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    directors

    if directors have been chosen by the only director still in office , can they vote on matters ,even if they have not yet been appointed via AGM ?

    #2
    It depends on the Articles of Association but it is not unusual for directors to be allowed to appoint other directors in which case they would be allowed to act and vote. The Articles may require those appointed in that manner to resign and seek re-election at the next general meeting of members.

    Comment


      #3
      Thank you Eagle2 . Yes I have just found this in our articles ...phew just wanted to check all had been done properly .

      Comment


        #4
        Yes, but the appointment must be ratified by the shareholders as soon as possible ( shareholders vote in, and out, the directors.
        Don't wait till the next A.G.M.

        Comment


          #5
          Unless the Articles specify otherwise, there is no requirement for a director to seek election or re-election at a meeting of members. Indeed many smaller and recently formed Companies no longer need to hold an AGM. The members still have the right to remove a director in which case they would need to request a meeting or those holding 5% of the voting rights may call an EGM.

          Comment


            #6
            Originally posted by ram View Post
            Yes, but the appointment must be ratified by the shareholders as soon as possible ( shareholders vote in, and out, the directors.
            Don't wait till the next A.G.M.
            So this would be via a postal vote ? I just thought it was done at next AGM , thanks

            Comment


              #7
              Originally posted by thenunn View Post

              So this would be via a postal vote ? I just thought it was done at next AGM , thanks
              Up to you.
              But yes, new directors can vote on matters ,even if they have not yet been appointed via AGM

              Me, i would want to know who the director was, what qualifications he had, why was he chosen, and why the shareholders were not told beforehand that he / she was going to be offered a directorship, and have the ability to accept or reject the proposed director.

              In REAL companies ( most leasehold companies are just leaseholders acting as a director but running it as a leaseholder for their own gains )
              i say again , In REAL large companies, shareholders only know whats going on via the annual general meeting once a year, and other than the AGM have no idea of the directors meeting proposals. Hence real companies only tell the shareholders once a year what they have done as directors, and if they appointed, as a matter of urgency, an other or replacement director, for which they MUST have shareholder approval to do.
              With or without an A.G.M.

              It would be good to know how many flats there are, and if every flat owner ( just one per flat ) has a share in the company.
              And why there was a second directore appointed. Did one leave, die, was terminated for illegal activities ?

              It should be normal in a small block of flats for the director / directos who wish to add a director of their choise ( but not the shareholders having a choice beforehand ) to engage the shareholders, and say - we, the director / s would like to engage mr. / Mrs X, what are your thoughts, and possibly have a meeting t discus the merrits of that person.
              thats what SOULD be done, and has even been sanctioned by judges.

              Note Directors can make decisions - which could be detrmental to the safety of the leaseholders / building without consulting the leaseholders ( who are usualy sharehoders ) Do you want to be in that situation until the next AGM, which could be in another 10 months time ?



              Comment


                #8
                Hi Ram , the other director sold and moved away. We have to have a minimum of 2 directors , the 2 new ones applied at the same time ,so both were accepted as we were looking at major works and the budget to be approved. Both are known here. In our lease, shareholders vote on directors at agm, which we are having in September . Here they can vote them out or in . We did send a letter which introduced them and their merits.

                Comment


                  #9
                  Originally posted by thenunn View Post
                  Hi Ram , the other director sold and moved away. We have to have a minimum of 2 directors , the 2 new ones applied at the same time ,so both were accepted
                  Directors.
                  So, just a general question then, and not asking because you have new directors who are unsuitable.

                  Service charges.
                  Off topic, but I read a repy to gave ( you did not start the thread ) stating you had a reserve fund and an extra £ 3000 per flat was needed. AND you help those you can with payment plans

                  You could be in trouble on both those 2 items

                  Maintenance HAS to be done in a reasonable time, at whatever cost it comes out at.

                  Reserve fund has to be for specific items, and from quotes obtained if possible, and cost of living adjusted per year if it's for 5 yeas hence. So every year you increase the estimated cost by the index. - even asking for a requote every year or so, which is a simple matter for builders.
                  If you end up with leasholders having to pay £ 3000 on top of the reserve fund, then that is what they have to pay.

                  If you allow people time to pay, then that delays the work as you cannot start until you have the right amount of money in the bank to start the job, and -no, you can't take money from one job to start another just because someone can't pay ( ( but we know it happens )
                  If I want to buy a car for £ 10,000 and I can't aford to pay cash. I get a bank loan. Millions of people do that.
                  Leasehold is no different,-- no money, then they get a loan.

                  Also, as you will not be a financially accredited money lender, you can't take money from the service charge pot, to basicly lend it to a leaseholder so you can start the jobs.

                  Any leaseholder can take the Directors to court ( Take the company to court ) for not maintaining the property and not keeping it in good order, and well maintained, and within a reasonable time to get maintenance done.

                  Keep to the rules, even the unwritten rules, and do your best to tell people that they can have their own house, and can let it fall into disrepair, but they are not allowed to let a building fall into disrepair when other unrelated people live there.


                  Comment


                    #10
                    Being a director of a RMC is a World away from being a director of a major PLC. For a start, you do not normally have many volunteers so you are quite right to make appointments before members change their minds. Directors are supposed to represent the members which in your case are the leaseholders, so again you are quite right to assist leaseholders if you can, These are exceptional times and you are right to take them into account. Managing a block is not black and white as portrayed, there are often works which can be delayed without detriment to the building or leaseholders. It pays to keep in touch with the members/leaseholders and exchange views with them, it is not necessary to wait until September. Communication is important and especially explaining why you are taking decisions with which some may disagree.

