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

20:24 PM, 10th September 2021, About 2 weeks ago

Reply to the comment left by Gulliver at 10/09/2021 - 20:06To the list of third party agencies above in @BernieWales' article e.g. ARMA, IRPM and the FTT, we must also add the PRS. The PRS states that in terms of block management, they can only act prior to court or tribunal action being taken and they can only act against matters of poor service or rudeness on the part of the managing agent. The PRS states that once a court or tribunal judgment has been obtained, they can have no further involvement. This is grossly unhelpful since the managing agent's use of the PRS, IRPM and ARMA logo gives said managing agent some semblance of respectability. We must remember the fact that Richard Davidoff presently has another c. 5 FTT Appointed Manager positions and manages c. 150 buildings - where (quite probably) similar conduct is taking place.
The bottom line is that if you are not part of the solution, you are part of the problem. The FTT, IRPM, ARMA and the PRS would do well to remember that.
I commenced this discussion with the words 'Now what'? in the title as a means of signalling that something further needs to be done about Richard Davidoff by someone, anyone, everyone. Richard Davidoff cannot simply be let off the hook with a damning decision report .....

by Gulliver

9:57 AM, 12th September 2021, About 2 weeks ago

Reply to the comment left by BernieWales at 10/09/2021 - 13:41
The FTT has powers to attach weighty penal notices to management orders and has done so before in circumstances where the terms of a management order have been or are in very real danger of being subverted. The following cases are examples where the FTT has attached penal notices to management orders. The penal notices in these examples are against a group of leaseholders and a freeholder though. I can find no example of the FTT ever having attached a penal notice against a Tribunal Appointed Manager.

See para 51
https://assets.publishing.service.gov.uk/media/5ddd5e12ed915d0177cee001/Ditton_Place_Decision_April.pdf

See para 1
https://decisions.lease-advice.org//app/uploads/decisions/act85/12001-13000/12368.pdf

In the latter example, the penal notice reads:

IF YOU THE WITHIN NAMED RESPONDENT CONSTANTINE BATIN DO NOT COMPLY WITH THIS ORDER YOU MAY BE HELD TO BE IN CONTEMPT OF THIS TRIBUNAL AND IMPRISONED OR FINED, OR YOUR ASSETS MAYBE SEIZED.

Why has the FTT never attached a similarly worded penal notice against Richard Davidoff?

by BernieWales

9:53 AM, 13th September 2021, About 2 weeks ago

Reply to the comment left by Gulliver at 10/09/2021 - 20:24
To be clear - my email correspondence indicates that HMCTS (for FTT), ARMA and IRPM are all investigating the Richard Davidoff situation ... although that is taking time. They are therefore trying to be part of the solution, not the problem.

by Gulliver

21:23 PM, 13th September 2021, About 2 weeks ago

Reply to the comment left by BernieWales at 10/09/2021 - 13:41
Sincere apologies @BernieWales – I have only just realised that my cut and paste of your article was truncated and the 2nd half of the article you posted on your own website is missing from this forum. For the benefit of contributors to this forum, here is the 2nd half of @BernieWales’ article:

Furthermore, with Regulation of Property Agents (RoPA) on the near horizon – there should be a specific specialism of FTT appointed Manager … pre-vetted by HMCTS and ARMA/IRPM … from whom Tribunals can choose potential managers. This would assist professionalism in this arena and minimise a clueless leaseholder nominating a potential crook or rogue … nominating to a Tribunal panel who will take insufficient time and trouble to fully scrutinise the professional credentials and history of the nominated individual.

But of course, life would be better if Tribunals did have a sufficiently wide remit to fully scrutinise – or have a pool of pre-vetted professionals to choose from. Thus I have suggested to Siobhan McGrath, President of the FTT, the following shopping list:
1. Tribunal members need educating about property management. They are experts at law – and include an expert valuer where required – but rarely do I see expert property management knowledge sitting in judgement. Perhaps ARMA+IRPM could liaise with HMCTS on that?
2. Potential managers should be ‘pre-vetted’ for expertise, perhaps via ARMA+IRPM, so that only competent managers are proposed and then appointed. Some sort of publicly accessible list should be available, from which leaseholders can choose who to ask (although it would be better if leaseholders did not initiate the selection process).
3. Whilst there may be a Management Order ‘template’ covering the legal side of things, which the Tribunal can ‘tweak’ as required – I think it is vital that the prospective manager prepares the property management side of things – and that should be discussed between Manager and Tribunal until an agreement is reached. No manager should have an Order thrust upon him – and he/she should not accept such an appointment.
4. Following on from the above, there should be a mandatory financial and practical report and vetting process, regularly throughout the appointment. Appointed managers should provide a reasonably detailed six monthly or annual report to the Tribunal – and should be held to account, by the Tribunal, where the management “issues” are not being progressed in accordance with the Management Order expectations.

