RTM - problem leaseholder

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    RTM - problem leaseholder

    We are an RTM company, I am the secretary, having successfully ousted the very unpopular freeholder 7 years ago. Since the creation of the RTM, a number of the flats have been sold and now 5 of our 11 are owned by 3 brothers who are new to our building.

    Initially, they caused no issues, but recently things have deteriorated. They have been challenged on several breaches of the lease - stacking flammable goods in the common areas, letting out their properties as holiday lets (specifically denied by the lease) and most recently attaching keysafes to the exterior of the building. In addition to this, we have had a number of incidents where the council has refused to collect the bins because theirs are constantly mis-used, they have lied to try to make false insurance claims and a number of tradesmen refuse to come to us any more because of their behaviour.

    Recently there have been accusations of racism. Not true of course, but how do you respond to this? Other leaseholders have also had issues, e.g. with bins, but of course they're dealt with privately so these 3 only see that they are being "picked on" and "harassed", all because they are being asked not to break the rules.

    After weeks of ranting emails (they refuse to meet to discuss because they feel intimidated), which the directors have handled well I think, they have today requested the register of members so they can call an EGM with the specific aim of discussing "problem management".

    Of course we will provide it, they have asked properly and they are entitled, but has anyone any suggestions how we can resolve this? They are the ones in breach, directors and all other leaseholders have told them so, yer still they continue. Clearly they don't have a majority (yet, they hope to buy more flats should they become available) so they're not going to win any votes, but this is becoming a bit of a nightmare and it would be good to find a way to stop it. They say they want to run the block themselves so they won't need to be bothered by the "petty rules".

    Suggestions? Other than just selling up and letting them get on with it?

    I am far from an expert in this matter but a couple of options
    1) Could you use the Tribunal service to force them to toe the line; they might start to get jumpy if they realise there is a danger they could forfeit the lease (rare or so I understand but still a possibility). Isn't mediation part of the tribunal service , it certainly is in some county court claims.
    2) In the lease is their anything that requires permission to buy/sell a property?

    Just an aside and said from a white male - you say racism is 'Not true of course' but could it be that something could have been perceived that way. A bit like saying white lives matter , which of course is true but completely misses the point of the BLM campaign.


      Hi Warwick65, thanks for the reply. Using the Tribunal isn't a bad idea actually, thanks, I hadn't thought of that. At the moment we're waiting on a call back from our friendly local solicitor, it may be that an official looking letter will help. Unfortunately the freeholder is worse than useless, I'd quite enjoy the prospect of them forfeiting all their properties!

      No, the lease doesn't require permission, only notification.

      Accusations of racism are difficult, it seems that this is one where you're guilty until proven innocent. But no, there is no reasonable way that any behaviour of the directors could be perceived that way, not unless you were looking for a get out. The first time we had to raise something with them, the bins in the "section" that one of their flats was in were being misused (smelly food rubbish in the paper recycling, that sort of thing). All three leaseholders were sent an email asking them to talk to their tenants (one email to all of them, not different). The other two flats had no problems, these rang up and starting shouting about racism. They have not been treated any differently to any other leaseholder, and there has certainly been no name calling or similar. They have a number of times said "you said xyz....", but these haven't actually been true, but how do you prove it without recording phone calls? The directors have recently started corresponding with them only by email rather than telephone so as to have written proof of what has and hasn't been said. Nobody dislikes them because of their colour (other people of colour in the flats have no issue), they are disliked because they try to scam the system and do not believe that they should follow the rules laid out in the lease which are there for the good of all. We didn't invent the rules, they're in the lease, which they signed. The latest thing is that because the RTM Company didn't point out particular clauses in their leases and tell them during the sale that they needed to follow them, then we have no right now to ask them to do so. Hmmmm, isn't that what their solicitor is for?

      Luckily the directors have more patience than I, I just wish there were some way we could shut them down, rather than having to keep responding to shouty emails every few days.



        As a director of an RTM Company myself, the story you paint above is an all too familiar one.

        Unfortunately you have to have 'thick skin' to carry out the role of director/company seretary of an RTM Company. Ignore any counter allegations that problem leaseholders try and come up with to avoid their responsbilities.

        Ultimately the issues these problem leaseholders are causing (you talk of stacking flammable materials in common areas) are legally yours to resolve. They potentally affect the whole development in terms of other leaseholders being able to obtain mortgages or insurance. If there was a fire - the first people questionned would be the management company responsible persons - 'why didn't you enforce the lease?'.

        Let them call an EGM - when you point out the above I can't see any responsible leaseholder 'siding with them'.

        If informal letters/emails aren't responded to - instruct a leasehold solicitor. Hand the case to them and sit back, have the lease breaches confirmed by the FTT. PM me if you need any recommendations. Costs will be recoverable from the leaseholder in most cases once confirmed.

        Ive dealt with a lot of problem leaseholders over the years, the vast majorty have ended up having their flats reposessed in the end, their personal issues send to stack highly and one problem household should not affect other people in the development. The 'petty rules' they speak of shows they seem to have no concept of lease regulations and their importance. Short term letting will push up your insurance premiums, it's a question that should come up when your RTM company applies for block insurance, if you say that you are aware of short term letting your insurance could be refused or at the very least increase significantly.


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