I think I may need to take myself to court?

[mattl]

Hi guys,

I've got a flat in a block of 16 and the freeholder is the MgmtCo Ltd of which all 16 lessees are members and some (including myself) are directors.

At the moment the common parts of the block are scandalous and are not maintained - rubbish piling up, broken glass everywhere, staircase unlit etc. pp.

I have been trying for a couple of months now to arrange for repair quotes and maintenance quotes but none of the other directors (and members of the MgmtCo) seems interested. All flats are tenanted out (mine isn't) and from the looks of it the other landlords can't be asked to spend money on maintenance.

So - I think I may need to take the freeholder to court/tribunal to

(a) find the various breaches of lease for not maintaining the common parts
(b) ask to install a property manager for the block.

The obvious problem is - the MgmtCo is a limited company and (assuming I win in court/tribunal) if their members don't pay the costs then the company will simply go bust and I won't be able to get my costs back.

Does that mean as creditor of the company I can then take over the freehold for the whole block, as this is the MgmtCo's only asset?

Also, presumably once a property manager is appointed by the court/tribunal they will then need to start work by asking all 16 lessees to pay money into a maintenance and block management fund - and then presumably start taking other lessees to court over payment of their share of the maintenance costs if they don't pay.

Who is initially paying for all this? Or are there property managers around who are happy to do all of this upfront in order to recover their costs?

I'm sort of stuck between a rock and a hard place because ultimately, my flat is losing money if I cannot sort out the block management.

Any advice would be great.

Many thanks,

Matt

[JK0]

I think you need the FTT rather than court don't you? Costs there are only a few hundred.

[mattl]

Yes it's going to be the FTT but to be honest I may need some legal advice on doing this properly rather than DIY. Are costs for legal representation not recoverable in the FTT?

[JK0]

Not sure. Wait for LHA to come along.

[ram]

Read your own lease.
Does it say anywhere that the freeholder that the premises to be " maintained and kept in good order ?

If so, the "Directors are failing in thier duties" and you can "tell" the directors that if the place is not maintained, you will remove yourself as a Director, so that you may go to the FTT and ask for a manager to be appointed.
The lease must also state that each leaseholder will be responsible to pay the service charges as submitted, every year, be it one 16th, or ortherwise.

Appointing a manager, and it sounds as though you would be sucessful, will remove all the directors powers, insomuch as the new manager sets the maintenence, issues service charge demanads to fix the place, and the other directors will have no power to stop the place being brought back to a well maintained property, and all leaseholders will have to pay the costs ( assuming the lease states leasholders are contracted to pay service charges.

[mattl]

Ram - this is exactly (pretty much word for word!) what I have done. So far no result - the others are clearly not bothered.

Hence I now need to start the next steps. Good point on me retiring as a Director, presumably I would need to do this otherwise I would really sue myself?

[ram]

Good point on me retiring as a Director, presumably I would need to do this otherwise I would really sue myself?

If you are a Director of the company that owns the freehold ( That's the way it usualy works ) then if someone goes so far as to a first step, to sue the company for not obeying the covenants of the lease, and a court order is issued for the Company to uphold the lease and get the jobs done, then you as a director will have a court order against you ( as will the other Directors ).

But once removed as a Director, do not expect to be voted back in by the "Don't give a dam" other Directors, so best to go to the FTT to get a manager appointed, thereby retaining your directorship.
Ask for a 2 year Manager

Your stance with the other Directors is, if they don't obey the lease to keep the place in good condition ( read the lease and get back to us on that ) that they will be taken to court by you, and may be fined, or have a criminal record if they don't do anything before you are forced to sue them.

Go to the FTT first, it may cost you personaly £ 150 to £ 350 but worth it in the long run.

Your question "Are costs for legal representation recoverable in the FTT ? "
Some costs are, and that is usualy only for the Company "small" expenditure, but you will be going to the FTT as a private leaseholder, not as the Freeholder.

Write to all the Directors stating they are in breach of their obligations under the lease ( check it ) and as the lease is a legally binding document, they are committing a criminal act.
And as they just don't care, that they either resign, or face court action in which they WILL be found guilty.
Send a pre written resignation forms too, to show you mean business. They either resign as being unfit to hold the office of a Director, or they face court action.

You MUST fill in a Preliminary notice Application for the apointment of a Manager form, and send it to all the leaseholders, yes, all 16. to advise what the faults are and what is needed to be done to stop you making an aplication under section 22 of the Landlord and Tenant Act 1987.

But don't do this untill you shock the Directors with your plans to sue them ( Dont mention you will be going to the FTT, just say you will sue them.
If you go straigth to court, for the freeholder not observing the lease, the coust may pass you over to the FTT before the court can act ( But dont tell the directors that, see how they react to potentially being sued.

Have fun.

R.a.M.

[leaseholdanswers]

Not sure. Wait for LHA to come along.

Enters building doughnut in mid scoff & looks surprised " who, me?"

[leaseholdanswers]

Quite frankly if your articles are older than 2009 then I would get out the typewriter and serve the notice of intention and consult all leaseholders, and then progress to the notice of estimates. Just check your leases as to when you ca raise funds to time the pricing of the works and the estimated time to recover costs.

