FTT Appointed Manager in Doghouse. Now what?

FTT Appointed Manager in Doghouse. Now what?

9:42 AM, 23rd August 2021, About a month ago 76

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A friend has just forwarded me a copy of a recent service charge case where the First Tier Tribunal makes 5x references to the Appointed Manager subverting the management order and another 5x references to the Appointed Manager breaching his fiduciary duties. The report concludes that the Appointed Manager did this for his own financial gain.

I have highlighted in yellow the most relevant portions of the 35-page report: Click here to view the report. Some examples given in the report are:

1. Charging £93,000 for major works that should have cost no more than £25,000.
2. Entering into a ‘management agreement’ with his own daughter’s block management company – where he is the sole shareholder.
3. Granting major work contracts to companies that the Appointed Manager had an undeclared financial interest in – and denying the connections when explicitly questioned on the matter.
4. Transferring service charge and reserve fund monies into his own ‘non-trading’ company bank account – and denying any connection with the company when explicitly questioned on the matter.
5. Using leaseholders’ reserve fund contributions to offset the service charge arrears of the freeholder.

Although this Appointed Manager’s management order is at an end at this particular building, my friend informs me that the Appointed Manager is the First Tier Tribunal Appointed Manager at another 7 buildings; manages c.150 buildings through his daughter’s block management company – where he is the sole shareholder and continues to operate without a care in the world.

Is it me, or is there something wrong with this picture?

Paul



Comments

by BernieWales

10:51 AM, 1st September 2021, About 4 weeks ago

Reply to the comment left by Kim Ishola at 01/09/2021 - 10:13
Ahh, so you're prepared to slander ARMA on this public forum, but you're not prepared to share any evidence in public. Readers can judge your credibility accordingly.

by Gulliver

13:07 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by Kim Ishola at 01/09/2021 - 13:02Please start your own discussion so that this discussion can revert to considering the original subject matter - which is polling for responses on what is to be done with Richard Davidoff and ABC Estates whom the First Tier Tribunal has judged to have fallen far short of the standards for a professional managing agent - let alone one that is directly appointed by the First Tier Tribunal.

by Gulliver

13:23 PM, 1st September 2021, About 4 weeks ago

To get this discussion back on track:
As an immediate measure, since the FTT decision report makes so many references to Richard Davidoff's undeclared associations with various companies which resulted in service charge costs being inflated for Richard Davidoff's own financial gain, it would make sense to immediately strip Richard Davidoff of all his ongoing Tribunal Appointments. I believe there are 5 of these among the 150 buildings that he presently manages.
If this is not possible under present FTT powers, then Richard Davidoff should be asked to immediately resign from all his Tribunal appointments under threat of the FTT referring his activities to HMRC and/or the police. Let's face it, a referral to HMRC or the police from the FTT would hold far more weight than a referral from a single leaseholder. The FTT would be able to hand over a whole catalogue of examples - from a number of buildings where Richard Davidoff operates whereas a single leaseholder would only be able to speak about his/her own, individual building.

by Gulliver

13:37 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by Vivienne Somerville at 25/08/2021 - 16:57I agree that RoPA is not the solution. Although some form of independent regulation of managing agents would be welcomed by many leaseholders. In it's present form, RoPA disputes are meant to be settled by the First Tier Tribunal. Well, according to this FTT decision report, Richard Davidoff is already tearing up FTT management orders and doing whatever he likes so clearly the FTT holds no fear for him or others like him.
What is actually required is something akin to RoPA+++ e.g an independent regulator that is on a par with the Upper Tribunal in terms of authority. The Upper Tribunal has the same powers as a High Court, I believe?

by BernieWales

13:45 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by Gulliver at 01/09/2021 - 13:23
I agree with your sentiment, Gulliver. Unfortunately, the FTT does not have the power to proceed in such a proactive way. The system requires the relevant leaseholders to make an application in respect of their particular property. That appears to be a big flaw in the system.

And on the ARMA side ... the member there is ABC Block Management, not Richard Davidoff. Again, ARMA can only progress an investigation if a leaseholder (under ABC's management) complains - they cannot, for example, commence an investigation if I make a complaint and cite the same facts. (However, ARMA is aware and is currently fact-finding to see IF anything can be done pro-actively.)

