Residents' management company- responsibilities

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    Residents' management company- responsibilities

    Hello,

    I live in a new built block of 24 flats. The developer has now sold all the flats and we are being asked to volunteer for the role of directors as the developer now wishes to resign. The current managing agent which was appointed by the developer wishes to become Secretary of our Resident Management Company (as I understand it is called).
    We are, like many others, very disappointed with the services provided by the current managing agent and would like to change them.
    My question is the following: I suppose that the managing agent signed a contract with the developer which stipulates the length of their contract. Can we change managing agent even if their contract with the developer ends up say in 6 months? Or do we have to wait until the contract ends before appointing someone else?

    Thank you for your help.

    #2
    The developer is presumably a building company. You are being asked to be a Director of the RMC. Does this company itself now own the f/r?
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      The developer will probably have made your RMC the party to the contract with the agent and signed on the RMC's behalf whilst in control of it. If so you will have difficulty in breaking the contract. Ask the agent for a copy of their contract.

      Comment


        #4
        Before any of you become directors as apart of due diligence, you should ask the developer to disclose all contracts and any liabilities and disputes, including any service charge arrears ( omitting the name and address which is data protected).

        The agents performance can be the result of the instructions or lack of from the present directors( the developers) and not a true reflection. Often with new build, issues and tactics with a developer have nothing to do with the agent, but they still get blamed.
        1: Ask to meet one of the principals and the property manager to discuss their ongoing involvement and your concerns as termination can be made on performance not just on expiry.
        2: Suggest a list of things to do, performance required, be realistic though- happy to make suggestions.
        3: Ask if they can and will meet that, and how they would work for the new board and residents, and whether the contract is actually suitable( new build ones are often bare bones and not full management; the developer won't pay for that but tell residents it's what they can expect!)
        4: Agree a probation period.

        If that cannot be met over the time, then you can dismiss under the contract.

        Bear in mind a new agent is not a simple task, if you want to do it right. You need to understand what you are, what you need and what agents are about in order to get what you want and root out the " interactive customer focused website twitter fed & shiny happy new business managers - hey it's no problem" and finding an honest experienced and proven agent- with a solid track record.
        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

        Comment


          #5
          Many thanks for your answers, and sorry for souding dumb in my own answers as I am just starting to take an interest in all this.

          Jeffrey - I believe, if I understand my lease, that the developer is our "landlord" and will remain so: we will carry on paying ground rent and we have not applied to acquire the freehold of the building. We are just "tenants" and after 125 years, all the flats go back to the developer.

          Tulula - following your advice, I have just done that.

          Leaseholdanswers - I think there is nothing to hope from our managing agent for the future any more. They have proved utterly incompetent, uninterested, we have met with them and the developer asking for improvements but nothing has changed. It has been a constant battle for 18 months, and the reviews I have read about their performance in other developments have further confirmed our opinion of them. The developer may not have given them instructions, but on our side, we've been doing that constantly, to no avail. So we would indeed wish to change agent on performance, but the question is are we prevented from doing so by the fact that they have a contract with the developer and not with us? And now, if we can do it right away on performance only, what procedure should we follow?

          Thank you very much.

          Comment


            #6
            Originally posted by isabelle66 View Post
            I believe, if I understand my lease, that the developer is our "landlord" and will remain so: we will carry on paying ground rent and we have not applied to acquire the freehold of the building. We are just "tenants" and after 125 years, all the flats go back to the developer.
            Maybe so, but:
            a. is the Mgt. Co. named as a third party to each lease; and
            b. does the Mgt. Co. own any leasehold reversion?
            If 'no' to both, I wonder how it comes to have any role or rights at all.
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


              #7
              Originally posted by isabelle66 View Post
              Leaseholdanswers - I think there is nothing to hope from our managing agent for the future any more. They have proved utterly incompetent, uninterested, we have met with them and the developer asking for improvements but nothing has changed. It has been a constant battle for 18 months, and the reviews I have read about their performance in other developments have further confirmed our opinion of them. The developer may not have given them instructions, but on our side, we've been doing that constantly, to no avail. So we would indeed wish to change agent on performance, but the question is are we prevented from doing so by the fact that they have a contract with the developer and not with us? And now, if we can do it right away on performance only, what procedure should we follow?

              Thank you very much.
              Then going back to my post carry out the due diligence and see the contract. If as expected the agent has a contract with your man co eg your block of flats residents manangement company, the contract remains with them, it's just the directors who are going to change.

              You can ask that the developer then dismiss the agent as a condition of handover, and you start the process of obtaning an agent. Happy to advise on that in the forum.

              Can you check your lease as per Jeffreys post to ensure the lease is between Freeholder Your RMC and you.

              As to the lease reverting thats right after 125 years but in virtually every case you have the right to extend by 90 years.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


                #8
                1. I suggest 3 to 6 leaseholders volunteer to become Directors of the RMC as you need the power to ask questions ( and to visit and look at the bookkeeping accounts at the management agent's office ) . Start studying the basic conditions of the lease and ask the developer to supply a copy of his MA's service agreement document and note the service charge management fees charged on each flat and the flat transfer fee and notice period required for termination of MA's service. Don't rely of the copy from MA as the signing dates may be "different" .

                2. Don't enter into or make any new agreement with the managing agent until your directors understand the existing situation. Let 2 directors arrange visit to the MA's office to inspect the bookkeeping records and ask questions on any payment arrears of service charge and how many flats paying by monthly bank standing order. Take copies of recent invoice billing from suppliers ( electric, water and cleaning , waste collection , monthly bank statement , summary of building insurance etc ) plus a list of sc billing address for every flat. ( say you want to send a letter to every flat owner to confirm a handover to leaseholders and to warn the flat owners paying by SO of possibel change )

                3. Buy a copy of RICS "Residential Managment Code" from RICS Online Bookshop. This Code gives the standard on how blocks of flats should be managed and gives the legal references to the relevant clauses under the Landlord & Tenant Act 1985 etc.

                4. If the current year service charge is near to the end , then it is best to agree a handover at end of current "service charge year". But if your Agent is named OM or Peverel or Solitaire , then you may prefer to say goodbye asap by serving the notice to terminate after 90 days or whatever period is stated in the service agreement. Be polite and say your block plans to self manage the building.

                5. Check Companies House for the listing of the RMC ( Residents Management Co) and look to see if due date for making returns is approaching . You may need to move the RMC "registered office" away to another address ( e.g accountant office ) .

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