Freeholder Appointing a Block Manager - Can it be Challenged

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    Freeholder Appointing a Block Manager - Can it be Challenged

    Good Evening,

    I've regularly read these forums over the last few years and not posted previously. Before I do thank you all, many of the replies have been extremely helpful in our efforts dealing with a difficult an extremely freeholder whom only wants deal with us through solicitors...

    My question relates to whether the freeholder can appoint a Block Manager without consultation?

    By way of background.

    - Its a converted property with only 2 flats and no communal space so the remit is very limited.
    - We are leaseholders and live in the downstairs flat.
    - The upstairs flat is let out, and the leaseholder is also the freeholder.
    - Our ownership predates the current leaseholder/freeholder upstairs. Historically relations between both properties have always been excellent with all maintenance was discussed and agreed.
    - The new owners however had a different approach and instructed a major external rendering project without any consultation, in fact any communication at all. Just notification of the cost.
    - Furthermore the proposals didn't have Listed Building Consent, and were completely inappropriate, using modern materials on an historic building
    - I'm a heritage structural engineer so got the consents in place but all attempts to discuss the work were ignored, and instead we were threatened by various solicitors.
    - Ultimately we went to FFT and had a local manager appointed whom oversaw the work which was undertaken by a builder I recommended in line with the consents.
    - Whilst we are hugely grateful to the manager, now the rendering work is complete there is no maintenance needed, and nor is anything anticipated in the foreseeable future.
    - The current managers 2 year appointment is about to end and although they have not told us we are aware that the freeholder is trying to appoint directly a new building manager whom we saw outside inspecting the building.

    - My question is whether the freeholder can appoint this NEW Block Manager without consultation? Whilst there is definite value in having a manager to act impartially, the current block manager refused to work for them directly to ensure exactly this and he insisted on tribunal to ensure he could always act fairly. Furthermore, I can't see how imposing a monthly charge can be justified when there is no planned maintenance work. We will likely be spending far more in admin fees that actual maintenance. When we saw the proposed new manager outside they agreed with this.

    The final thing is that the current freeholder is on the process of selling up so (leasehold and freehold). Its at a very advanced stage so I'm not even sure why they are trying to make this appointment.

    Any feedback would be greatly appreciated.

    Many thanks.

    #2
    Yes, as long as the "Block Manager" (which I assume means a managing agent) is employed on a contract that is not for more than a year, no consultation is required.
    The contract can then be renewed indefinitely without consultation - as long it isn't for more than a year at a time.

    Comment


      #3
      Macromia, Thank you for your response. Much appreciated. It sounds like it will be necessary to go to tribunal again so we can ensure that we have a managing agent that is able to act impartially.

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        #4
        It depends on the lease. My lease doesn't cover management costs - only the maintenance costs.
        what does your lease say?

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          #5
          Hi Anna, thank you for your response. I was wondering similar to be honest. As it’s just a house split in two there’s never been a requirement for a manager, and it certainty wouldn’t have been envisaged when the lease was drafted as the intention was to share the freehold. When I checked the lease it only mentions “rent” payable from time to time for the LL to undertake their obligations. These are basically insuring, repairs, and lease enforcing. There is no mention of a manager anywhere and there is not, and never has been a regular service charge payable. Given no repairs are actually needed at present I do question why we need a manager. Thanks again for your response

          Comment


            #6
            I cannot imagine why a manager would be required for two flats with no communal areas.

            Anna1985 is correct the lease needs to allow for management costs for these to be recoverable. So if the lease does not allow for the freeholder's management costs, the freeholder will need to cover the cost. There is nothing to prevent the freeholder using an agent though if they cover the cost.

            The only complication may be that you initially applied to the FTT for a manager to be appointed.

            Comment


              #7
              Vmart, thank you for your response. I’ve reread the lease and done some digging online and am pretty confident that the lease doesn’t allow management costs to be recovered. You make a good point about my application for a manager but that was primarily to oversee the major repair project. Now that’s complete there’s no justification. Many thanks for your help.

              Comment


                #8
                I agree with vmart, it is not normally necessary for a building with 2 units to be managed and most managing agents would not be interested in being involved.

