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

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    #16
    thanks for your inputs
    I am currently looking into the next step to take

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      #17
      Originally posted by eagle2 View Post
      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.
      I take it, this also applies to RCMs? Why not make directors required to reside in the building? Would this not eliminate the possibility of managing agents becoming directors of the building?

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        #18
        I have not found any proposals directly relating to RMCs presumably because the members appoint the directors. The agents will be required to comply with a code of practice and that should exclude them from becoming directors of the client company.

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          #19
          Originally posted by TruthLedger View Post

          I take it, this also applies to RCMs? Why not make directors required to reside in the building? Would this not eliminate the possibility of managing agents becoming directors of the building?
          Unfortunately, that would often leave you with no-one capable of being a director, or with sub-tenants as directors.

          At least in outer London the remaining owner occupiers are mainly those too old and poor to move out. Based on my experience, one or two of those will have dementia and most will simply not have the skills to understand how to run a block.

          Although, for some purposes, sub-tenants are considered an acceptable alternative to leaseholders, in determining whether there is mutual control of the company, in general sub-tenants have no financial stake and there would be concern that they would be too willing to spend money.

          It actually looks to me as though there was a deliberate decision not to restrict the directors of RTMs, even though some RMC restrict them to be members of the company. Also, it seems that some RMCs allow leaseholders to nominate an external director per leaseholder. I presume the intent is that a more competent family member could be the director, as external professionals won't want to take on unpaid directorships, unless they have a conflict of interest.

          I would note that RMCs have no specific legislation, other than that which gives theme the SIC 98000 code for Companies House returns. As such, you would first have to define how to identify one, before imposing rules on them.

          RMCs are not special in terms of how directors are appointed, although some do restrict directors to be members of the company. Other directors can appoint directors, as well as the members. It would be unusual for any company to permit someone who was neither a director or member be involved in appointing directors.

          Although fully owner occupied blocks can be dysfunctional, I think ones with high levels of non-resident leaseholders tend to be worst, as they tend to be interested in their personal wealth and not the community.

          The typical reason that agents are able to hijack companies are that there are no owner occupiers both willing and able, and there are no absentee landlords willing, to become directors.

          The Law Commission report on RTMs actually points out new RTMs tend to have a lot of enthusiasm, but, in older ones, all those with enthusiasm have moved on.

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            #20
            Originally posted by leaseholder64 View Post

            Unfortunately, that would often leave you with no-one capable of being a director, or with sub-tenants as directors.

            At least in outer London the remaining owner occupiers are mainly those too old and poor to move out. Based on my experience, one or two of those will have dementia and most will simply not have the skills to understand how to run a block.

            Although, for some purposes, sub-tenants are considered an acceptable alternative to leaseholders, in determining whether there is mutual control of the company, in general sub-tenants have no financial stake and there would be concern that they would be too willing to spend money.

            It actually looks to me as though there was a deliberate decision not to restrict the directors of RTMs, even though some RMC restrict them to be members of the company. Also, it seems that some RMCs allow leaseholders to nominate an external director per leaseholder. I presume the intent is that a more competent family member could be the director, as external professionals won't want to take on unpaid directorships, unless they have a conflict of interest.

            I would note that RMCs have no specific legislation, other than that which gives theme the SIC 98000 code for Companies House returns. As such, you would first have to define how to identify one, before imposing rules on them.

            RMCs are not special in terms of how directors are appointed, although some do restrict directors to be members of the company. Other directors can appoint directors, as well as the members. It would be unusual for any company to permit someone who was neither a director or member be involved in appointing directors.

            Although fully owner occupied blocks can be dysfunctional, I think ones with high levels of non-resident leaseholders tend to be worst, as they tend to be interested in their personal wealth and not the community.

            The typical reason that agents are able to hijack companies are that there are no owner occupiers both willing and able, and there are no absentee landlords willing, to become directors.

            The Law Commission report on RTMs actually points out new RTMs tend to have a lot of enthusiasm, but, in older ones, all those with enthusiasm have moved on.
            Thanks for the detailed insight leaseholder64. Now it clicks why the agents asked me if I was planning to reside at the property. I thought it was an odd question at the time, but after this post it makes total sense.

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              #21
              I don't think that non resident leaseholders should be excluded from being directors, ideally you would have a balance of residents and non residents. Non residents are interested in protecting their investments. In my experience, non residents tend not to volunteer on the grounds that meetings would take place at the property and would involve time and expense but that does not apply these days when meetings can be arranged without having to step from your own home.

              I think that agents should have no say in the composition of the board of directors, all too often they interfere in order to retain their position. I have seen them deliberately not invite volunteers to become directors and then appoint one of their own employees as a director, choose the weakest person to act as a director, control the board of directors by ensuring that only persons who support the agent are appointed and others who may oppose their appointment are rejected.

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