It's all very unsatisfactory. But it is a clear demonstration that more should be done by Tribunals to thoroughly vet potential Managers before they are appointed - rather than just accepting whoever is presented before them, after some half-hearted vetting. There needs to be a rigorous examination of the proposed Manager's professionalism and experience ... to ensure only suitable property managers are appointed. AND there should be more thorough scrutiny of the ongoing management, with a thorough report produced by the Manager, together with accounts, which is thoroughly reviewed by the Tribunal and appropriate action taken if all is not as it should be. The problem though is 1) the Tribunal's remit doesn't extend to that level of scrutiny, and 2) there are not the resources nor funds to pay for it.

I know the President of HMCTS is looking at this sorry situation and she has been working on proposals for change. Let's hope that change comes sooner rather than later - and let's hope it gives the FTT the appropriate teeth to right wrongdoing.

by Gulliver

15:42 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by BernieWales at 01/09/2021 - 13:45
I believe that the FTT has a power to refer certain matters to the Upper Tribunal though and the Upper Tribunal has the same powers as a High Court. Surely this is a case deserving of that treatment? After all, the decision report stated that by the time of the hearing on 5th and 6th July, Richard Davidoff had still failed to produce the final accounts. I am sure that I came across an Upper Tribunal case decided in July 2021 - is it Norton? where the FTT referred similar failings of another FTT Appointed Manager to the Upper Tribunal....

by BernieWales

15:48 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by Gulliver at 01/09/2021 - 15:42
Yes, it was Norton ... a property in Torquay. An equally depressing read :-/

by Shreena Shah

16:09 PM, 1st September 2021, About 4 weeks ago

@Vivienne. Yes. If even in these circumstances authorities like ARLA do not use the rules of their membership to actually protect consumers, then what use are they?
@Bernie Wales. I agree that Richard Davidoff must be stopped.
The system also needs overhauling to stop managing agents with the inclination to exploit from slithering through gaping wide loopholes unchallenged. The system at present almost empowers those who understand all its shortcomings to commit systematic acts of negligence/fraud/ breach of contract as they repeatedly avoid accountability.
@Vivienne I have also heard of lettings agents taking large sums of cash as kickbacks to turn a blind eye and knowingly let properties on their roster out to criminals.
For my two properties, upon discovering that all the money taken as rent and deposits by ABC Estates was in Cash only for two properties with no bank account on file either, that neither deposit was placed in the TDS (despite written confirmation that it was) and with strong evidence to suggest that even the sparse references provided are fakes (just landlord and employer’s references – no bank statements, payslips or passport IDs), you can imagine my thoughts on the matter….
Richard Davidoff’s response? ‘Cash is legal tender’, ‘That is a landlord’s risk – not ours’, ‘We certainly were not aware of the requirements of your insurance company to get bank to bank transfers’. ‘The lettings team did the basic references…so fulfilled any due diligence they may have had’

by Christine Crowe

22:19 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by BernieWales at 23/08/2021 - 11:53
Unfortunately, Richard Davidoff has had many FTT cases against him from different parts of the country and I don’t think the different regions have any connection as they would be aware of his prior activities when these cases arise. The leaseholders of a group of flats, one of which I own suffered under his fraudulent activities and blatant lies for many years. We had two FTT cases against him and should have raised more, however the stress and significant amount of work this involved took its toll on many of the leaseholders. How could he continue year after year. He was laughing all the way to the bank and also at the system that made it so easy for him to get away with it. Very sad he was able to cause so much worry and stress to so many people and nobody really listened to the leaseholders 🥲

by Gulliver

22:29 PM, 1st September 2021, About 4 weeks ago

Reply to the comment left by BernieWales at 01/09/2021 - 15:48Unlike in the Richard Davidoff FTT decision report, in Suchorski & Ors v Norton UKUT 2021, there was no suggestion of profiteering on the part of the Appointed Manager.
The link to Suchorski & Ors v Norton is here:
https://www.bailii.org/uk/cases/UKUT/LC/2021/166.html


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