Breach of service charges by directors

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    Breach of service charges by directors

    We are right to manage with 3 directors
    we all hold one share per flat.
    the development was built in the 70s. The directors have used our service charge funds to purchase garden furniture without the vote of shareholders which has been brought to their attention and they are choosing to ignore. It has been pointed out that the Lease does not include service charges being used for social and recreational products and without the vote of all leaseholders cannot take our funds for this purpose. We have never had garden furniture. It is the process they have taken to purchase without our consent or chance to decide what amount can be spent or design should the vote go in favour.
    l no longer trust them with my service charges as it is being used in a fraudulent manner against the terms of our lease and articles of association and wondered what measures we can now take
    thank you



    #2
    Here we go again . I suggest you search the forum for the endless daily posts of RTMs and RMCs controlled by incompetent / fraudulent lessees
    They probably now outnumber the grievances against professional managing agents and freeholders who manage and maintain properties to a high standard.

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      #3
      We have Managing Agents who are also our Secretary and are excellent and have advised our Directors they cannot use funds for this purpose and has been noted in the last Directors Meeting when this was discussed can we as shareholders ask our Managing Agents to assist in the removal and recompense by the Directors

      Comment


        #4
        Can l put my service charges into an escrow account so they cannot use if for these purposes

        Comment


          #5
          Originally posted by Loudee View Post
          Can l put my service charges into an escrow account so they cannot use if for these purposes
          The service charge should already be in a "client account" on trust for you. If you have a good managing agent then the directors don't need access to the funds as agent controls the budget. You could ask the Agents to remove the directors as signatories to prevent this happening again but not sure how you could recover the funds.

          Comment


            #6
            Originally posted by Section20z View Post
            not sure how you could recover the funds.
            Today, just send them and invoice for your share of the expence, due to erroneously, and also for stealing MY service charge money for none service charge affiliated items.

            List all the items, go on line and find the dearest prices, - add them up, divide by number of leaseholders, and state that if the money is not received into your acount / cheque received within 14 days, you will charge them with theft.

            Yours faithfully etc.


            Comment


              #7
              If you are a director then you could ask the other directors why they are not acting collectively/ holding directors meetings for everyone to attend and discuss. Is a quorum required to make decisions? Check your Articles. Check your lease, it is highly unlikely garden furniture are an item of expenditure which can be recoverable from the lease. Ask them where in the lease does it state - the exact clause that this item is recoverable from the lease? Put this all in writing and keep copies.

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