Compensation from Residential Management Company/Freeholder

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    Compensation from Residential Management Company/Freeholder


    It's about a block of about 74 residential flats.
    About 24 of 74 are with a housing association, rented to council tenants.
    We do not have a residents association.
    There are families with infants, young children, pregnant ladies, old people and disabled people living in the block.

    We had an outage of about 7 days without electricity and water in all the flats.
    The Management Company (let's call them MC) and the Freeholder (let's call them FH) did offer some alternate accommodation to some residents, for about 2-3 days/nights.
    There was no food, no per diem cost provided.

    Many residents booked hotel rooms on their own, with their own money. Almost all had to depend on take away food, restaurants etc for their meals.
    A lot of food had to be thrown away from the fridge/freezer for all the residents.

    There is no word from the MC/FH about the compensation/reimbursement.
    The block is less than 10 year old, so is covered under 10 year premier guarantee.

    How do we go about the compensation of the loss, and reimbursement of the costs incurred?
    Any guidance/pointers would definitely help. Many thanks in advance for your inputs.

    Any more information or clarification needed, please ask.

    Kind Regards,

    But who funds the Management company? Surely it's you isn't it, so you will be compensating yourselves.


      You should ask the MC what action it is taking and enquire if there is any insurance cover. What was the cause of the outage?


        Your local MP should help you to claim against the electricity company or MC ?.


          Originally posted by JK0 View Post
          But who funds the Management company? Surely it's you isn't it, so you will be compensating yourselves.
          Very Helpful have a look at yourself FFS!


            Thanks for the responses.

            Some vital information -
            1. The outage was a result of mismanagement of the block, and we are working on documentary evidence for it. We have photographic evidence at the moment.
            2. The outage was sudden and unannounced.

            The cause of outage :
            There was water leak from some pipes in the communal area, reaching into the electric switch boards, causing it to short and got damaged. The switch board had to be replaced.

            True, we do fund the management company. But, given points 1 & 2 above, aren't there legal ways to claim for compensation?
            Does someone know of similar cases?
            Does someone know of a solicitor who deals with such cases?


              You can get compensation, but the result may be that the company either folds, resulting in your flat only being sellable to cash buyers, or that they have fund the compensation from voluntary contributions.

              Generally, where there is as separate management company and freeholder, the management company is owned by the leaseholders.


                Actually, the title says this is an RMC, so is owned by the leaseholders, so it is the leaseholders who will be asked to bail the company out to compensate themselves!

                (I suppose you might be able to replace the directors and then have the company sue the directors, but that is hardly likely to encourage people to be directors, and finding directors is one of the biggest problems for such companies.

                (The company can only really sue its directors if they were acting beyond their powers, though.)


                  Do have a careful look at any insurance policies which may exist, escape of water may be covered by the buildings insurance. Who Is responsible for insuring contents? Is there a directors and officers insurance policy?

                  Have a look at the 10 year guarantee but do not place much dependence upon it especially if you are claiming mismanagement.

                  The financial position of the management company does need to be considered, it would be a pyrrhic victory if you succeeded but the management company did not have the financial means to pay you.

                  A solicitor is unlikely to act on a “no win no fee basis”, so you would need to fund the costs, which only adds to your loss if you cannot recover those costs. You are unlikely to recover all your costs even if you are successful.


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