Resigning as RTM Director

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    Resigning as RTM Director

    Hi,

    After several years as a Director handling the admin for our small RTM I've had enough chasing the other two flat owners/directors who contribute very little and endlessly footdrag when stuff needs to be done. 90% of my time is spent sending reminder emails and I'm pretty much done with it.
    I'm thinking of resigning as a director and leaving them to it, essentially to force their hand in contributing. I appreciate this might seem a bit extreme but I've exhausted all other possibilities to get them to do their share.
    Moving forward I'd be prepared to help out informally but its just that I don't want the legal obligation that comes with being a director (their intransigence in paying/agreeing to stuff means we haven't met basic health and safety regs among other things)

    What are the downsides of doing this and resigning as a director and just staying on as a member? It feels like the admin/upkeep of the block would go south but I'd benefit from less aggro & no liability moving forward for any non compliance with regulations.

    Thanks in advance


    ​​​

    #2
    You need to check your M&A, you can't resign if it leaves the RTM with insufficient directors

    Comment


      #3
      Originally posted by Section20z View Post
      You need to check your M&A, you can't resign if it leaves the RTM with insufficient directors
      Yes you can

      Comment


        #4
        Downsides.
        You wont force their hand to do anything.
        They will just do nothing, no maintenence, no legal requirements implemented.( Saves them money )

        Possibility of the company being struck off because the others wont submit accounts to Companies house, ( saves the acountants fees ) even dormant accounts. which the first letter from them says they will fine you about £375, and if still not paid, expect up to £ 5000 fine - which the directors will have to pay.

        If struck off, you lose the freehold, as the freehold is owned by the Company, but if there is no longer a company, the Crown gains the freehold - but they wont run the place, and if you want to sell, you can't because there is no freeholder to contact, and no freeholder to enforce the lease re service charges etc
        And buyers will be told no mortgage can be given as no one ( legaly ) looks after the place so the lenders "asset" would deminish in price if they ever have to forfeit a flat for none paymeny, and they would not be able to sell either.

        Am currently in your position as an independant Company Secretary, with the same problems as you.

        Copy from recent email to directors, last week ---
        The directors refuse to have meetings, refuse to ensure ample funds in the bank, constant urgent requests to get money in to pay forthcoming bills, Wont abide by legaly required inspections, wont enforce the lease. A waste of time issuing ( for director approval) draft service charge demands, as they just wont agree, and wont pay.. Then i will seriously consider resigning shortly.

        £ 20 per week I get for all that hassle, ( excluding holidays ) and as an officer of the Company, I can be responsible ( as you can if you are a director ) for any injury or death inflicted on tenants or visitors if the "officers" were negligent in maintianing the premises in "Good and substntial repair"
        And as I am responsible ( as you seem to be ) for ensuring the maintenence is carried out, and I failed in my duty to carry out the maintenence, even through funds not being availabe, I could be prosecuted, and not the Directors.

        Your best bet is to go to the F.T.T. and state the other directors are refusing to enforce the lease, ,then after the "Determination" and if other directors ignor the "Determination", you will have to go to court with your "Determination" and judge should issue a court order to make the directors enforce the lease
        BUT, is best you resign, as if you are a director, a determination and court order applies to the freeholder, and you are a joint freeholder.

        If you prefer, you can go to the F.T.T. and apply for a manager to be appointed, look it up. But don't forget your pre action letter - as some web sited don't mention this.

        Must rush --





        Comment


          #5
          Hi,

          Of course you can just resign. Write a letter to the registered office saying " I resign as a director of X Limited with immediate effect". No need to get bitter and rowdy. Hand back the keys to the company Rolls Royce and any company documents (insurance documents etc) to the company secretary, or tell the other directors where to come and collect. Keep all your own records for ten years. I warn you though (not as eloquently as RAM) that resigning can make you nervous as to what is happening to your management company and your service charges. I lasted a year and rejoined the 'board'. It's a hoot, leasehold.
          Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

          Comment


            #6
            Originally posted by MrSoffit View Post
            It's a hoot, leasehold.
            It certainly IS,

            But once no longer a Director or Company Sec, you can shout at them as much as you like.
            They can't sack you, can't force you out, can't make you pay more service charges just because you upset them.
            They won't talk to you or say good morning to you when passing, and I currently ignore them totally if seen outside, unless it's in writing.
            Demand ( after a year or two ) to see the accounts, the invoices, and if they don't allow you within about 28 days, that is illegal you tell them a court order can be issued, and they will have to pay your costs ( true or not )

            I now enjoy not being an officer in any form where i am a leaseholder ( after resigning ) as i constantly tell them which parts of the lease they are refusing to enforce, and even letters to me re my "infractions" - ( minor ) , some of which are deliberate to get a reaction, I shoot them down in flames, and hear no more. Will be my undoing one day but they wont enforce the lease cos it will cost them money,


            Sorry - i digress.




            Comment


              #7
              Although you can resign #3, the Company cannot accept your resignation if the number of directors falls below the minimum number #2, so as an officer of the Company, you are obliged to act in the Company's best interests and ensure that someone else is appointed a director to maintain the required number of directors.

              I suggest that you arrange a meeting of members and try to agree a way forward.