                    Comment


                      #11
                      Hi Eagle2, we have written to owners to get an idea on who wants to phase and who wants to do works in one hit. Whilst I agree some works can wait , I think when it is works on the building they are best to get done asap. The owners who are against this work ,would be first to complain if it was their property directly affected , and we have responsibility under the lease . Had previous directors after in accordance with the lease we would not be in the position. If owners decided to not abide by the lease would that not be wrong ? what is the point of a lease if it is not abided by. I understand phasing, but in this case ,I think it's the wrong way to go; we are dealing with wear and tear ,age related items, all of which are the same age and suffering . We also have other works that need doing coming up .
                      As with regard the appointment of the new directors , I will look into having them ratified before agm.
                      As always thank you both for your input .

                      Comment


                        #12
                        Dear thenunn,
                        Posts 9 ( ram ) and 10 ( eagle2 ) are both correct for specific circumstances.

                        What you should not allow, is leaseholders to state they won't get repairs done because it costs them money which they would rather not spend. it happens all the time.

                        Note that any leasholder can take the company to court ( i.e. the directors ) for historical neglect, which I will be doing to one company shortly.

                        Recent cases that charged the companies ( i.e. the directors who had to pay the difference out of their own pockets ) Court orders to pay back leaseholders...........


                        Continental Property Ventures Inc v White [2006] 1 EGLR 85, Lands Tribunal.
                        The cost of a landlord's historical neglect of a property cannot be passed on to a leaseholder through a service charge. In one case, where the costs of repair work were increased because of the landlord's earlier delay in acting to repair damage, those costs were not reasonably incurred and the leaseholder had a defence to their recovery.

                        Daejan Properties Limited v Griffin & Anor
                        Decision of the Upper Chamber of the Lands Tribunal in relation to a claim by Leaseholders that their Service Charge should be reduced, and that they should receive damages, because a repair was overdue. The Upper Tribunal ruled that an overdue repair only gives legal reason for a reduction in a Service Charge if the repair becomes more expensive because it was delayed.

                        .In Daejan Properties Ltd v (1) Griffin (2) Mathew,
                        the Upper Tribunal gave the following guidance on historic neglect:

                        “The only route by which an allegation of historic neglect may provide a defence to a claim for service charges is if it can be shown that, but for a failure by the landlord to make good a defect at the time required by its covenant, part of the cost eventually incurred in remedying that defect, or the whole of the cost of remedying consequential defects, would have been avoided.

                        “In those circumstances the tenant to whom the repairing obligation was owed has a claim in damages for breach of covenant, and that claim may be set off against the same tenant’s liability to contribute through the service charge to the cost of the remedial work.


                        Some of these rulings will have cost the directors thousands of pounds, and in your case, tell the 2 current directors that they will lose the case if one is brought, and each may be saddled with, lets say 5 to £ 10,000 to repay.

                        Once you let leaseholders decide not to obey the lease and not to carry out repairs when required, then you are lost.
                        Which is exactly what you have done. You asked the leaseholders what they wanted, so of course they will ignore the lease.

                        The directors have a duty to observe the lease AND the R.I.C.S. code of practice, which judges WILL adhere to, and insist it is
                        Adhered to, even though the R.I.C.S. code of practice is just a code.

                        I DO understand leasehold problems, but all too often the directors rule with their leasholders hats on and not with their directors hat on.

                        I have a situation where i was brought in to get a place up to speed, but the leaseholders ( 4 ) are all directors, and all but one refuse to put money in the bank for emergency repairs ( there is currently no money in the bank ) refuse to have meetings, and are happy to ignor the lease in it's entirety. I will be resigning once my contract ends. ( may be sooner ) and they can suffer the concequences of their refusal to get repairs done which is currently slowly destroying the fabric of the building, and as I am responsible for fixing that problem; me, as an officer of the company, can be taken to court. so no thank you-- i'm out.

                        good luck.



                        .

                        Comment


                          #13
                          Hi Eagle2, we have written to owners to get an idea on who wants to phase and who wants to do works in one hit. Whilst I agree some works can wait , I think when it is works on the building they are best to get done asap. The owners who are against this work ,would be first to complain if it was their property directly affected , and we have responsibility under the lease . Had previous directors after in accordance with the lease we would not be in the position. If owners decided to not abide by the lease would that not be wrong ? what is the point of a lease if it is not abided by. I understand phasing, but in this case ,I think it's the wrong way to go; we are dealing with wear and tear ,age related items, all of which are the same age and suffering . We also have other works that need doing coming up .
                          As with regard the appointment of the new directors , I will look into having them ratified before agm.
                          As always thank you both for your input .

                          Comment


                            #14
                            I don't think that I am disagreeing with ram, you are entitled to carry out necessary works and charge the leaseholders. This appears to be a period of transition for you and all I am suggesting is that you try to guide and assist the leaseholders through this difficult time. Some works can be postponed without any loss or damage to the building eg internal redecorations. It is not the leaseholders fault that they have been undercharged in the past and there are insufficient funds to carry out works now. The danger of suddenly charging increased amounts is that the leaseholders may be unable to pay those sums and it may result in them paying nothing at all. Yes, you can take legal action against them but that increases costs which you may not recover in full and delays the receipt of monies. It pays to have a good relationship with leaseholders and there is no reason why you cannot be flexible and agree payment plans with them depending on their circumstances.

                            Comment

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