Can lease be changed just because the directors want to change it?

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    Can lease be changed just because the directors want to change it?

    I am not sure where to post this so sorry if its in the wrong place firstly?
    The recent shareholder meeting went well until new shareholder pipes up oh we don't want to pay to a service charge fund or get any painting done. It's in the lease so could the two directors go along with this and not get the painting done? They shouted me down because I said we need to follow the lease?

    #2
    I am assuming that you have a management company which is controlled by the leaseholders.

    Do you mean a “service charge fund” or a reserve fund? Service charges would be payable anyway for other expenditure.

    You are strictly correct that you (or the freeholder or any other leaseholder) could require the management company to comply with the lease and carry out the painting when it states within the lease.

    Not contributing towards a fund for the painting and not arranging any painting at any time makes no sense, there is an overriding duty to maintain the property.

    I have known leaseholders to agree to delay the painting eg if it states that painting should be arranged every 5 years, they may agree that it is arranged in the 6th year instead.

    To answer your question in the title, the lease cannot be changed without the agreement of all the parties.

    Comment


      #3
      They can't change the lease, but they can choose to breach the lease. In theory, you could take legal action to get an injunction for specific performance of the lease.

      It is difficult with self managing RMCs in that, if you sue the company, the money ends up being paid by the shareholders, one way or another. That is not, in my view, an excuse for ignoring contractual obligations.

      I suspect those not wanting to pay into the reserve fund will be the first to cry poverty when an immediate demand has to be made to cover emergency work. The payment to the reserve fund should, of course, be calculated properly, to reflect realistic future expenditure.

      If left to ignore the lease, you will find that actual practice diverges more and more from the lease, even though each new buyer will be buying on the basis of what it says in the lease, not actual practice.

      They cannot choose to breach statutory law.

      Comment


        #4
        I think that some element of common sense should apply. Whilst there is an obligation to maintain the exterior, if it does not need to be repainted, the parties involved should be allowed to reach agreement that it can be deferred. It does not apply in this case because the parties are not agreed.

        The comment regarding a purchaser is inappropriate, he should not purchase solely on the content of the lease, he can see with his own eyes whether or not the building needs to be repainted and he should be making enquiries when it was last repainted.

        Comment


          #5
          What the buyer is less likely to notice is that they are going to get stung for a large service charge in a few years, because nothing is going into the reserve fund.

          Comment


            #6
            eagle2,

            Thank you for your response. The lease sttaes we need to pay in to a sinking fund. The outside fron of building has cracks running up walls so this needs to be looked at and they only want to paint the windows. Defer rest of painting and not pay in to sinking fund. The new sharehoder has been appointed as a Director and is clueless unfortunately. We have just manged to get the management back so managing ourselves.

            Comment


              #7
              Are these cracks in the brickwork, or just in render? Cracks in the brickwork should be treated as an emergency, and unless covered by insurance, are exactly why one would have a reserve fund. Even with insurance, you may end up with up front surveyors' bills. Also, even with insurance, you must take action as soon as possible.

              Comment


                #8
                leaseholder64,

                We were originally run by a management company, but after two disasters we are now managing ourselves however its all about people and relationships again where one wants something and the other doesnt and we have a new shareholder/director who does not have a clue and is part of a team 50:50 shaeholding. Can we remove them if they are clueless?

                Comment


                  #9
                  leaseholder64,

                  Thanks for your response. The front of the building is painted in impervious paint, the cracks run up the walls in two long runs, they ae not surface cracks,I am not a building expert but look like possibly repointing? No idea until a surveyor take a look?

                  Comment


                    #10
                    I agree in principle with using a reserve fund or sinking fund. Unfortunately, they seldom seem to be operated properly.

                    Comment


                      #11
                      Originally posted by Stacker View Post
                      ... and we have a new shareholder/director who does not have a clue and is part of a team 50:50 shaeholding. Can we remove them if they are clueless?
                      Your opening post suggests that there are two directors. The post I have quoted from above implies that one of these is a new (and clueless) shareholder.
                      How did this new shareholder end up becoming a director if he/she is clueless?

                      The articles of your RTM/RMC should tell you how you can remove directors, but it will likely be possible by calling a meeting and winning a shareholder's vote of no confidence.
                      You should have alternative candidates ready to replace any directors who are removed before doing so, at least so that the minimum required number is kept in place.

                      Directors are likely to be able to make some decisions/take some actions by agreement between them, but for other decisions should be supporting by properly organised shareholder votes (again, check the companies articles of association).

                      Comment


                        #12
                        Originally posted by Stacker View Post

                        The front of the building is painted in impervious paint, the cracks run up the walls in two long runs, they ae not surface cracks,I am not a building expert but look like possibly repointing? No idea until a surveyor take a look?
                        Is this being dealt with as an urgent matter?

                        I don't think I'd worry too make about painting being carried out when stated in the lease, if there were cracks in the walls like you describe.
                        Clearly this needs investigating before you worry about details such as decoration. If it turns out to only be cosmetic damage, it can be put right later once redecorating is organised - and if not, redecoration can make use of the scaffolding that is likely to be needed for the corrective work required for the walls.

                        Comment


                          #13
                          Thank you Macomania, there are four shareholders, and yes as you point out two directors. I cant remove any of them as I am the minority. I have aske to be appointed or at least considered as a director and its one excuse after another, NOT to appoint me so its now a tactical game. So if I sold my flat the next owner would be a director however they continually block me and I have had enough of being financially exploited.

                          Comment


                            #14
                            Originally posted by Stacker View Post
                            I have aske to be appointed or at least considered as a director and its one excuse after another, NOT to appoint me so its now a tactical game.
                            Unless you want to move, or cannot see anyway that you can get the other residents/owners to come round to your way of thinking (at least in part), it's a tactical game that you can likely win.
                            You may have to pick your battles, conceeding some (even if reluctantly), but if the new director really is clueless they will trip themselves up.

                            The problem you have is that, as a shareholder in the freehold company, any tribunal/legal action would be at a cost to you - even if you win.


                            Originally posted by Stacker View Post
                            So if I sold my flat the next owner would be a director however they continually block me and I have had enough of being financially exploited.
                            Why do you think that you are being financially exploited?
                            Are they trying to charge you more than your share of costs? Or are they charging for things that shouldn't be put through the service charge accounts?

                            Comment


                              #15
                              Gosh Macromania thank you I feel finally someone can relate to the way I am thinking and feeling....basically I came into this situation blind..ignorant basically so its been a steep learning curve where lame old duck here listened, went along and paid, then lame old duck started googling and landlordzoning to check things out, lame old duck started asking questions, learning and challenging. Glad I did becasue I was being charged for stuff not in the lease. So here we are with a new shareholder -couple 50:50 shareholders who are lovely but cluless telling me what to do and pay for when I have been for the last two years educating myself on lease, company law and uk law etc....its now done my head in and I am so depressed that I want to move as it does not matter hwo much i try to be helpful, cooperative and reasonable, and insist lease complied with. They threaten me with legal action if I dont pay so its become Pavlov trained dog as I fear losing my home. I basically live in fear.

                              Comment

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