              Comment


                #8
                Originally posted by eagle2 View Post
                Although you can resign #3, the Company cannot accept your resignation
                I suggest that you arrange a meeting of members and try to agree a way forward.
                There are at least 2 directors possibly 3 as per statement
                "I've had enough chasing the other two flat owners/directors who contribute very little and endlessly footdrag when stuff needs to be done"
                .
                AND there will be a minimum of 1 director if MrT2014 resigns, and it will be up to THAT director to ensure there is a minimum number of dirctors, not MrT2014.
                But i think you only now need on director.

                Re- "try to agree a way forward"
                I state again "chasing the other two flat owners/directors who contribute very little and endlessly footdrag when stuff needs to be done"
                Therefore it will be pointless to yet again try to agree a way forward.

                This is why some of my coments everywhere, not just here, can be classed as agressive, bombastic, inconsiderate.
                I know that being kind ( try to agree a way forward ) if failed onece, WILL fail again. ( been there-done that ) and I am about to resign as an independant Company Secretary / property manager as the 3 directors will do nothng. Wont enforce the lease, and identical to MrT2014

                NOTE TO MrT2014
                As you are responsible for keeping the place legal, getting in workmen to attend to repairs and maintenence, then YOU can be prosecuted if repairs are not done and as a result, if something fails and injures someone or even kills someone. FACT.
                Thats why I am resigning one of my Company secretary roles 1) because like you, am tired banging my head against a brick wall and
                2) I don't want a personal fine or to go to prison.

                Get out now, AND sell and move, as it will ony get worse, and applying to the F.T.T. for a manager wont work as I constantly hear that no one wants to take on a 3 / 4 flat property, as it's financially prohibitive.
                Normal charge to manage is £ 100 to £ 175 per flat per year.
                I am charging £ 250 per flat per year as there are only 4 flats
                Yours would be about £ 1500 total ( due to none complience by the directors ) and that's £ 500 per flat. No one will want to pay that, and you would be seen as an evil bastard for getting in a Government appointed manager.

                sell and move.






                Comment


                  #9
                  Hi, I'm interested in #7's source of advice? As a long time jaded RTM director I have had cause to research the issue of resigning.

                  Nowhere did I find in any legal source that the Board must accept a resignation for it to apply. Unless there is a director service agreement stipulating a notice period - and this is an RTM company which I suspect has no such agreements or even a members register?

                  On receiving a written resignation, the company must inform CH using form TM01 and record the resignation in its directors register. I'd bet a jam sandwich there is no directors register either?

                  It is of course known for all volunteer RTM directors to b****r orf en masse, leaving the company to be struck off. That is not wise. If there are three left now, leave now and leave the last one to turn the legal lights out before they resign and leave you to do it. Just my opinion.

                  Or take some meds and struggle on. The definition of insanity is repeating the same actions in the hope that this time against all previous experience you will make a difference. meanwhile you are also a Responsible Person for fire risk management. If nothing else that might keep up screaming at the moon about your fellows.
                  Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                  Comment


                    #10
                    It is a common feature that one person volunteers to perform duties and others sit back and do next to nothing, it would be much better if the workload was shared evenly at the outset. It isn't too late to have a meeting with the members and explain that you are unwilling to carry out more than your fair share.

                    If everyone sells when they encounter a problem, there will be a lot of selling, perhaps ram is providing a sales agency now.

                    Comment


                      #11
                      Originally posted by MrSoffit View Post
                      Hi, I'm interested in #7's source of advice? As a long time jaded RTM director I have had cause to research the issue of resigning.

                      Nowhere did I find in any legal source that the Board must accept a resignation for it to apply. Unless there is a director service agreement stipulating a notice period - and this is an RTM company which I suspect has no such agreements or even a members register?

                      On receiving a written resignation, the company must inform CH using form TM01 and record the resignation in its directors register. I'd bet a jam sandwich there is no directors register either?
                      s155 CA 2006 states that each Company must have at least one director who is a natural person. The Articles may set a minimum number of directors, which is greater than one.

                      The Company must comply with the legislation and with its own Articles therefore it cannot accept a resignation which would take the number of directors below the minimum, it must seek another director first,

                      Companies House used to check the forms and reject them if there was not at least one director remaining. Nowadays, they allow the Company and the director, who considers that he has resigned, to face the consequences..

                      Comment


                        #12
                        Originally posted by eagle2 View Post
                        Perhaps Ram is providing a sales agency now.


                        If you don't want me to pass on my real life experiences, then please formally say so.

                        But your request will be denied.

                        No hard feelings. Keep up the good work.


                        Comment


                          #13
                          Shows the importance of using caution when getting advice from some bloke off the internet. A company can't act without it's minimum number of directors and therefore can't submit a resignation.
                          Obviously for an RTM there is no need to worry about the Freehold reverting to the Crown but still best not to close down the company as you could lose the hard won control.
                          Best advice is sort it amongst yourselves....

                          Comment


                            #14
                            " I've had enough chasing the other two flat owners/directors " The OP says there are three directors, two doing nowt? If the OP wants to resign, the "company" has no grounds to stop it. There is no 'minimum' issue in this case?
                            Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

                            Comment


                              #15
                              Why can a managing agent file the TM01 for the only director of a RMC then, given the AoA required the company to have a minimum of two directors.

                              This happened with ours and left the only officer of the company being the managing agent acting as the company secretary.

                              Companies House had no problem allowing the director to resign, however started strike off proceedings when the confirmation statement wasn't filed.

                              Comment

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