Freehold Managing Agent Refuses to Handover Records

by Readers Question

18:43 PM, 27th November 2013
About 7 years ago

Freehold Managing Agent Refuses to Handover Records

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Freehold Managing Agent Refuses to Handover Records

I have become involved in a dispute with Freehold Managing Agents and seek advice from 118 readers.

The base of the scenario is a residential housing estate where each property owner is a shareholder in the Management Company, it is a mix of private and landlord owned houses. The Management Company is responsible for maintaining the communal areas of the estate. The Management Company has, via its Director and Company Secretary appointed a Managing Agent. The Managing Agent has been responsible for issuing the invoices for the service charge and preparing the accounts etc. Which should all be very standard.

However, the Managing Agent has just informed the shareholders the current Director’s tenure is at an end and new Directors must be appointed to avoid the company being ‘struck off’. In addition, they claim they are owed fees & wish to resign. The Managing Agent has stated that they will not handover any records or documentation until said fees are settled. Freehold Managing Agent Refuses to Handover Records

Can a Managing Agent legally retain company documents, bank statements and accounts, belonging to it’s client?

Do documents prepared by the Agent i.e database of shareholder payments belong to the Agent or the Company?

If the Management Company has no funds to pay the Agent because the Agent has failed to collect or pursue the monies due, are they in breach of their contract?

At present it is unclear what information the Director and Company Secretary have, although this is being pursued.

How do the shareholders move forward?

Any advice would be greatly appreciated.

Many thanks.

Ann


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Comments

Neil Gammie

19:20 PM, 27th November 2013
About 7 years ago

Hi Ann - I'm slightly puzzled here. Did you appoint the managing agent or did you inherit them from a previous freehold owner. If you appointed them then you will have agreed an annual service charge fee and so you should know where you stand regarding any outstanding fees owed to them? If they have failed to collect the service charge from lessees, including their own fee, then they are in breach of contract with you, their employer. If you appointed them then they are your agent and cannot withhold relevant documents from you. I don't understand where they say director's tenure is 'at an end' - company directors remain so until they resign - presumably the company is registered at Companies House? You need to find out whether the agent is a member of RICS or ARLA to ensure any monies collected on your behalf are kept in a separate client account - sounds like you need legal advice PDQ.

Don Holmes

21:05 PM, 27th November 2013
About 7 years ago

Hi I am a managing agent and have been for 25 years and have seen this situation before, in the first place Ltd Companies are obliged to hold an AGM at which the directors and or Co secretary would either be re-appointed or resign after which new company officers would be appointed. Problem is in theses situations NO one wants the responsibility, particularly if they live in as they get nagged to death by the others.

Second, it is always best practice to have a signed set of T's & C's so whether you have appointed the MA or adopted them there should be an agreement in place to which both parties should stick to, but to suggest the MA is in breech of contract for none collection is in the first place naive and the second wrong, Why, because the MA is trying to collect from the employer (the block owners) so second if they the owners AKA employers, are not paying how can he the MA be in breech?

Third, If you are owed money, legal due and held a position of strength would you not do the same and refuse to surrender that position? Of course what they can do is lodge all the "goodies" with his solicitor and inform the company they have
adopted a legal lien.

I make no comment about if the agent is a member of any trade association other than to say, this suggest formal complaint and when you openly admit the company has no money to pay, what do you have to complain about its the companies at fault!

Now advice:- An agent will normally always want to maintain the instruction AKA the income and there must have been a decent relationship at some point, so very often the best way to deal with this festering issue is for some one to "man up" and propose a meeting to discuss and air each others views and seek a compromise not always possible if both sides encamp.

Proposal, might be to extend the management term month by month, reducing the work load and the agent being paid subject to performance month by month with a small uplift to reduce the debt after which all sides part company amicably.

Final issue you have no money readily available to pay fees? you will not get legal aid so who is going to pay the fight costs which could prove substantive "Its good to talk" !

Ann

17:19 PM, 3rd December 2013
About 7 years ago

It is a situation I have literally just become involved with, so have not been party to anything previously agreed, which has just coincided with the MA issuing a letter to shareholders. The current Director agreed to undertake the role for 12 months & wishes to/has resign, I do not know if Companies House has been informed of this yet. There is an agreed service charge payable to the MA, not certain if there is a contract but it would appear no funds to pay this. Although I am not clear why there isn't any funds, it is currently unclear if the MA has pursued any of the householders who have not paid, as is part of his contract. Hence, the question on breach of contract, the grounds for complaint/non payment being no work = no pay. The MA is not a member of any association.
There has not been an AGM in the last 12 months, the MA will not arrange one now. Copies of documents, including accounts have been requested but haven't been provided yet. I would just like to get as much information/advice on the situation & what the shareholders can do before attempting a meeting. If the current Management Company is struck off, it may be simpler to start again, if this is an option.
.


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