RTM to Management Company

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    RTM to Management Company

    I purchased a property in January 2018, that was supposedly managed by a RTM company. However, there have been no fees collected and the building insurance has now expired.

    There are 5 flats in the property and only 2 of us are currently looking to address the issue.

    My theory is that whilst a management company is more expensive, a higher costs split between 5 is better than a lower costs split between 2.

    The freeholder also seems to have gone AWOL and doesn’t collect ground rent, this being the case how would we go about appointing a property management company? Is it possible with consent from only 2 out of 5 and no input from the freeholder?


    Thanks in advance

    #2
    I would contact the directors of the RTM Company and seek a meeting of members as soon as possible.

    Comment


      #3
      An RTM is a a management company!. I think you mean a managing agent, who would be engaged by the RTM. They work for the RTM; they do not replace it.

      I'm finding it difficult to work out exactly what the constitution of the RTM is, but I would suggest you go to beta.companieshouse.gov.uk and find out who the directors are, then ask them who the members are. If you are not, yourself, a member, there is a formal procedure for this, and you may have to pay a small charge, if they choose to stand on their rights, but they are legally obliged to either supply you with that information or obtain a court order to deny the request. The latter simply is not going to happen.

      If you are a member, you then need to arrange with the other members to hold a general meeting to remove any dead wood directors and appoint competent directors. The company must call a meeting if requested by 5% of the members, so any one member would be able request a meeting, in your case. If the company fails to call a meeting, you can then call it yourself.

      If you are not a member, you need to convince one of the people who is to do this. Sometimes people do not join in as members of an RTM when it is formed, which is why you might not be a member.

      Comment


        #4
        Finding your freeholder is a separate matter. If the freeholder is a limited company, you should carry out a search at Companies House. If he is an individual, you can use a tracing agent to find him.

        Comment


          #5
          Thanks for your replies.
          Sorry if my terminology is confusing or incorrect.
          When I say and RTM, I mean a collective of the flat owners, when I say management company I mean management agent.

          I have since made further contact and 4 of the 6 owners (sorry the 5 above was a typo) are willing to make a monthly contribution the other 2 are just saying NO.

          My theory is a management agent would have more clout in receiving payment from all 6 owners, and to be honest if they don't it is up to them to take the non payers to court? Is this correct? if not, is there anything we can do about the non paying parties,

          Thanks

          Comment


            #6
            The directors should be making decisions on behalf of the RTM, so it is important to find out who are those directors. You should have a meeting of all 6 members and decide on the way forward. You may need to appoint new directors for a start. You should also try to understand why 2 members are objecting to pay, it is better to try to persuade them that it is in their interests to contribute in order to have insurance cover etc. Even though they are a minority, they may have valid objections which should be considered. It is up to the directors or a majority of the members to decide whether or not to appoint a managing agent. An agent is no more than that, an agent for the RTM, so if it is necessary to take legal action, it would be in the name of the RTM. Legal action should be very much a last resort, it seldom helps to resolve differences and it can widen the gap between the members. The costs of legal action should not be underestimated, there is only one winner from legal action and it is not the RTM or the leaseholder.

            Comment


              #7
              Thanks for your advice.

              The problem is one person owns 2 of the flats which he inherited. I have not personally met him but other owners have described him as uneducated and arrogant. Basically he just said he wants no part in any monthly contributions and doesn't care if the building is not insured or cleaned. The fact that he is getting a free ride is making otherothers dig their heels in and say, "if he isn't paying why should I".

              Comment


                #8
                The property needs to be run properly and in accordance with the lease, it is important to issue demands on the dates stated in the lease. If the lease states that charges are due quarterly or half yearly that is when the demands should be issued. You can agree to demands being settled by monthly instalments if you wish. If the person still does not pay, it is probably easiest to apply to a Tribunal to confirm that his charges are payable. Once you have a Tribunal decision in your favour, you can apply for forfeiture of his lease, assuming that the lease allows you to do so. Faced with losing his inheritance, he should decide that payment is the better option.

                Comment


                  #9
                  This is starting to sound more positive.

                  Of course nothing is simple, I have since found out that the non payer inherited the 2 flats of his brother who was the freeholder. I don't know what happened to the freehold, I really hope he didn't inherit that too, even if he didn't it will probably be owned by a family member, which wont make things any easier.

                  Comment


                    #10
                    Originally posted by jimcarver View Post
                    I have since found out that the non payer inherited the 2 flats of his brother who was the freeholder. I don't know what happened to the freehold, I really hope he didn't inherit that too, even if he didn't it will probably be owned by a family member, which wont make things any easier.
                    It doesn't sound like you have all the relevant information that you need.

                    You need to know more about the RTM company (who the members and directors are, what the Articles say, etc. and who the freeholder is - Land Registry should be able to provide the last bit of information).

                    If you think that there may be problems getting the leaseholder who inherited the two flats to pay his share due to him, or a family member, owning the freehold, you may need to look into either purchasing the freehold (under certain circumstances this can be forced without the current freeholders consent), or applying to a tribunal to appoint a manager (although I'm not sure how much that would help, and any costs involved, including costs of taking the nonpaying leaseholder to court, may have to be shared by all leaseholders).

                    Comment

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