Ousting failing RTM co

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    Ousting failing RTM co

    As a Freeholder of a property (converted listed building 4 flats 1 shop) that I purchased with an RTM Co in place , I am having serious issues with the single director of the RTM which is failing to maintain the property or comply with H&S legislation, he has also refused to allow me to be a member of the company. The other Lessees don't help much as they are all absent landlords happy to pay no service charge while the building disintegrates.
    Advice from the official government supported website (lease-advice) is that a Landlord can apply to FTT to oust a failing RTM using the "appoint a manager" process, but the FTT are telling me only a lessee can apply.
    Anyone had any experience in similar situation or suggestions ??

    #2
    Dear Section 20z

    When the RTM was acquired the RTM company should have invited the landlord to become a member. I suggest, if possible, you make enquiries with the former freeholder and find out if this was done. If not, and you can prove it, the RTM might be invalid (you would need legal advice).

    I am not sure if a landlord can apply to be a member of the RTM further along the line but it would be worth checking.

    The problem is if you were a member you will be out voted as you will only have one vote. Though I am not clear how many members of the RTM there are as you refer to one director; and lessees that are not motivated.

    Even if you could apply to appoint a manager I would not recommend this. The route does not give you any control either. Control passes to the FTT appointed manager and costs can significantly increase though usually for leaseholders.

    The RTM does have a duty to inform you in relation to certain matters for example consents. The leases still need to be complied with too.
    You still retain responsibility for landlord’s covenants outside of day-to-day management. You also retain the right to forfeiture and only you can take action.

    So find out exactly what information a freeholder is entitled to and write to the RTM accordingly. If there are issues with individual flats in relation to breaches of lease, this might provide a route to you applying pressure.

    Incidentally non-residential parts of the building are not included in RTM.

    Overall, I would suggest you speak with a solicitor because this is a complex area now that there is an RTM in place. Some solicitors are willing to provide some information before you instruct them and start incurring fees.

    (Ground rent is still yours to demand and collect)

    Comment


      #3
      Thanks #vsmart , I think the RTM could be invalid for a number of reasons, I have requested certain information from the RTM and been ignored so might have to go to my Solicitor.
      (I think there should be 6 members including me but they won't provide that info either !)
      Thanks for input - all useful.

      Comment


        #4
        I don't think http://www.legislation.gov.uk/uksi/2...agraph/26/made allows a valid application to be refused.

        Also the quorum for directors' meetings has to be at least two.

        However, in this case, as the RTM is currently the responsible person for H&S, it might be worth considering trying to get enforcement action taken against the company for the breaches. Unfortunately, government austerity may mean that this is more difficult than it ought to be.

        Although the freeholder could become a director, even without being a member, RTMs are normally set up because of dislike of freeholder, so they are unlikely to give a freeholder more than the minimum power.

        You could also try to convince the other lessees that there is a point where being a slum affects the value of their property (although my experience is that is way beyond the point where owner occupiers would be seriously concerned.

        Comment


          #5
          Even if you are not a member, they must provide you with the list of members. If you are a member, you can inspect it free of charge. If not there is a small charge they can make for inspection. You need to make the request in the right way. They can only refuse by obtaining a court order, which they wouldn't get and the penny pinching lessees wouldn't want to pay for. There is a charge for everyone if you want them to supply copies, but it is not very large, in the scheme of things.

          If you can document an invalid refusal, it would be worth contacting the breaches team at Companies House, to see if they can remind the director of the law.

          Comment


            #6
            As it’s a mixed use building, I take it the commercial element is less that 25 % of floor area?

            Comment


              #7
              Thanks, I will contact companies house breaches and see if they will put any pressure on.
              The shop lessee and one other are also concerned about the condition and long term impact so might be persuaded to join me in becoming directors.
              The commercial part is way more than 25%.

              Comment


                #8
                if the commercial area takes up more than 25% total Floor area...

                below taken from this website
                https://www.bradysolicitors.com/brad...ght-to-manage/



                This is a key criteria for RTM and one that isn’t always easy to assess. If the commercial / residential split isn’t clear, you may need to get expert opinion on the internal floor area.

                When calculating the commercial percentage, an assessor will include any dividing walls to the commercial unit and also any commercial car parking spaces. Balconies however will not be included.

                Whilst the burden of proof rests with the landlord, if he can provide evidence that there is at least 26% commercial tenancy, the RTM will not be possible.

                Comment


                  #9
                  Indeed, but there already is an RTM so back to the original question. How do I oust them ?

                  Originally posted by desamax View Post
                  if the commercial area takes up more than 25% total Floor area...

                  below taken from this website
                  https://www.bradysolicitors.com/brad...ght-to-manage/



                  This is a key criteria for RTM and one that isn’t always easy to assess. If the commercial / residential split isn’t clear, you may need to get expert opinion on the internal floor area.

                  When calculating the commercial percentage, an assessor will include any dividing walls to the commercial unit and also any commercial car parking spaces. Balconies however will not be included.

                  Whilst the burden of proof rests with the landlord, if he can provide evidence that there is at least 26% commercial tenancy, the RTM will not be possible.

                  Comment


                    #10
                    Surely the argument should be they had no rights to form one?
                    if my memory serves me they could only have formed an RTA.

                    Comment


                      #11
                      Correct, they had no right to take over the management but sadly that knowledge gets us no nearer to resolving the situation 😐

                      Comment


                        #12
                        Have you taken any advice on all of the above ?

                        Comment


                          #13
                          If these are flats over commercial premises, the fire brigade may actually be interested in pro-active auditing of fire safety, as such arrangements are considered high risk. Maybe get legal advice, but it does seem to me that the RTM is the one that would get the enforcement notices.

                          Comment


                            #14
                            Not a bad shout ! I've tried the LA who aren't interested despite letting licences being required in the area .
                            My slight reluctance is it's not 100% certain that H&S obligations fall to RTM and it might come back to bite me !! Fire brigade will have no hesitation in closing down the property and I might end up paying hotel bills for the lot of 'em 😕
                            Originally posted by leaseholder64 View Post
                            If these are flats over commercial premises, the fire brigade may actually be interested in pro-active auditing of fire safety, as such arrangements are considered high risk. Maybe get legal advice, but it does seem to me that the RTM is the one that would get the enforcement notices.

                            Comment


                              #15
                              Originally posted by vmart View Post
                              Even if you could apply to appoint a manager I would not recommend this. The route does not give you any control either.
                              The reason to have a Manger appointed, is because
                              "the RTM is failing to maintain the property", that is why the RTM has to be removed / changed, etc.


                              Comment

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