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 Gulliver

8:51 AM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by BernieWales at 31/08/2021 - 14:42Will you come back here and let us know what response you receive from Nigel Glen of ARMA? I'd be very curious to know what his view is of a situation such as this one.

by BernieWales

9:39 AM, 2nd September 2021, About 3 weeks ago

His view is that this is a rogue who should be stopped if possible. But the member of ARMA is ABC, not Richard Davidoff. There are remedies via the FTT, the County Court and if appropriate the police, which should be pursued. ARMA is aware and is investigating if anything can be done within its current systems and procedures - and if nothing meaningful can be done, then the systems and procedures will be reviewed to see what improvements can be made.

For the sake of clarity - those are my words, not Nigel's and not ARMA's. However, I am in almost daily contact and thus am aware of the concern and actions.

by Nick Hargrave

10:32 AM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by BernieWales at 02/09/2021 - 09:39
That's really helpful context - thanks Bernie.

For what it's worth, as a resident in an ABC controlled block, I have submitted a complaint to ARMA in relation to the Blackheath Road FTT case.

Although it is ABC that is a member of ARMA, not Davidoff, it is worth noting that Davidoff is their controlling shareholder and 'Managing Director' as per email signature. In the Blackheath Road FTT case, Davidoff and ABC appear to have been involved interchangeably in the situation also. So it would be laughable if ARMA are unable to take any action against ABC in this case.

by Gulliver

10:38 AM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by BernieWales at 02/09/2021 - 09:39Yes, it is ABC Block Management Limited that is the ARMA member. However the FTT decision report made it clear that the 'management agreement' that Richard Davidoff entered into with ABC Block Management Limited was merely a 'device' to subvert the FTT management order and breach the fiduciary duties. The FTT report also found that ABC Block Management Limited was one of the beneficiaries of this 'device'.
It should also be noted that the sole shareholder of ABC Block Management Limited is Richard/Raziel Davidoff. To my mind, if ARMA were to sanction ABC Block Management Limited, then this would go some way to sanctioning Richard/Raziel Davidoff.
In any case a company is an inanimate entity and cannot by itself subvert an FTT management order or breach fiduciary duties - it is only a company's Directors and Shareholders that can do that ...

by BernieWales

11:39 AM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by Nick Hargrave at 02/09/2021 - 10:32
And have you approached the FTT in respect of your specific property/case?

by Nick Hargrave

13:26 PM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by BernieWales at 02/09/2021 - 11:39
Yes - our block has 2 upcoming FTT cases against Mr Davidoff/entities related.

The first relates to service charges that we believe are unreasonable in previous. After purchase of flats, the freeholder resigned from one of the parties to our lease and Mr Davidoff took over - with ABC instructed as block managers. This puts residents in an invidious position.

The second is a RTM claim. We are getting there and have the requisite qualifications. Mr Davidoff (as one of the parties to our lease) has continued to object, despite the freeholder accepting the claim.

by Gulliver

13:38 PM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by Nick Hargrave at 02/09/2021 - 13:26Do you mean to say that you have a Residents' Management Company as a party to your lease?
If so, then it sounds as though the freeholder's intention was for the leaseholders to control the Residents' Management Company. I don't understand therefore why you have had to make a Right to Manage application unless Richard Davidoff has somehow hijacked your Residents Management Company? Please explain.

by Vivienne Somerville

13:55 PM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by Nick Hargrave at 02/09/2021 - 13:26I'm a bit confused. Is it Richard Davidoff that is named as a party in your lease or is it 'XYZ Residents' Management Company Ltd' that it is named as a party in your lease and Richard Davidoff happens to be the sole director of 'XYZ Residents' Management Company Ltd'?

by Nick Hargrave

13:57 PM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by Gulliver at 02/09/2021 - 13:38
Yes - Richard Davidoff took over as Director of our management company a few months after flats were sold.

When residents first asked to become members, he incorrectly told us that we were already members. When we probed further at a later date, he refused to acknowledge our request and changed the articles of association to become more favourable to his position.

He now claims in sworn court documents that he was following advice from the freeholder's solicitors - but has refused to specify who gave him this advice. It is obviously an area that deserves further attention.

by Vivienne Somerville

14:08 PM, 2nd September 2021, About 3 weeks ago

Reply to the comment left by Nick Hargrave at 02/09/2021 - 13:57Gotcha. There is a parallel discussion taking place on the Leasehold Knowledge Partnership (LKP) website. The LKP recently published an article on Richard Davidoff and ABC Estates. The LKP has direct links to c. 190 MPs and over 50,000 leaseholders. I am sure that the LKP and their readers would love to hear about the hijacking of your Residents' Management Company.
The link to the LKP article and comments is here:
https://www.leaseholdknowledge.com/richard-davidoff-of-abc-estates-breached-his-fiduciary-duties-after-disastrous-performance-as-a-court-appointed-manager-rules-property-tribunal/


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