Implied covenants

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    #16
    Originally posted by MrSoffit View Post
    Can I step back a smidge: (1) Are you a member of the company? (2) If you have an RMC that owns the freehold, was it via collective enfranchisement and some flats didn't join in? Or did/do all 'Owners of a House" get a share interest in the freehold company on assignment of their lease? (3) Is there a different class of share for some reason?
    Hi again Mr Soffit

    (1) Yes
    (2) Each leaseholder of houses (not flats) has a share and is required to have. That is situation from when leases were granted.
    (3) No.

    Originally posted by MrSoffit View Post
    Shareholders' rights depend on the rights attached to their shares under the company's articles of association. If there aren't different classes of shares and if every lessee is automatically a shareholder, the company must give all shareholders in the same class the same rights as I understand it, so how/when did some company members get to vary their leases to more 'friendly' clauses and block other members having the same right to do this? How does the company make decisions? Who are its directors?
    Rights of shareholders and leaseholders are legally distinct. I suggest in RMC's one often gets a group attempting to manage on the basis of "what the majority want" even if it ignores the rights of a leaseholder. ARMA express it correctly:

    ARMA Advice Note “Understanding Residents’ Management Companies”

    “Your rights as a leaseholder are not restricted if you’re also a member of an RMC.”

    “An RMC board should never, and has no legal right to, take a decision that’s against the terms of the leases for the block — even if there’s complete unanimity. No managing agent should ever advise this either.”


    The varied to more " friendly clauses" occurred when the leases were first issued and i believe, although i could not be certain, that a lease with more "friendly clauses" was dated/issued to the original leaseholder at an earlier date than the date when my lease was issued to the original leaseholder of my property.

    Comment


      #17
      An RMC can't act against the lease, but if all the shareholders in a freeholding RMC agree to vary the lease that's not the same as acting against it. If they don't then it needs a tribunal application.

      As I understand these setups the RMC and its articles and lessee share class kick in after all the leases are assigned by the developer who then bows out of control? Or along those lines - which would suggest, as you think, that the RMC did not create the different leases. I guess this explains why the one with a better lease never saw a reason to agree to a unanimous shareholder vote to grant variations to the rest to bring them all into line? But I'm confused why if only one house has the better lease, you say 'some' shareholders did major alterations and are making it difficult for others? Is the 'luckier' leaseholder a director?

      On non-lawyer reading of the clause in post #3 it binds a new lessee to the lessee obligations in that lease, but contradicts itself by binding all other owners of houses to the same stipulations despite there being different lessee clauses in one lease. It could be the whole thing was a bodge at drafting stage of one lease as it was sold. Not an RMC shareholder myself - just a humble RTM company member.

      At least we've cleared the fog better for anyone who might answer the question whether the 'binding' clause could be a ground for an F-tT application to gain the same stipulations. I've explained why I can't have that confidence. But one objector isn't fatal to a tribunal application to vary the lease if that is the only way to bring everything into line.

      One quick answer regarding consents to alterations could be to stand as a director with anyone else being held back. You say there are only 14 shareholders. Or is the situation now too broken to get elected?
      Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

      Comment


        #18
        Originally posted by MrSoffit View Post
        An RMC can't act against the lease, but if all the shareholders in a freeholding RMC agree to vary the lease that's not the same as acting against it. If they don't then it needs a tribunal application..
        I agree as to the outcome, I thought it was if EACH and ALL leaseholders agreed to the deed of variation it kicked in. ie Unanimous support but not via the shareholders in the RMC rather by leaseholders agreeing. If it was via the RMC after a unanimous vote then there is always the danger that the Directors "redefine the issue" when implementing it.

        Originally posted by MrSoffit View Post
        As I understand these setups the RMC and its articles and lessee share class kick in after all the leases are assigned by the developer who then bows out of control? Or along those lines - which would suggest, as you think, that the RMC did not create the different leases. I guess this explains why those with better leases never saw a reason to agree to a unanimous shareholder vote to grant variations to the rest to bring them all into line.
        if i recall in this case there were two companies, one the freehold company the other the management company. I think the developer had a "controlling share" in the management company until after the last property was sold. Then the freehold company and the management company were combined/merged, i would have to dig out old papers to get the exact answer.

        Originally posted by MrSoffit View Post
        On non-lawyer reading of the clause in post #3 it binds a new lessee to the lessee obligations in that lease, but contradicts itself by binding all other owners of houses to the same stipulations despite there being different lessee clauses in different leases. It could be the whole thing was a bodge at drafting stage of new leases as they were sold. Unless somebody knows if this is common - not an RMC shareholder myself - just a humble RTM company member.
        I suspect it was a clever solicitor for one of the purchasers, who managed to negotiate some better covenants.

        Originally posted by MrSoffit View Post
        At least we've cleared the fog better for anyone who might answer the question whether the 'binding' clause could be a ground for an F-tT application to gain the same stipulations. I've explained why I can't have that confidence.
        Thanks Mr Soffit for your time and patience it is not always easy to set out the detail and nuances of these issues.

        As well as what you describe as the binding clause there is my original question as to whether there is any general "obligation that is implied" for the leases to be on similar terms.

        Comment

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