Uninformed manager and directors: what can happen?

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    I understand your frustration and I recall that you went to great lengths to try to assist Sophiejo in a previous thread but ultimately we can only offer the benefit of our experience and it is then for a reader to decide whether or not to take any notice. There are other readers who may be in a similar position and who may benefit from the exchange of comments and we should not deter them from raising topics.



      I agree with Macromia to the extent that you appear to be making statements rather than seeking assistance and I note that you have not responded to my comment in #3 “I am unsure what you are hoping to achieve”.

      I have no doubt that you are aware that the management company is entitled to charge reasonable sums in accordance with the lease. If “y” is the amount which the management company requires as a budget, it must follow that to collect more than “y” is unreasonable and 20 x 17/320 results in it collecting 340/320 of the amount which it requires, therefore it follows that the demands are unreasonable.

      If the reserve fund is not permitted by the lease, you can either refuse or volunteer to pay your share. There are benefits of contributing towards a properly operated reserve fund but in the hands of “crooks, the uninformed, the intellectually limited, uncouth, creeps, fools, cretins,” I suspect that you may wish to decline making voluntary contributions.

      My apologies for my earlier post, I meant to state that your lease appears to have been drawn up on the old style which referred to an audit. Your lease appears to be ambiguous as it also refers to “certify” which is used to replace “audit” in the more modern leases. I still consider that the management company has acted reasonably if it has obtained an independent report of factual findings and that it has strong grounds for not incurring the cost of a full scale audit. Insisting on an audit under s476 may prove a point but it is unlikely to assist you further and your fellow leaseholders are unlikely to appreciate the additional cost.


        This is what you need to do if you want to have any possibility of changing the way your property is managed and correcting any problems with this (if indeed there genuinely are any actual problems and it's not all just misunderstandings):

        1. Stop posting insults and insinuations about the managing agent and directors. When you are discussing the 'issues' you have with the management of the property, both in a forum such as this one and when contacting them directly, accusing them of being 'crooks' will not help at all (and could be libel, as has been said).

        2. Stop claiming that the managing agent/directors don't understand "your company's system of governance" (or however it was you described it). It is possible, even quite likely, that they have made some mistakes - but I'm afraid that it is you who seems to have the least understanding of how your blocks service charge accounts should be managed.

        3. Drop all arguments about your company, and the money you pay for the upkeep of your block, being under the Company's Act rather than the Landlord and Tenant Acts - you are wrong.

        4. Cancel your request for a company audit (and don't even think about requesting any other audits etc.) - these will just cost you, and all other leaseholders, money and won't help to solve anything.
        The most likely outcome is that leaseholders who might otherwise eventually come on to your side (if there are problems) will end up joining the MA and directors in siding against you.

        5. Identify specifically what you think the problems with your service charge accounts, and the management of the block, are, and treat each of these as individual problems that can be addressed amicable.
        If you can somehow start afresh (which may mean apologising to the managing agent/directors - even if you don't really mean it), and can discuss issues civily - after you make sure that you properly understand how laws, etc., apply, you can (perhaps) start to make some progress.


          Originally posted by eagle2 View Post

          I understand your frustration and I recall that you went to great lengths to try to assist Sophiejo in a previous thread but ultimately we can only offer the benefit of our experience and it is then for a reader to decide whether or not to take any notice. There are other readers who may be in a similar position and who may benefit from the exchange of comments and we should not deter them from raising topics.
          You are correct - and I have no intention of detering anyone from posting.

          I found this forum many years ago and, although I have only starting posting relatively recently, have found reading other peoples posts to be of great benefit both to confirm that my opinions on legal/other leasehold matters are correct - and to point me in the right direction when my opinion has been slightly (or even very) wrong.

          While it is true that contributors can only give their opinion and cannot make anyone else agree, I would say that it can also be important for them to make it clear when they think that action that has been suggested (whether suggested by the person who starts a thread, or in a response to that thread) is not the best course of action.
          If no one says that a proposed course of action, or an understanding of something, is ill-advised/incorrect, then other readers might be more inclined to also take the same action, or go away with the same misinterpretation.