None of that is going to be costly and printing postage etc can come out of the existing service charge fund.

Let the board and shareholders, and wearing their leaseholders hats, object or respond. If and when they do( and you must pay regard to and respond to observations) then the response is simple "as a leaseholder I will apply to the court to appoint a manager as you the landlord are refusing to look after the property".

As the nuclear option it forces them to agree or at least not try to block you, as they are by obstruction, giving you the evidence needed to successfully apply ( and crucially incurring very little cost).

You can also apply to the FTT to determine the cost is reasonable and serve the notice on everyone and it is very likely that the FTT will determine that the cost is recoverable. That opens the door to action in the county court for non payment.

If anyone objects then you wave the section 22 noticehttp://www.legislation.gov.uk/ukpga/1987/31/part/II and smile "manager........."

But don't expect any Xmas cards.

[andydd]

Are the others happy to sit and watch as the property crumbles and affects the income they can get from tenants ?

[mattl]

I'm confused now.

Quite frankly if your articles are older than 2009 then I would get out the typewriter and serve the notice of intention and consult all leaseholders, and then progress to the notice of estimates. Just check your leases as to when you ca raise funds to time the pricing of the works and the estimated time to recover costs.

The leases simply say that the Lessee covenants with the Lessor to "contribute and pay part of the costs expenses outgoings and matters mentioned in the Seventh Schedule hereto in the proportions specified in the said Seventh Schedule hereto"; that Schedule just gives heads of cost and proportions e.g. Roof repair - 1/16 etc.

Are you talking about a notice of intention to do all the maintenance/repairs which needs doing, and a notice of estimates for the costs of doing so? The problem is, I am not in a position to sort all this out as I am remote from the property, hence why I would need a local property manager for getting quotes etc. together and for managing it.

Also, the company articles of association say that all Directors nominate a Chair who is doing the day to day management. That chair is local but is doing nothing.

None of that is going to be costly and printing postage etc can come out of the existing service charge fund.

Let the board and shareholders, and wearing their leaseholders hats, object or respond. If and when they do( and you must pay regard to and respond to observations) then the response is simple "as a leaseholder I will apply to the court to appoint a manager as you the landlord are refusing to look after the property".

As the nuclear option it forces them to agree or at least not try to block you, as they are by obstruction, giving you the evidence needed to successfully apply ( and crucially incurring very little cost).

So you're saying that once this notification of works has been done and people are still not responsive, that I then should go down the route of threatening of appointing a manager?

You can also apply to the FTT to determine the cost is reasonable and serve the notice on everyone and it is very likely that the FTT will determine that the cost is recoverable. That opens the door to action in the county court for non payment.

If anyone objects then you wave the section 22 noticehttp://www.legislation.gov.uk/ukpga/1987/31/part/II and smile "manager........."

But don't expect any Xmas cards.

I think I understand - but the main problem is still the initial one: at the moment I am not in a position to draw up a table of works required - I've been reading through the RICS guide and to be honest there are probably a large number of points in there which haven't been done so they all could become relevant points. But how to start this given I'm not local to the site?

Any property manager would need to be paid for drawing this list up and that money would need to come from the leaseholders as well - but how to do it if they don't respond?

[mattl]

Are the others happy to sit and watch as the property crumbles and affects the income they can get from tenants ?

They are. Which is weird but there we go. I guess they say "as long as I have a tenant in what do I care". Whereas I don't have a tenant in and thus am struggling...

[bbva]

My advice would be to pay for a solicitor to read the lease very carefully and see exactly what the obligations are. Then go to the FTT to get a manager appointed to sort it out and deal with payments, arrears, works etc.

[leaseholdanswers]

ill respond later no need for lawyers yet we're in the realms of tactics

[leaseholdanswers]

Ok the mention of the articles w sot provoke a reply and we now see that they are definitive in a procedure.

Going back to my email, it matters not in that a director still has the overriding duty and right to act in the best interests of the company. The articles would therefore only conflict with your actions and that right and duty, and their stipulation. Where obligations are outright ignored then it would be hard for any court to find that you acted inappropriately.

The intention of the notice of intention is to set the cat amongst the pigeons. Even if you a remote, and perhaps a visit or a friend who can take a few digital pictures would assist you in broadly outlining what needs doing eg int decs new carpet etc.

There is no reason why you cannot send along with the notice a letter from yourself stating that if the works do not go ahead then you will exercise your 87 Act rights as a leaseholder, taking it out of everyone’s hands.

That should get the ball rolling.

One of those balls is then to have likeminded people call an EGM and replace the incumbent.

My reply above is therefore about solving the problem.

If of course there is silence then a few hundred pounds on a cursory inspection by a local chartered building surveyor will assist in making a claim to the FTT, and they can award those costs. These can be deducted against service charges in future.

There is no reason why you cannot then pursue a county court action against the company and as you ask ultimately they may have to sell the freehold to you or others to clear that debt, or pay it out of ground rent receipts ( one reason why in threads I constantly urge enfranchising groups to retain a ground rent its there when service charges cant fund debts or losses and is reserve fund of last resort)