RTM AGM minutes accuracy

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    #16
    Originally posted by Gordon999 View Post
    The RTM Companies Regulations 2009 includes clause 5(s) for which the wording states:

    "to establish and maintain capital reserves, management funds and any form of sinking fund in order to pay, or contribute towards, all costs, fees, and other expenses incurred in the implementation of the company’s objects" ;
    This is enabling text. It doesn't give the company rights that don't exist in the lease. It would allow it to create a sinking fund outside of the lease, but wouldn't allow the company to force leaseholders to pay into it. The significance of the lease on service charges is that it says things that leaseholder can be legally forced to do.

    This wording would also apply to money used by the company for improvements, but most leases will not give the company the right to insist that people contribute towards the cost of improvements.

    Traditionally many companies memorandums of association would list large number of things that the company could do, just to ensure that memorandum didn't limit them in any way.

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      #17
      I would expect replacement of rotten wooden window frames etc. is required every 25 - 30 years, the RTM company needs to employ a sinking fund to collect the 3-4% contributions from all leaseholders in the block . Its better than asking for such payment in one billing which most leaseholders will find difficult to raise.

      Our lease says frequency of repainting external woodwork every 4-5years but the lease wording never mentions the wooden window lower frame and sill , if becoming rotten , needs replacing.

      Comment


        #18
        There needs to be a clear distinction between the members and the leaseholders even though they are likely to be the same individuals and you need to be careful to understand which hat a person is wearing when he speaks at a meeting. The contract with the leaseholders is the lease and that needs to be observed. Members may reach agreement outside the terms of the lease but as explained in #9 that can create other problems.

        A reserve fund created under the terms of the lease is required to be held on trust. A similar fund which is not permitted by the lease could be authorised by members but it is not required to be held on trust and contributions would be voluntary. Demands for voluntary contributions would need to be issued quite separately from the service charges.

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