Unauthorised lease variation

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    Unauthorised lease variation

    Lease requires all leaseholders to pay lessor service charges for insurance so sneaky managing agent tried to get leaseholders to pay broker directly which is an unusual arrangement where its not landlord and tenant and insurance is not paid via service charges to lessor.Could this be classed as an unauthorised variation of the lease and or breach of landlord covenant?

    #2
    How is this supposed to be a variation of the lease?
    If it is something that is clearly contrary to the terms of the lease you can refuse to do what they are asking - which is something that you would be unable to do if your lease had been 'varied', or at least couldn't do without breaching the lease.

    You say that the lease requires leaseholders pay for insurance of the building as a service charge, and that seems to be precisely what you are being asked to do.
    Perhaps there is a breach of one of the landlord's covenants, but we would need to see the wording of the covenants to know whether or not that is the case.

    Comment


      #3
      Report the situation to FCA. Perhaps the managing agent is not qualified to enter into insurance policy and demand commission .

      Comment


        #4
        Originally posted by Gordon999 View Post
        Report the situation to FCA. Perhaps the managing agent is not qualified to enter into insurance policy and demand commission .
        There has been no suggest that the managing agent is receiving any sort of commission (although that would actually be legal in some circumstances), and nothing that has been said suggests that they would need to be registered with the FCA.

        The managing agents seem to have simply arranged insurance for the building, but have asked leaseholders to pay their share directly to the broker rather than having the broker paid via the managing agent. This is an unusual way of doing things, but probably doesn't break any rules.

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          #5
          It breaches the lease

          Comment


            #6
            Originally posted by Gordon999 View Post
            Report the situation to FCA. Perhaps the managing agent is not qualified to enter into insurance policy and demand commission .
            I have reported it to the FCA they have confirmed its unlawful to sell insurance products or claim any commission if you are not an FCA member or authorized. The managing agents has been dropped in it

            Comment


              #7
              Originally posted by Stacker View Post
              The managing agents has been dropped in it
              How?
              The managing agents are not selling insurance, the broker is, and you have said nothing at all to suggest that anyone is taking any sort of commission.

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                #8
                Originally posted by Stacker View Post

                It breaches the lease
                How does it. breach the lease?
                This is something that you still haven't explained (either here, or when you brought the subject up in an earlier thread).

                Comment


                  #9
                  As we are all aware the lease is a relationship between landlord and tenant. The lease is a contract with obligations and rights on both sides to observe and perform the covenants...so no managing agent or board can go against the lease even if agreed unanimously....to go against the lease is to induce breach of contract....to vary a lease without 100% agreement where its causes prejudice is unauthorized change of the lease and they did not apply to FTT or court to do so.

                  Comment


                    #10
                    There is a duty of care the insurance broker and managing agent owes this to its client so not undertaking due diligence and doing deals with unregulated managing agents is against the FCA and Company Act 2006..breach of contract negligence and breach of fiduciary duty the managing agent is also the dodgy company secretary.

                    Comment


                      #11
                      Unfortunately I still have no idea real understanding of what the problem is, or what it is that you feel that you need to achieve - because you're not explaining this.


                      Originally posted by Stacker View Post
                      As we are all aware the lease is a relationship between landlord and tenant. The lease is a contract with obligations and rights on both sides to observe and perform the covenants...so no managing agent or board can go against the lease even if agreed unanimously....to go against the lease is to induce breach of contract....to vary a lease without 100% agreement where its causes prejudice is unauthorized change of the lease and they did not apply to FTT or court to do so.
                      Let's be clear:
                      The lease has NOT been varied - so you can forget about that idea.

                      It's possible that the managing agents are not following the requirements of the lease (which isn't the same thing as the lease having been varied), but you have yet to post anything that would enable anything to answer that.
                      So, what is the obligation that you believe has been neglected? What covenant(s) or clause(s) in the lease do you think have been breached?

                      It's also possible that all of the landlords obligations have been met, and there has been no breach of the lease.



                      Originally posted by Stacker View Post
                      There is a duty of care the insurance broker and managing agent owes this to its client so not undertaking due diligence and doing deals with unregulated managing agents is against the FCA and Company Act 2006..breach of contract negligence and breach of fiduciary duty the managing agent is also the dodgy company secretary.
                      Any duty of care 'owed' by the insurance broker and managing agent would be to the freeholder, who would be their client.
                      There would be no requirement for the managing agents to be regulated by the FCA because they aren't selling insurance, they are buying insurance (and you have still said nothing that suggests that any sort of commission has been paid). You seem to have the wrong idea about the relationship between freeholders, leaseholders, managing agents, and the people who provide the services that leaseholders pay for.

