RMC Directors behaving badly

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    RMC Directors behaving badly

    We are a RMC for approximately 400 mixed properties (flats and houses). At the end of 2018 management of the Company was passed from the builders to the leaseholders and 4 directors appointed. In February 2019 2 of the directors resigned--one citing an inability to work with the others, and one for personal reasons. Since then the remaining directors have given notice to the managing agent and appointed a new one without the benefit of an open, transparent, and competitive tendering process--this change of managing agent would take effect on 1 October 2019. In addition, no documents (minutes, notes of meetings, papers tabled, details of the new contract etc) have been submitted to the Company Secretary.

    We heard about all of this through social media and it was confirmed by the managing agent. The directors have refused to hold a meeting to discuss this saying it is "a done deal" and that any questions will be answered at the next AGM (probably early 2020). The current directors are vehemently opposed to the current managing agent (and leasehold in general) and seemingly want rid of them at any cost, most of us have no problem with them.

    We have searched the Mems&Arts and there is nothing there to stop them from acting in this way, however, we have raised sufficient signatures and are in the process of calling an EGM and a vote of no confidence in these 2 directors and their replacement.

    If we are not successful in replacing them is there any way we the members can invalidate this contract?


    #2
    In short no, directors are entitled to act on behalf of the RMC so you are taking the correct steps to call a meeting of members to consider removing the directors and/or appointing new directors.

    Comment


      #3
      The contract is valid as long as the other party reasonably believed the person who made it was acting on behalf of the company.

      Your theoretical redress would be for the company to sue the directors, but the only obvious defect is the failure to minute decisions, and whilst I believe that is a criminal offence, it would be difficult to prove that it resulted in financial loss.

      Please note that you only need 5% of the voting rights to force the holding of general meetings.

      Can you explain what you mean by being opposed to leasehold? If you mean they intend to ride roughshod over the lease, then your redress is as a leaseholder, not as a company member.

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        #4
        Your best course of action is the one you are taking because repeated visits to a Tribunal is not a satisfactory alternative.

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          #5
          Yes. I overlooked that you were removing the directors. Most people with similar problems are usually stuck with being unable, in practice, to remove the directors, e.g. because other leaseholders are apathetic.

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