Ousting failing RTM co

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    Originally posted by ram View Post

    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.

    Getting a manager appointed wouldn't give the freeholder control (unless they can persuade the tribunal to appoint them as the manager, without being too detailed about the way the building has to be managed), but it should mean that any maintenance work that is required gets done, and the leaseholders might then be made to understand that future costs would be lower if there was regular, ongoing maintenance instead of leaving the building to become run down again.


      I don't particularly want "control" , I have no issues with RTMs in principle as often they will do a better job of maintenance than the Freeholder.
      Just not in this case - so if I could apply to appoint a manager I would take that route, sadly I can't.


        Brief update, as companies house breaches department have written to the RTM about their refusal to provide me with the Register of Members and the director has responded saying I am being vindictive and he will only let me have it if I pay £400.00.
        Just waiting to see if CH put more pressure on him now.
        They have finally issued section 20 for some damp works but I assume it is invalid as a single director is prohibited from authorising any action other than an egm ?


          The fee for inspecting is £3.50 an hour. The absolute maximum fee for a copy is £125, but there would have to be 100,000+ members to attract that fee. For most flat management companies it would be £35. The reasonable costs of delivery can be added, but they are not going to be more than £5, in my view.

          The £3.50 fee only applies to non-members.


          If they consider it vindictive, they only way they can stop you having the information is by obtaining a court order. No normal flat management company is going to succeed in obtaining such an order; they are intended for cases like vivisection companies where there were hate campaigns against members.

          There is basically a strong presumption that this information should be available to the public.


            I do not recommend that you become a director of the RTM Company otherwise you become responsible for its failings. You can take legal action against it but you need to consider the costs involved and whether or not you would recover them.


              Following on I have taken legal action to recover surveyors costs with hearing in February but the RTM only has one director whereas 2 are required by the mem & arts, and presumably the C&L Reform Act.
              Does anyone know if that sole Director is allowed to act for the Company while inquorate ?


                See http://www.legislation.gov.uk/uksi/2...agraph/16/made

                The only thing an inquorate RTM board can do is to call a general meeting, to appoint an additional director, Basically they should be seeking to increase the number of directors.

                It appears to be quite common for RTMs and RMCs to run with one director, but that director is at risk, as they can be personally responsible for any bad decisions they make.

                Contracts can still be binding as there is no duty on the other party to establish whether a person they reasonably believe is acting for the company is actually acting within their powers.

                I doubt that Companies House like RTMs and RMCs, as they are low value companies, which wouldn't otherwise be worth pursuing, but are probably the most likely to act illegally. I'd still suggest you report any continued failure to allow access to the register of members; they just might consider a prosecution to deter others. (NB Companies House have no power with respect to the inquorate board; that is a civil matter.


                  Originally posted by Section20z View Post
                  Indeed, but there already is an RTM so back to the original question. How do I oust them ?
                  As a hard working leaseholder director of an RTM company I have divided loyalties reading this.

                  You say you took over a freehold with an existing RTM? Were the lessees given right of first refusal? If not they would seem to have skin in your status as much as you have skin in theirs?

                  Access to members' register

                  S117 of the CA 2006 requires that the company must within 5 days comply with a request or apply to a court for a direction that the request in not for a 'proper purpose'. The C of A threw out a request by a shareholder to get access on the basis of improper purpose: the shareholder wanted to communicate with other shareholders his concerns about the directors and the court felt a 'vendetta' was involved. The CoA affirmed that where one purpose was proper but another improper, the request can be denied.

                  So, given your stated purpose is to oust this company from their statutory functions , it is not that surprising to me that the director might feel 'vindictiveness' might be afoot. Unfortunately, the company had five days to comply or seek a court direction, so the purpose of the request seems mute.

                  On the other hand, the founding members will be in the Mems and Arts filed at CH under "Incorporation"

                  Membership by a landlord under the lease.

                  Article 26(2)(b) refers to "from the date upon which the company acquires the right to manage..." that the landlord under the lease can apply to be a member. It doesn't say "on the date..." It seems to me the landlord can become a member at any time after acquisition? There is no right to be a director of course. The landlord gets one vote as a member. The voting rights can get complicated but have the effect of balancing voting rights equally among all members.

                  Guarantor membership does not transfer automatically on sale, so the landlord like new lessees would need to submit the application proforma in Article 26. My assumption would be that sending it signed and by recorded delivery to the company's registered office would make you a member at a reasonable date thereafter as there are no hurdles other than signing the guarantor slip?

                  One director or minimum of two?

                  The RTM articles do require that a sole director cannot form a quorum at a directors' meeting and must either appoint another director or call a general meeting to so do. However, what if the sole director does not call a directors' meeting with himself?

                  Article 12(2)(a) provides for an RTMC to have only one director and if so this renders the general rule about decision making inapplicable and "the director" may take decisions "without regard" to any of said rules.

                  It's a conundrum to me but this is what the articles say. The sole director is free to appoint a director who is not a leaseholder, including it seems a spouse.

                  RTM seems to have been designed by a committee after a few post prandial brandies?

                  Sect 105 of the CLRA 2002 provides the only ways to cease the RTM function once acquired unless someone can show the RTMC had not acquired the right in the first place.
                  Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.


                    In may view, one of the primary purposes of allowing members access to the register of members is to allow them to organise to challenge the running of the company.

                    In any case, the cost of getting a court ruling is normally going to prohibitive for RMCs and RTMs; the normal presumption with them is openness anyway, e.g. RTM members have the right to see raw accounting records, not just the annual summary.


                      Thanks, useful link.
                      After pressure from companies house they finally sent me an email with the four lessee names and said it was "the register" - not good enough but not worth arguing further....

                      Originally posted by leaseholder64 View Post

                      The Lessees were served section 5b notices and didn't reserve their rights - not sure why you would think otherwise.


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