RMC who decides annual budget

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    Originally posted by scot22 View Post
    Is the budget a board of directors decision or MUST it be ratified by shareholders at the A.G.M ? If so would it be an ordinary resolution or special requiring 75% to be ratified ?
    As already said, company directors are responsible to manage. If the directors do not table a resolution invited members to vote on a budget (and they would be fools to do so), the members must use a special resolution to force the directors to a different outcome. Unless the articles of the RMC say something different.

    It takes only a few years' managing even a Dad's Army platoon to learn that the ideal of its members gathering once a year to vote on the platoon's operating budget is a farce. They 'receive' the budget. Otherwise members with no legal liability to manage the platoon can set a budget that the captain cannot work within. Not enough funds for ammunition because its gone on woolly hats.

    Dad's Army platoons don't get to give orders. What would Capt Manwaring say?

    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.


      The agent should never be allowed the freedom to set the budget, it should recommend expenditure but it should never be the one to set it. Otherwise, a substantial part of the expenditure is likely to end up in the hands of that agent and its connected contractors,

      The agent should always be controlled by the RMC and usually that is the responsibility of the directors.

      In my experience, whenever members have been involved, they have always acted responsibly and they have approved budgets when the expenditure has been properly explained to them.

      There is no question that only a simple majority vote is required by members voting on the day, why should a special resolution be required? Members can remove directors or the agent with an ordinary resolution.


        I may have shares in B.T. so can I object to their spending of £ millions on below ? which are not needed, as there are plenty of other firms doing it ?


        I feel it is a waste of money, so can i request a meeting of the shareholders to discuss stopping this spending ?


          Originally posted by eagle2 View Post
          Many of the problems which exist with leasehold properties today are due to some individuals considering that they are not answerable to the members.
          Agreed. As a jaded director self, I battle "maverick" directors and members all the time who want to spend the service charge to their own benefit and think the lease is a boring guidance note they never read. Yes, members control the company. In the real world company members want their company to succeed. Members can, as you say, remove the directors if they call a special notice meeting and have a quorum and a simple majority and somebody to replace the directors (that last point is the kicker bit I find). Then the members all go home until next year.

          In my experience people turn up at AGMs to air grievances and even though they get the budget before it is implemented and can comment, it doesn't mean they bother paying their share or volunteer to help make the company work. I originally argued all chickens in the coop should get to vote on everything. That was before I got the blood stained teeshirt.

          I agree the managing agent should never be allowed to set the budget. Not what I argue. You have active directors who make the decisions knowing the facts because they are active directors managing the managing agent as they must. You can delegate but not abdicate. Active well informed directors keep the managing agent in line. If the agent runs amok, they go and find another agent.

          You can't drive a car from the rear seat. But I accept I bear emotional scars after too many years, so I will go now and get therapy.

          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.


            Thanks everyone who has contributed to the thread. Mr.S I feel your pain. If the therapy works can you share it please.


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