                You are right to be wary, the freeholder would be looking to recover his costs one way or another. The sale of the freehold is important and it all depends who purchases it. You may be lucky and find someone with views similar to yours or you may find a rogue freeholder acquiring it who would make your life a misery.

                You can apply to the FTT to extend the term of the current manager but I am not sure that is in your best interests if there are no immediate works required. That would deter any potential purchasers of your property because it highlights that there have been serious issues at the building.

                Ideally, you should buy the freehold or at least obtain an equal share in it. If that is not possible, I would seriously consider selling your property,

                Comment


                  #9
                  Thanks Eagle2. I’ve received some excellent informed advice. Much to think about.

                  Comment


                    #10
                    If the freeholder is selling, are you (or perhaps with others as an investment property) able to buy the flat/freehold? I take it the leasehold and freehold are on the same title.

                    Comment


                      #11
                      You should also look into Right to First Refusal. It does apply where there are two flats but if the freeholder is a resident landlord (genuinely living on the premises) and has done so for > 12 months then it would not apply. The other condition is the premises cannot be a purpose-built block which evidently your building is not. See the LEASE site.

                      Comment


                        #12
                        Thanks VSmart, we tried that and managed to get the freeholder to serve the notice making the offer to us but more than 50% of leaseholders need to accept it so we needed their agreement. Even though they we offered a five figure sum they still refused and have instead chosen to effectively pass it in to their buyers for free.

                        Thanks to the advice on this forum I’ve managed to establish that our lease doesn’t allow management costs to be collected from leaseholders so this is far from over as the buyers don’t want to manage thr property, and can’t make us pay for a manager. All the local property managers agree that the freehold should be split so hopefully common sense will prevail, alternatively we will go back down the FTT appointment if manager route, the house is listed and we still have some serious repairs to undertake in the lower ground floor to rectify water ingress. Many thanks for your message.

                        Comment


                          #13
                          I feel you are in a strong position to resolve this when the new lessee/freeholder buys the property. This will be your opportunity to 'sell yourself' as a good, reasonable neighbour and suggest you split the freehold and manage things between yourselves. You could even offer them a premium for 50% of the freehold which will arguably be an unexpected windfall from their viewpoint. For now, I would bide my time.

                          Personally, the last thing I would want is a manager appointed by the FTT as I've read too many horror stories. Your experience sounded positive, in the circumstances, but you might not be so lucky next times. Costs can escalate and the manager is not accountable in any way to leaseholders and the FTT are likely to side with the manager where litigation proves necessary.

                          Comment


                            #14
                            Thanks VSmart, I agree completely and hope that’s how this goes. If they were to take informed advice they would realise that this is the most pragmatic way.

                            Comment


                              #15
                              I'm a bit confused about the situation here.
                              If the leaseholder of the upstairs flat is also the freeholder, and wants to sell their flat, it does make sense for them to want to retain the whole freehold to be able to offer the freehold with the sale of the flat (and there is nothing at all that you can do to prevent that).
                              On the other hand, it doesn't seem to make any sense to sign a contract with a managing agent in the meantime - unless they have have agreed that the contract will end if the property is sold (with the current freeholder paying any costs of ending the contract) unless the new owner wishes to continue to employ the same managing agent.

                              Unfortunately you have no rights here that can be activated. A managing agent can be appointed (if the lease doesn't specifically prevent this) and, although you have a right to be offered first refusal on the freehold, you can't actually get this in a 2 flat block if the other leaseholder won't allow it.
                              The advice regarding whether or not managing agent fees can be collected via the service charges is good, you just need to be aware that the lease doesn't necessarily have to mention "managing agents" for these costs to be deemed payable by a court/tribunal - any reference to the costs involved with managing/maintenance of the property might potentially be deemed legally acceptable, the exact wording in your lease is important.

                              What is most relevant is making sure that you have a good relationship with the new leaseholder/freeholder. If they are at all interested in minimising costs it will be to their advance to come to some sort of agreement that doesn't involve a third party managing agent. If they aren't interested in minimising costs, and really don't want to manage the property themselves, there is pretty much nothing that you can do to stop a managing agent being employed.

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