly unconnected” with the landlord.

      The landlord should declare any interest in the quotes obtained.

      The s20 LTA 1985 legislation is particularly weak. Even if a landlord does not comply with it, he can seek dispensation and a Tribunal can grant dispensation on such terms as it considers fit. The Tribunal will normally only grant compensation if it considers that there was financial prejudice to the leaseholders.


        If this was my block, I would want to know exactly what the "issues" with the cheapest contractor were - and when these issues were identified (If there were issues before quotes were obtained, I would want to know why that company was asked to quote).

        I would also want to know why the conflict of interest wasn't openly declared from the beginning. Even if the fact that the contractor is the husband of the director is widely known, it should still have been clearly declared.
        Additionally, the director involved should have abstained from voting and had no involvement at all with the choosing or appointment of the contractor.

        I'm not sure why you think there "is no come back" if there is a problem with the works.
        With any contract of this value, the directors should be ensuring that the contractor awarded the contract provides a suitable guarantee that any defective work will be corrected at the contractors cost. Something along these lines should be in the contract that is agreed.


          You should refer to the Company’s Articles of Association and s175 Companies Act 2006 regarding conflicts of interest.

          You may wish to ask the director for details of his public liability insurance. I agree with Macromia, if the director is carrying out works as a sole contractor, he would be personally responsible for any problems with those works.


          Latest Activity


          • Legal Action Against Landlord - Local Council
            by Isaac1400

            Hoping someone can advise. I am leaseholder and the landlord is a local council. my property is a flat and there are about 55 flats spread out over 3 floors.

            Now the problem is that over the years the council has failed to maintain the exterior and communal areas - including...
            02-12-2021, 07:13 AM
          • Reply to Legal Action Against Landlord - Local Council
            by Section20z
            It may benefit older leases by removing "marriage value" from lease extensions but this would not help you _ and freeholders are also aware of imminent changes and may be more willing to negotiate prior.
            Speak with a specialist like Homehold.org who will negotiate on your behalf,...
            05-12-2021, 07:14 AM
          • Reply to How much can the freeholder charge for registering details of a sublet?
            by eagle2
            If the lease states that you may charge a registration fee of £10, that is the amount you may charge, you are not entitled to increase the charge unless the lease specifically allows an increase. Even then you would be limited to a reasonable amount and £100 would be considered to be unreasonable....
            05-12-2021, 06:55 AM
          • How much can the freeholder charge for registering details of a sublet?
            by Joubert
            I am a director of a Freehold Company of a small block of 28 flats in a popular residential area.

            Over the past few years the majority of flats have been purchased by investors who sublet the flats on ASTs.

            Although the leases between the Freehold Company and the lessees are...
            04-12-2021, 17:35 PM
          • Reply to Legal Action Against Landlord - Local Council
            by andydd
            I sued my freeholder for failure to maintain my driveway, judge was quite damning but I was only awarded £100 as hard to proof any loss BUT in your case it sounds you have exceptional worry over various incidents so yes you could sue and as I found out it was useful, I got costs too and its something...
            04-12-2021, 21:19 PM
          • Reply to Dilapidated Flat
            by scot22
            Thanks all. It was a great price, significantly below market value, plus in further negotiations a reduction to pay for any further work. This was identified by a surveyor. She is not clueless.....
            Artful in my research I read that can only claim for her ownership period.
            It is all i...
            04-12-2021, 19:33 PM
          • Dilapidated Flat
            by scot22
            In a block of 24, unfortunately one flat has become dilapidated. The new owner has bought cheaply. She is now demanding the Freeholder pays to refurbish it claiming they have been negligent. Is there a reasonable case ?
            04-12-2021, 11:21 AM
          • Reply to Legal Action Against Landlord - Local Council
            by Isaac1400
            Thank you for bringing this to my attention. I have heard of this. In summary do you know if this would benefit those with older leases and not on the builds which have has issues with rising ground rent etc?...
            04-12-2021, 19:09 PM
          • Reply to Dilapidated Flat
            by Macromia
            If a leaseholder can show that internal maintenance is required because of a freeholder's negligence (e.g. a failure to meet external maintenance obligations according to the terms of the lease), they will potentially have a claim against the freeholder and be entitled to expect the freeholder (the...
            04-12-2021, 16:59 PM
          • Reply to Dilapidated Flat
            by theartfullodger
            The previous owner might have had a case. The new owner I think only for claims for problems during their ownership. But ianal.

            Presumably she got a great price as it was so dilapidated
            04-12-2021, 16:51 PM