transitioning from FTT appointed manager back to RTM

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  • transitioning from FTT appointed manager back to RTM

    Hello,

    Would be extremely grateful for help with this from someone with experience and knowledge of RTM companies:

    I am a leaseholder in a large (30) block of flats. Up until 4 years ago the building was under RTM management (for about 10 years), but for the last 4 we have have been under a first tier tribunal appointed manager. To cut a long story short: the building is heritage, has needed a lot of expensive repairs, Section 20s, all extremely costly for leaseholders, high service charge, values of flats plummeted. Lots of hostilities between RTM and leaseholders about how things were being run, mistrust, breakdown of communication.
    The past RTM operated like a closed clique with not much change of members; little power-sharing and was not open to having new people come on board as directors. Also the chair of the board sought to have a lot of power, and does not even reside in this country. (?!). From what I know of RTMs and the ethos behind them - these two things - being exclusive and having a non-residential nor local chair seems to go against the very principle behind the RTM?

    This all created a lot of hostility so the board applied to the FTT and sought money from certain (not all - only the ones who felt supported them) leaseholders to do so.

    Since the FTT manager has taken over there has been a hiatus in the hostilities and we have moved forward with a lot of the repairs. However, now the manager's time is up and they want to hand back to RTM next year. We are fearful that the current manager (the FTT appointed one) is in the pockets of the previous board (who he seems to have been consorting with) and is going to do the easy thing and enable them to slot back into power - without addressing the historical problems. My view and that of many others is that there needs to be a change of directorship if the building is to move forward out of the ghastly situation of before.We are being called to a meeting about this soon. Can anyone comment on this situation and tell me anything about:

    - what the status of the previous RTM would now be (following the FTT period); is it dormant or dissolved?
    - how would the RTM be reformed and how do we appoint new directors?
    - is there anything we can do to ensure that the new board is not composed by a majority of the old members?
    - what should we ask/demand the outgoing manager do to ensure the RTM starts afresh? (he has actually said to me on the phone that he thinks there should be new people on the board) and does he have power over this process?
    - if we are unhappy with the ensuing situation can we go back to the FTT and complain?

    Many thanks
    Poppy H

  • eagle2
    replied
    It is a concern that the manager has not addressed “historical problems” despite managing for a period of 4 years and the obvious question is why not? It is in the directors interests to appoint a managing agent in whom they have confidence and who will deal with problems which would otherwise be referred to them. Appointing the current manager may be seen as the easy option but it is not necessarily the best option. The decision is being made now and it makes sense to consider all the options at this stage rather than to defer the decision for another 12 months.

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  • Stacker
    replied
    Originally posted by poppyfield View Post
    Thank you both for your timely replies, this is really helpful Yes the company is listed as dormant so I suppose that means everything is still as it was. Yes the agent is arranging the meeting. It's good to know that the manager has ultimate say over the formation of the board, and cannot be overridden by the RTM.
    An FTT manager appointed by the FTT will have been put in place to oversee and abide by the requirement of the Lease, that is their legal remit. They are not there and the FTT will not have appointed them to get involved with the Company law side of things. The company is dormant because leasehold companies are normally non trading entities.

    Hold some meetings with all the shareholders, get a feel for what they want? Ask them if any will stand as directors? As directors they will have responsibilities including as previous comments the requirement to undertstand Company law, The Lease, RICS service charge guide,Insurance and maintenance obligations and UK law. If some are up for this then would suggest 3 directors act and the rest vote against the directors who are not pulling their weight at a called AGM meeting. Or if simply want to remove existing directors and you have enough people to create the shift in voting power then do this via a meeting following all correct processes because if you don't they can outveto decisions.

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  • leaseholder64
    replied
    Originally posted by Sarah B View Post
    RTM does not prevent you engaging a managing agent as well (in fact it is encouraged I believe). If you are happy with the FTT appointed one, why not keep them on?
    That was my thought too. You will not have the hassle of a handover, and you will be dealing with a somewhat known quantity. You can evaluate whether you have a good working relationship, when they can no longer dictate what is done, and generally get a feel for what it is like to use a managing agent, making it much easier for you to select a good agent for the following year.

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  • eagle2
    replied
    Have you held your meeting yet? Please return and let us know what you decided.

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  • eagle2
    replied
    The appointment of a good managing agent is very important and will ease the workload of the directors as suggested above. Ideally the directors would carry out due diligence and consider 2 or 3 different managing agents and seek references from directors at other blocks before appointing an agent.

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  • Sarah B
    replied
    RTM does not prevent you engaging a managing agent as well (in fact it is encouraged I believe). If you are happy with the FTT appointed one, why not keep them on?

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  • eagle2
    replied
    One further thought, you may wish to contact other members ahead of the meeting to see if they would be willing to become directors. That way you can decide in advance whether to support them or put your own name forward, Good luck anyway.

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  • eagle2
    replied
    I am aware of Companies where directors communicate entirely by email and telephone. That is usually due to the distance between them or it is just convenient to hold meetings in that way but it demonstrates that it can be done and becoming a director does not need to become onerous. Directors at other Companies make a meeting a social event, by arranging coffee and biscuits or wine and cheese.

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  • eagle2
    replied
    If you have a good managing agent, who is transparent about the charges and deals properly with complaints and comments, he should shelter the directors from problems with the leaseholders. As a director your standard response to a leaseholder would be to discuss any problem with the agent.

    There should be little need for the directors to have much involvement. For the size of your property a couple of meetings a year should suffice and those meetings could be dealt with by an exchange of emails if all the directors agree.

    See how you get on at the meeting anyway. The usual problem is that there is a lack of volunteers which made someone else’s comments on here inappropriate.

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  • poppyfield
    replied
    Thanks, I am thinking about it, but from everything I've read it seems to be a big commitment and lot of responsibility and work and I'm a working mother of a young child so I"m not in the ideal position. I would perhaps rather endorse people that I know would be good on the board and who also do have the time. Have to say though situation here has been so bad that I am a bit put off as to how difficult the politics of RTMs can become and would not want to be on the other end of angry leaseholders and have all that trouble directed my way. (honestly I can see that happening here - it's a funny place this building, with difficult personalities and quirks and some unhealthy alliances etc I wouldn't describe it as a very freindly place

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  • eagle2
    replied
    I hope that you volunteer to become a director and you can learn as you progress like most of us have done over the years and continue to do. It is only when you think that you know everything that you need to stop and take another look.

    Please feel free to come back here if you need any assistance or an alternative opinion.

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  • poppyfield
    replied
    Thanks eagle2.The current manager advised me similarly - that being a director is doable even for a lay person such as myself, providing one has the right support and advice.

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  • eagle2
    replied
    Originally posted by leaseholder64 View Post
    I would caution you though, that your new directors need to include people who don't need to be be told how to find out if the company still exists and who the directors are They also need to include people who are familiar with the details of the lease and RICS Service Charge Residential Management Code.
    That comment is completely out of order. There is no point scaring people from acting as directors and allowing an unsatisfactory position to continue. The leaseholders should take back control of the RTM.

    Leaseholders are usually laypersons who cannot be expected to understand all possible relevant sections of Company Law, Landlord & Tenant legislation and the RICS management code of practice. There are useful booklets available free of charge and leaseholders are entitled to receive support from a managing agent.

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  • poppyfield
    replied
    Thank you both for your timely replies, this is really helpful Yes the company is listed as dormant so I suppose that means everything is still as it was. Yes the agent is arranging the meeting. It's good to know that the manager has ultimate say over the formation of the board, and cannot be overridden by the RTM.

    Leave a comment:

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