Kicking the apartment management company into touch

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I own an apartment in Birmingham and for the last two years I have received a bill on top of the normal management fees. Kicking the apartment management company into touch

Each year the management company claims it has had unexpected costs which they have needed to meet and which they can charge the leaseholders for.

Is this right and what can be done?

I know if 50% of us freeholders agree we can kick them into touch and form our own management company but how do I start the process and how do I found out who the other freeholders are.

Please help

Sheila Ralph

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Comments

  • I own two flats in ablock of ten (bought off-plan in 2004) and tried to gether the other leaseholders together for this very purpose, especially after the freeholder, Simarc, started making unreasonable demands for fees for “Administration” in relation to subletting. – They wanted £100 a time, my solicitor advised £15 was reasonable so this I have paid and , amazingly, they accepted, but I digress…

    The first thing I found was another chap who owned three of the flats. Because he owned three, he was excluded from forming part of the 50% of leaseholders under the Housing Act amendment of 2005…!!  Amazingly illogical and unfair I thought, but there’s nowt you can do about it. So it was down to me to find three other leaseholders to join the crusade. One was a yes, two were NO’s and the others just dithered and delayed. Finally I got one to agree and thus had the necessray 50%.  Solicitors prepared the necessary licence, and the freehold was going for £20,000 -£2000 per flat….  Then the licence papers mysteriously disappeared after being left with dithery person in one of the flats…. The £2000 payment obviously scared them off.   Consequently, we are still at the mercy of the freeholders and the management company, and I am just waiting for the inflated insurance quote to come through as part of the management accounts.  Having had to foot the £500-odd legal bill alone, for an aborted attempt, and having already spent many hours knocking on doors, and trying to canvass support, I am afraid I have given up.   When I buy more properties I will be sticking EXCLUSIVELY to freehold only, and when I decide to downsize, these will be going first.

    I am sure others will have more luck than I experienced  in forming a tenants’ association, but this really was an awful lot of effort (and expense) for nothing at all at the end of the day…


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  • Be careful. As a managing agent I can assure you there are many pitfalls which if you do not know what you are doing could cause you some headaches. I suggest you speak to the freeholder and managing agent just to see where these so called unexpected costs arise – they may be genuine.
    For £4 you can access the freehold title on line which will then give you the names and addresses of the other leseholders.
    I repeat – be careful


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  • Ask for the accounts – you should be provided with them anyway


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  • does anyone know if a management company that is the freeholder (and a social LL and owner of much of the ex council stock for the area), can be removed from being the management company?


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  • Reply to the comment left by “Antony Richards” at “29/08/2013 – 15:39“:

    Dear Sheila,

    I was in the same position some years ago. I set up my own management company and got the 50% of owners needed to take over the management. I then got letters from the owners stating that they wanted my company to take over the management.  I contacted the existing  management company stating  that we wished to exercise our rite to manage under the legislation at the time.

    It cost me about 500 pound which I got back from the new company. I also saved more than the 500 pound in the first year with lower charges. I have run the company for 10 years now you will also fined that the flats are easier to sell and are worth more.

    You don’t need the freehold to manage the block but they must be informed. You must ensure that the block is maintained and insured along with running a limited company. You may find that purely by telling the company what you intent to do will get them to reduce their charges.

    They did offer me a 50% reduction when I first started as they new that they had no option by to release control.


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  • I suggest you look on the ARMA website at their advice notes and in particular LAN07 which is about the s20 consultation procedures which should be followed in the event of qualifying expenditure. Also Philips v Francis 2012 is relevant


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  • Reply to the comment left by “Lizzie J” at “30/08/2013 – 08:06“:

    PS I should have also said: take a look at Daejan Investments Ltd v Benson & Others 2013 – there is a view that this appears to give the LVT wider powers to dispense with the statutory consultation requirements. As ever things are rarely black and white!


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  • Forming an right to manage company  is reasonably simple  if you can get a 50% of the lessees

    to agree.

    There are many ways of finding out who your co lessees are, the least successful of which is

    the land registry as they often do not give the correspondence addresses of a lessee but rather

    the flat address and you may need to be detective.

    However, there are pitfalls,  everylessee who wants to be a director of the rtm has to have director’s and officer’s insurance ( which is quite costly and not everyone can get this), any one coming

    forward has to realise they have responsibilities in exactly the same way a professional

    management company does and they may be forced in  law to comply with these requirements

    and in some cases to advance monies if work is urgentand funds have not yet been collected.

    Initially the way forward is to challenge what you see as the unfair management costs and see

    where that gets you.

    I am afraid I do not agree with Chris Bunn’s comments.  Other than in exceptional

    circumstances it is much better for an independent well run management company to deal

    a block and this is normally reflected both in the values maintained at the block and the level

    of service.   Many rtms cut corners and this always goes run in the end


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  • Viz a via Lizzie’s comments Tribunal and/or the LVT are actually very sensible and are made

    up of professionals with an understanding of the cases before them.   Sometimes lessees and

    rtm’s think that the purpose of these forums is to rubber stamp any nonsense that they can

    think of to get out of paying service charges, refurbishment monies, etc when in reality they

    exist to ensure that leasehold law is applied fairly and reasonably.   They also act to assist

    freeholders and managing agents who are having trouble getting a refurbishment or

    necessary major work off the ground and are able to determine whether or not a project

    should go ahead with the lessees having to contribute

    I have never been to Tribunal/LVT but my husband has and he says their professionalism

    is exceptional.

    The bottom line is that whether you are a freeholder who is self managing, an rtm or a

    management company if you are embarking on any work which is at all likely to be

    challenged then do not do it without the input of a really good chartered surveyor.  Apart from

    anything else he is covered by professional indemnity insurance

     


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