I own the whole building freehold but a management company exists, Who has control?

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    I own the whole building freehold but a management company exists, Who has control?

    I own the whole buildings freehold and one of the 4 flats.
    There is a management company which the 4 leaseholders are members but the building is not being managed properly.
    Items such as repairs and communal areas are in poor condition and the other leaseholders are not very cooperative.
    As the freeholder what rights do I have to enforce repairs and cleaning and recover the costs from the other leaseholders?

    It is not the usual situation where all leaseholders might own an equal share of the freehold.

    #2
    Hi megaspooner1

    You will need to provide further information.Is the management company a RTM company?
    How long have you owned the freehold?
    Do you let your flat or live there?
    Is the building purpose built?

    Comment


      #3
      Provide a little more background too for context.

      Comment


        #4
        Hi It is a RTM company.
        I have owned the freehold and flat since 2007
        I do not live there and the building is not purpose built it is a 1870 conversion
        I collect ground rents and arrange insurance but repairs and cleaning are not being agreed by the other leaseholders and the building is deteriorating

        Comment


          #5
          What does the lease say? Who is responsible for arranging works?

          Comment


            #6
            My lease says that the Lessor
            clause 4.3
            "To repair and keep in repair (at the expense in the proportion aforesaid) all the retained parts PROVIDED that when any works or repairs are necessary which exceed in cost the sum of Fifty Pounds two estimates shall first be obtained and submitted for the approval of the lessees of all the flats in the property and also for the approval as to the date of commencement of the work(which approvals shall not be unreasonably withheld) IN the event of the said Lessees not being unanimous in giving their approvals within four weeks of having been supplied with a copy of each of the said estimates the decision of the Lessor shall be final and binding on all the Lessees PROVIDING that in the case of an emergency the Lessor shall be entitled to proceed immediately with such work and expenditure and bind the Lessees accordingly"
            the proportion payments are one quarter per flat.
            So does this overide the RTM companies rights to?

            Comment


              #7
              This has come up in another recent thread. I think it was concluded that it is very difficult for a freeholder to deal with with an incompetent RTM other than by having a tribunal appoint a manager, which will temporarily remove control from both RTM and freeholder, and will be expensive for the leaseholders. In that case, there was a question that RTM might have been invalidly approved in the first place, because of a commercial element in the development, but that doesn't even apply here.

              The problem is that an RTM generally comes into existence because leaaseholders don't like how the freeholder is managing and it has statutory rights which override those of the freeholder.

              As freeholder, you do have a right to be a member of the RTM, but you only get one vote in general meetings, so you will need to find enough of the leaseholders who are not apathetic, or like the low service charges they are probably getting, to make a quorate majority in a general meeting, which would be needed to remove the current directors. Also note that a meeting to that must state the purpose, so a director who wants to say may try to drum up proxies and attendance from the normally apathetic.

              Have a look for the above mentioned thread

              This is the opposite side to the issues with leasehold where freeholders are abusing it as a cash cow. Enfranchisement often leads to mismanagement.

              Comment


                #8
                The clause you quote doesn't override the RTM's rights; rather it imposes obligations on the RTM, as they take on the maintenance duties that previously fell on the freeholder.

                Comment


                  #9
                  Thanks for your input I will read that with interest.
                  My first job is to instruct a cleaner for the communal areas at a sum of £25/month shared and as that is below the £50 limit in the lease before estimates need to be obtained .
                  Can this be enforced on the leaseholders with no waiting 4 weeks for their approvals?

                  The lease states that if not unanimously agreed then the Lessor`s decision is final and binding for works costing more than £50.so I assume works under £50 can just be carried out and leaseholders billed.
                  I just want to make the building a better place for all !

                  Comment


                    #10
                    Only the RTM can appoint the cleaner. (Well you could appoint the cleaner, but you would have to pay out of your own funds.)

                    In the clause you quote, you need to replace Lessor by RTM to incorporate the effects of creating the RTM.

                    It's unfortunate that there is no provision for inflation in the lease, but I would consider that, morally at least, this is one annual contract for £600, rather than twelve contracts for £25. The RTM might get away with this subterfuge, but I don't think that is the intent of the lease.

                    Comment


                      #11
                      It would probably be advisable for you to obtain a copy of the tribunal ruling appointing the RTM. It really should have been given to you.

                      However, I think it will completely remove maintenance responsibility from you.

                      Comment


                        #12
                        You stated you arrange insurance. Usually, the RTM is responsible for insurance as all day-to-day management responsibilities pass to the RTM. Do the others pay their respective share of insurance?

                        What are lease terms re insurance?

                        You may like to read the other thread referred to post #7 as there may be useful information and signposting; see:
                        https://forums.landlordzone.co.uk/fo...failing-rtm-co

                        Comment


                          #13
                          Hi megaspooner, i am the freeholder from the other thread and I think you need to look to replace the directors of the RTM with people with more of a responsible attitude to maintenance. Check the articles of association of the RTM (from companies house) for details of how directors should be appointed...

                          Comment


                            #14
                            Originally posted by Section20z View Post
                            Hi megaspooner, i am the freeholder from the other thread and I think you need to look to replace the directors of the RTM with people with more of a responsible attitude to maintenance. Check the articles of association of the RTM (from companies house) for details of how directors should be appointed...
                            All RTMs have to have essentially the same articles: http://www.legislation.gov.uk/uksi/2...ulation/2/made The actual articles are in the schedule. Even companies formed before this SI must now use the articles it contains.

                            Comment


                              #15
                              The Law Commission is considering whether it should be mandatory for RTMs to appoint a professional managing agent and whether RTM directors should be required to meet training requirements.

                              Comment

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