          When more than one contributor expresses the opinion that a particular course of action is ill-advised, and no one except the person who originally suggested it disputes this, readers are more likely to get the impression that it is not the best idea.
          When something really is a bad idea, I would hope that quite a few contributors would say as much in terms that were as clear as possible (thst would certainly make me think to reconsider my position, if it was my suggestion that everyone else was disagreeing with).

          I'm not trying to be nastg to sophiejo, I genuinely think she is doing the wrong thing, and will only make matters worse in the long run if she doesn't change how she is spproaching this situation.


            Do you know if the accountant used by the management company is a registered auditor? There is a difference between an accountant who only holds a practising certificate and one who is also a registered auditor. You may be able to insist on the company using a registered auditor.

            I did not follow your logic of the manager and the accountant somehow colluding to acquire the freehold. You state elsewhere that you own a share of the freehold so they could not acquire the freehold without your (and presumably the other leaseholders) consent. The accountant is required to be independent and he would not be permitted to own the freehold and to be the reporting accountant simultaneously.


              Originally posted by josepha333 View Post

              I was of the opinion that where the company acts as Principal and not as Agent then dormant accounts should not be filed. Links available if required?

              Counsel's opinion obtained by the ICAEW is that the service charge monies do not belong to the management company and the ICAEW has ruled that the service charge bank balance must not be included as an asset of the company. The consensus view of the accountancy profession is that you cannot include some items and exclude others so all service charge transactions are excluded from the statutory accounts, which very often leaves the company dormant.


                Originally posted by josepha333 View Post

                the advice given here is again from a Landlord's POV, not really surprising given consideration from whom it comes from.
                I think that there is a balanced view on here, certainly there are at least 2 of us trying to assist Sophiejo as a leaseholder and I can only think of one person who is stating a landlord's or manager's POV. For my part, I am trying to steer Sophiejo away from paths which are likely to end in a cul-de-sac.


                  Actually, my impression is that BtL landlords here tend to be against freehold landlords, e.g. over sub-letting restrictions and fees and alteration restrictions.

                  I'm a leaseholder, who has also seen the workings of freeholding RMCs. By all accounts, the one here is a lot more clued up than average.

                  L&T 1987 is mainly about tenants rights, so Sophie's position is actually on that would favour freeholding landlords. Having a full audit is going to cost the leaseholders in this case £150 a year, each, but is unlikely to give them any benefit.


                    Originally posted by josepha333 View Post
                    Sophiejo may not be fully aware of the position she finds herself in, however the advice given here is again from a Landlord's POV, not really surprising given consideration from whom it comes from. Presumably the nature of the income is Ground Rent from the OP, "share-of-freehold set-up", that would possibly remove the grey area of filing dormant accounts, that far too many continue to exploit.
                    Unfortunately, there is no doubt at all that Sophiejo is not fully aware of the position she finds her self in - although several contributors have tried to correct most of her many misunderstandings.

                    I srongly disagree with the assertion that the advice that has been given in this thread, including that in the portion quoted by josepha333, has been from a landlord's point of view. All advice that has been given is in the best interest of a leaseholder (although it is also worth remembering that Sophiejo is a shareholder of the company that owns the freehold - which is the landlord).

                    Nothing that has been said in either this thread, or Sophiejo's previous threads, has suggested that the company gets any income at all from any sources other than service charges that are collected, as least substantially, according to the terms of the leases.
                    There may, or may not, be ground rent and/or administration charges paid to the company in addition to the service charge contributions (with the later held in trust), but with the details we have at present I would stand by the suggestion that either a company account, or service charge account, audit would be of no benefit to any leaseholder.

                    Originally posted by josepha333 View Post
                    I see this as another case where whoever is running the show refers to either the lease or the articles for the company, but only the parts where they benefit and the leaseholders don't!
                    That would be standard in any dispute between a leaseholder and freeholder/managing agent.

                    In this case though, before any issues between the leaseholder and block management can be discussed in any meaningful way, Sophiejo has to understand how, and why, Landlord & Tenant Act, and other laws, apply to the situation.


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