Section 20 and Right To Manage

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    Section 20 and Right To Manage

    Morning kiddos

    I was after some general advice on the chronology of Section 20 and Right to Manage applications, and which takes precedence when.

    Some background: our managing agents have been threatening major works for the last two or three years. Their previous go at major works was pretty poor, so in late 2017 we elected to go for RTM. This appeared to light a bit of a fire under the managing agents collective bums (we have a significant amount in reserve) and they subsequently initiated major works with a section 20 in June 2018. After some fairly significant battles, including a trip to the Upper Tribunal, we've finally got our RTM, with handover due later this year.

    However I've recently received communication from the managing agents stating the following:

    1. that they'd like to proceed with major works, including those to our block
    2. that they recognise we can reject this offer but in both scenarios we'd be liable for any costs they've already invested in preparing for those major works
    3. that their major works plan will make it 'difficult' to handover the correct reserve amount in good time, and that an FTT determination may be required for this
    4. that this FTT determination will take some time and in the meantime major works should proceed

    Not to be too cynical but I think effectively they want to clear out the reserve before handover. My questions are as follows::

    1. were these major works 'reasonably' initiated? it doesn't feel like they were, since they did not send section 20 until way after RTM was initiated
    2. therefore, ARE we liable for costs incurred in preparing for major works following RTM application?
    3. is there a standard basis for determining reserve fund handover where RTM applies to only 50% of the development? My assumption is that we should get 50% of the reserve but this may be too simplistic
    4. can MA legitimately use FTT to delay matters and do we have any pushback?

    Thanks all.

    #2
    Your RTM should be demanding a handover date for the service charge by serving 1- 3 months notice ( or whatever is suitable ).

    Don't let the existing agent try to stay on.

    The existing buildings insurance should be terminated on the handover date. A new insurance policy by the RTM should be arranged to start on the handover date.

    A service charge levy after the handover date will be demanded by the RTM company or its appointed new managing agent .

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      #3
      Originally posted by Gordon999 View Post
      Your RTM should be demanding a handover date for the service charge by serving 1- 3 months notice ( or whatever is suitable ).

      Don't let the existing agent try to stay on.

      The existing buildings insurance should be terminated on the handover date. A new insurance policy by the RTM should be arranged to start on the handover date.

      A service charge levy after the handover date will be demanded by the RTM company or its appointed new managing agent .
      Thanks Gordon. We are demanding a handover date and I think the latest they can do it will be May this year - we're not yet able to confirm as they're ignoring our chosen MA. We have no plans to keep the existing MA on.

      However we are interested in what they're allowed to do with regards Major Works. I understand that their responsibility is to maintain the block until RTM completes, that much is clear. But when they (via the associated FH) has spent the last year deliberately slowing down RTM, does that still count?

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