RTM Director accuses another Director of fraud/stealing

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    RTM Director accuses another Director of fraud/stealing

    I am a RTM Director with two other Directors. We have appointed a external management company to help us run the management of our properties. Three property owners have substansial historical arrears ( one of which is a current Director of the RTM company).

    Our managing agent has asked us if "historical arrears" should be included in this year's maintenance statements. Two of us agreed, however the Director with arrears refused and then in an emotional outburst (via email) accused the longest serving Director of "using the company funds as his own personal slush fund" along with a number of other accusations.

    Can anyone tell me what needs to happen next?

    All accounts were handed over to the new management company and everything is in order. I have no reason or evidence to question our historical/current accounts.

    This is a very serious allegation. I have asked the management company to contact me to discuss where we go next, but they haven't called me back.

    What are my duties as a Director in this situation?

    All advice and guidance very welcome. Thank you.

    You have a duty to investigate the comments, so you should contact the director and ask him to produce evidence to support his comments. If he cannot produce evidence, you shoud ask him to retract the comments.
    You should also remind him that he has rights as a leaseholder to challenge the charges but it would be preferable if you could find a solution yourselves rather than incur substantial costs.
    Well done for taking your duties seriously.


      If the RTM has appointed a " professional managing agent" to operate the service charge account, the managing agent has to follow the standard under the RICS Residential Management Code .

      The managing agent has to chase the leaseholders for service charge payment , and if necessary recover any arrears of payment through the small claims court . If any leaseholder is not satisfied to pay the service charge due, he/she should make application to the FTT for judgement on the reasonableness of the service charge payment..


        Thank you for your replies. I really appreciate your guidance. I have a way forward now. Cheers. KAH.



          We appointed a "professional managing agent" and fully expected the new managing agent to chase the leaseholders and recover the arrears owing and also the balancing charge from the previous year, unfortunately it didn't happen because as he was a new managing agent he wanted to afford the leaseholders more time or as one of the apathetic directors suggested he wanted to get his own feet under the table first.


            If a MA was appointed to run the service charge account and collect service charge contributions , the directors can instruct the MA to use the small claims court to recover arrears in service charge payments.



              Thank you for the reply.

              However, very difficult to do when the MA refuses to correspond with you or return calls when messages have been left concerning the arrears.

              Even worse when acting as a "professional managing agent" terminates the agreement due to differences in management styles.

              And then the apathetic directors all state, accompanied by two of their wifes, that there are no arrears and that those that haven't paid have until the end of the year to pay.


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