                      Comment


                        #12
                        Macromia whilst I am sure you are trying to help you fully do not understand the situation so you cant really make such sweeping generalized statements.
                        I understand that the lease is a legal contract between the landlord and the leaseholders. Its pretty clear what the leaseholders should be doing. They are not doing it though..so I was thinking it through as I don't as your rightly say have a relationship with the other leaseholders so any deals they are doing I don't have to participate in I framed the title question unauthorized because they need 100% agreement to change the lease and any changes can not be prejudicial to others.

                        And you need to get better informed as I have spoken directly with the Financial Conduct Authority and have it in writing so I quote from them S.19 of Financial Services and Markets Act 2000 managers must not advise arrange or administer insurance or handle claims unlesst hey are authorised to do so by the FCA so the taking of an insurance commission for claims handling is not allowed Macormia its unlawful..is that clear? The three property redress schemes also say you need to belong to one otherwise you cant operate as a managing agent. Oh surprise surprise the managing agent is neither!!!

                        Comment


                          #13
                          This is interesting and relevant....The Green v 180 Archway Road case reached the conclusion that the insurance costs were not payable in that case not because there was a likelihood that the building wasn't properly insured (it probably was insured against all likely risks) but because the insurance hadn't been arranged in accordance with the contractual requirements in the lease. This would suggest that it is likely that you would have a good argument for using the case as precedence in your tribunal -

                          Comment


                            #14
                            Originally posted by Stacker View Post
                            ...whilst I am sure you are trying to help you fully do not understand the situation...
                            I'm trying to get you to provide sufficiently detailed information about the situation for somebody to be able to help you.



                            Originally posted by Stacker View Post
                            ...so you cant really make such sweeping generalized statements.
                            If you are referring to where I said that the lease has not been varied, I am referring specifically to your lease - and we can all be certain that this has not been varied because (a) you have not agreed to this, and (b) you haven't said that you have received notification that a tribunal hearing has been held in your absence.
                            So, what it seems that you mean has happened is that the freeholder (or managing agent) is trying to do something that you believe if different from what the lease allows (you have suggested that the lease doesn't allow them to ask leaseholders to pay their share of the properties insurance direct to the brokers).

                            Before you can given any worthwhile advice you need to provide the following:
                            1. An explanation of exactly what it is that the freeholder/managing agent has done that you think is in breach of the terms of your lease.
                            2. The precise wording of the lease clauses/covenants that you think have been breached - and also the precise wording of any other clauses/covenants that might be relevant.



                            Originally posted by Stacker View Post
                            And you need to get better informed as I have spoken directly with the Financial Conduct Authority and have it in writing so I quote from them S.19 of Financial Services and Markets Act 2000 managers must not advise arrange or administer insurance or handle claims unlesst hey are authorised to do so by the FCA so the taking of an insurance commission for claims handling is not allowed Macormia its unlawful..is that clear? The three property redress schemes also say you need to belong to one otherwise you cant operate as a managing agent. Oh surprise surprise the managing agent is neither!!!
                            Actually, managing agents only need to be authorised by the FCA if they are taking money for arranging insurance, including taking a commission - and their are some circumstances where they will have suitable authorisation as a result of having membership of a professional body (like RICS).
                            It may also be that the managing agents have simply 'introduced' the freeholder to the broker, leaving the freeholder and broker to agree the policy details. In this situation only the broker is required to have any sort of authorisation. You keep mentioning 'insurance commission', but you haven't said anything that would suggest that the managing agents have actually taken any sort of commission (in fact, if they are asking freeholders to pay the broker direct, this suggests that they aren't taking any commission).
                            Regardless, none of this is likely to be relevant to the issue that led to you starting this forum thread.


                            Originally posted by Stacker View Post
                            This is interesting and relevant....The Green v 180 Archway Road case ...[etc.] ...
                            You are quoting something that I posted on another 'Landlordzone' forum thread several months ago.
                            The Upper Tribunal case quoted (which I have cited in an FTT case of my own) was likely to be a useful precedent for one of the people who had posted details of an insurance dispute on that thread, but was unlikely to be a useful precedent for the insurance issue of the forum member who started that thread.
                            From the limited detail that you have posted so far, I doubt that it will be useful in your situation.

                            Comment


                              #15
                              Originally posted by Stacker View Post

                              I have reported it to the FCA they have confirmed its unlawful to sell insurance products or claim any commission if you are not an FCA member or authorized. The managing agents has been dropped in it
                              I think they have to be registered wiith FCA as " insurance intermediaries" in order to claim broker's commission. But there is nothing to stop you demanding the broker to reveal how much commission is paid to your managing agent or freeholder.

                              Comment

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