Directorship of a RTM under threat from unpleasant leaseholder?

Directorship of a RTM under threat from unpleasant leaseholder?

10:25 AM, 9th November 2014, About 10 years ago 33

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I am a co-director of a RTM (Right to Manage) company of a development which is extremely challenging to manage. We are now at a critical phase – just about to start major works which will cost about £70K. We’ve been leading up to this point for the last 2 years and, needless to say, none of the other leaseholders (all landlords) never expressed more than a passing interest in the amount of work and effort involved in bringing us to this point.

We have a rare and very able property manager which we are very happy with and trust that he’s acting in the best interest of the site. By the way, if anyone wants a recommendation for a superb property manager (can’t share the area, PM me if interested), I’ll be happy to recommend him.

Anyway, the current works require a contribution of about £5,000 per unit and this has all been collected with minimum pain, thanks to our manager.

Now we have a situation whereby 2 of the other leaseholders are asking for an AGM with a view of replacing one or two of the current directors (myself and my co-director), claiming that we don’t have enough property skills.

The person suggesting this does seem to have plenty of hands on property experience and under normal circumstances, we would have been delighted to add him as a director or even stand down. This site has been a nightmare to manage and both of us can think of a million things we’d rather do with our time than to tackle all the problems it brings us.

However, this person is also extremely unpleasant to work with and we are concerned that if he comes on board, it would make things very hard indeed for everyone.

He has asked for an AGM, with a view of replacing one or both of us.

My questions are:

What are the procedures that the company has to follow to appoint another director?
Who needs to agree or disagree?
Do we need to have a majority vote?
Do we have to have a physical AGM?
Shareholders who didn’t attend the AGM, can they vote?

I suppose, the main question is – how do we stop this from happening?

Would appreciate any input.

NitzanRTM


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Comments

Mike W

17:07 PM, 10th November 2014, About 10 years ago

Nitzan,
I have no experience of a RTM organisation but what I find disturbing in this story is the fact that you are a director and apparently know nothing about the structure of the organisation! The fact that another flat owner has called an AGM tells me he knows more about the organisation than you do.
I would have thought the organisation has rules about AGMs - when was the last? Rules about quorums. Rules about voting. And rules about proxies, and rules about accounts. Get out the paperwork and read it!
Now given that you don't know these rules - apparently - I would suggest that it may be prudent to step down. You may have done your best in the absence of anyone else stepping up to do the work but you said in the first post that you had contemplated sharing the roles and stepping down because it was difficult.
Any challenge from a member is difficult but that is the nature of the business. But with your existing votes you may still be able to out vote him. If you do out vote him you will always have a disgruntled member asking awkward questions.
Good luck.

Annette Stone

17:11 PM, 10th November 2014, About 10 years ago

Joe. We had a similar case a couple of years ago where one person owned multiple flats but the rtm document did not allow one owner to have more than one flat. This may have been a specific document to prevent a small number of lessees taking over for their own benefit. Rtms can actually be far from straightforward although they are often touted as a panacea for all management problems.

I think that this one does need a review of the rtm document before any final decisions are made and perhaps Notzan should do this a.s.a.p

Joe Bloggs

17:14 PM, 10th November 2014, About 10 years ago

Reply to the comment left by "Annette Stone" at "10/11/2014 - 17:11":

annette, the mems and arts are prescribed by the legislation and i doubt that the wording you suggest was enforceable.

Nitzan

18:09 PM, 10th November 2014, About 10 years ago

My understanding, Joe is that the shares in the RTM are liked to the ownership of the unit. Therefore, one share per unit and one vote per share.

And, yes, as soon as one buys a unit in the building, one gets a share and a vote.

What I'm not clear on is the situation with the directorship. That's what I need to find out.

Joe Bloggs

18:22 PM, 10th November 2014, About 10 years ago

Reply to the comment left by "Nitzan Marinov" at "10/11/2014 - 18:09":

'My understanding, Joe is that the shares in the RTM are liked to the ownership of the unit. Therefore, one share per unit and one vote per share.'
REPLY - YES, THATS WHAT IM SAYING. ALTHOUGH ANNETTE IS SAYING SOMETHING COMPLETELY DIFFERENT!

'And, yes, as soon as one buys a unit in the building, one gets a share and a vote.'
REPLY - I DONT BELIEVE THAT IS CORRECT. I THINK THEY NEED TO FILL IN A FORM TO BECOME A MEMBER. IN FACT IM LOOKING AT SUCH A FORM RIGHT NOW, ALTHOUGH ANNETTE SEEMED TO SAY OTHERWISE.

'What I’m not clear on is the situation with the directorship. That’s what I need to find out.'
REPLY - YOU MUST READ THE RTM ARTICLES AND COMPANIES ACT 2006 S.168 ETC.
http://www.legislation.gov.uk/ukpga/2006/46/contents

All BankersAreBarstewards Smith

18:37 PM, 10th November 2014, About 10 years ago

if the rtm company is limited surely there are Articles of Association and the like... ?

These documents should spell out who runs the company and how they do it - how many meetings of directors must take place and over what time frame, how an EGM can be called, how new directors can be co-opted, as has been mentioned already, as a director it is your obligation to know about these things before taking on such a role. If it is a Limited com. could you apply to Companies house for copies of these vital documents ?

Nitzan

18:40 PM, 10th November 2014, About 10 years ago

Reply to the comment left by "All BankersAreBarstewards Smith" at "10/11/2014 - 18:37":

I'll have a look for them. If not, I'm sure we can get copies. I can also speak to the person who helped us form the RTM in the first place and find out from her (when she comes back from holiday).

David Atkins

10:44 AM, 15th November 2014, About 10 years ago

Joe Bloggs is correct, one share, one vote but the lease is still king. You need to become familiar with the lease as it sometimes stipulates how the RTM is to run. In one of the companies I run the lease states that one AGM must happen every year and it also states that directors can only serve for two years maximum before having a sabbatical. You need to check the lease.

David Atkins

12:06 PM, 15th November 2014, About 10 years ago

I would just like to add that if a shareholder is in arrears as to service charge then usually they are not entitled to vote. It should be written in the lease.

Nitzan

12:08 PM, 15th November 2014, About 10 years ago

Reply to the comment left by "David Atkins" at "15/11/2014 - 12:06":

Thanks, David. I will find out.

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