Does the RTM get dissolved when the Freehold is purchased?

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    Does the RTM get dissolved when the Freehold is purchased?

    Last year we successfully set up a RTM, taken over from our Freeholder. 3 of us became members of the new RTM Limited company (only 6 flats in the building). The Chairman of the RTM had his own property management company so was appointment as the company to manage the building.
    We then purchased the freehold of the building, each having a share, but one of the leaseholders didn't want to partake so the aforementioned Chairman bought 2 shares. He has continued to manage the building.
    The aforementioned Chairman has unfortunately proved to be rather a rogue, taking money from us all to replace a roof (9k), and the work not being done satisfactorily and it is now leaking badly. We have also found out from the previous Freeholder, that he actually paid alot less for the freehold purchase than we were advised - therefore not actually paying anything himself but acquiring 2 shares! We have taken legal advice, and the only action is to go to court which will cost approx 15-20k and we may not get these costs back. In the meantime we have a leaky building, with quotes of 16k to put right!
    My question is, does the RTM still exist, and therefore his appointment as the Management company? Can the new freeholders overturn him and manage the building ourselves? There are 4 of us, and he has 2 shares (6 in total).
    Or alternatively can we take the roofing contractor to Small Claims Court, given that we aren't the Management Company. Advice on way forward would be so appreciated as we are stuck in a very large rut!

    1. If you have all the documentation on buying the freehold and he contributed nothing for his 2 shares , you could try making a claim in the local County court. Court fees for claims 15K to 50K are about £400.

    For info on County Court fees , get a copy of EX50

    2. The RTM company has the legal right to claim and take over the service charge administration from the existing managing agent appointed by the Freeholder. If the freehold has been sold to another company which is owned by 5 flats and not to the RTM company, then the RTM should still exist and still have the legal right to manage the block.

    3. If the Management Company has a signed contract to administer the service charge account, , you can ask the RTM company to show you the MC's Service contract and see what notice period is required to terminate the Service.


      Firstly you need to get rid of the RTM Chairman. I suggest an EGM is called and his resignation is sought.

      If that doesn't work then sack him as a director of the RTM company. The RTM M&As should set out what you need to do.


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