But am I a madman? Are my views out of step with ARMA members, IRPM members and Tribunal appointed Managers … 99.99999% of whom are hard-working, professional, highly trained, and working to improve the lives of leaseholders and residents in blocks of flats?

To find out whether my view was isolated and at odds with fellow property managers, I emailed some of them. I’m pleased to report I’m not mad (or the people I contacted are equally mad). On the whole, they support the changes I’ve outlined above.

But “you would say that, wouldn’t you Bernie” … I hear you say.

Well, dear cynical reader … I’ve publicised this article LinkedIn, Facebook, Twitter and appropriate property manager hangouts … with a request that property managers add their comments below. Hopefully, they will … and hopefully, you’ll see those at the coal face of these issues, commenting in support or disagreement.

by Gulliver

21:56 PM, 13th September 2021, About 2 weeks ago

Reply to the comment left by Gulliver at 13/09/2021 - 21:23Responding to the 2nd half of @BernieWales' article, I would say:
It is true that it is leaseholders that have to nominate an individual to be an Appointed Manager and then it is up to the FTT to approve the individual as Appointed Manager. I accept that this could be a flaw in the system – not because leaseholders are ‘clueless’ as you imply, @BernieWales, but simply because there isn’t enough joined up thinking or sharing of data that would enable leaseholders to know whether the individual they intend to nominate is a crook or not.
In the Blackheath Road FTT case the leaseholders appear to have taken all the precautions that they could have taken. In nominating Richard Davidoff, the leaseholders selected an IRPM member that had prior engagements as a Tribunal appointed manager. Richard Davidoff's company (ABC Block Management Limited) was both a PRS and ARMA member that managed c. 150 buildings and (on the face of it, at least) the company had plenty of 5 star Google reviews and a PR budget large enough to pay for an LBC radio and TV campaign.
Speaking of which, who is going to break the news to poor Larry? Watch the ABC Estates block management TV advert below:
https://www.youtube.com/watch?v=mRHZWfNwvY4

by Vivienne Somerville

8:03 AM, 14th September 2021, About 2 weeks ago

Reply to the comment left by BernieWales at 10/09/2021 - 13:41@BernieWales, judging from the content of your article, you are clearly offended by Richard Davidoff's unprofessional conduct, as reported in the Blackheath Road FTT case where Richard Davidoff was a Tribunal Appointed Manager.
From the wide-ranging contributions to this discussion, it appears that Richard Davidoff's unprofessional conduct is not limited to Richard Davidoff's Tribunal Appointed Manager work but also spans work where his various companies are merely the managing agent or letting agent.

I don't believe that you have posted your article on the Linkedin Institute of Residential Property Managers (IRPM) page? It would be very interesting to see how your fellow IRPM members respond to it.

by BernieWales

8:23 AM, 14th September 2021, About 2 weeks ago

Reply to the comment left by Vivienne Somerville at 14/09/2021 - 08:03
@Vivienne Somerville ... I have messaged IRPM and ARMA and property managers generally, requesting that they comment. Surprisingly - and disappointingly - I am deafened by the silence.

by Vivienne Somerville

11:07 AM, 14th September 2021, About 2 weeks ago

Reply to the comment left by BernieWales at 14/09/2021 - 08:23In my opinion, the 'deafening silence' of IRPM and ARMA property managers is very telling.
It suggests that perhaps IRPM and ARMA property managers are not as surprised or as disappointed as you appear to be by Richard Davidoff's conduct.
If IRPM and ARMA property managers were as surprised and as disappointed as you appear to be then IRPM and ARMA property managers would have rushed to openly disapprove of Richard Davidoff's conduct - much in the same way that your article argues that the FTT, IRPM and ARMA should.
The IRPM and ARMA property managers might even have applied some pressure on the FTT, IRPM and ARMA to boot out Richard Davidoff and ABC Block Management Limited because they are disgracing the property management industry and letting the side down.

by BernieWales

10:23 AM, 15th September 2021, About 2 weeks ago

Reply to the comment left by Vivienne Somerville at 14/09/2021 - 11:07
I can't argue with that Vivienne. The other explanation is that "it's just Bernie moaning again" and IRPM/ARMA members don't wish to be seen to be supporting me in complaining. Who knows? Either way - it is disappointing :-/

by BernieWales

10:49 AM, 15th September 2021, About 2 weeks ago

Reply to the comment left by Gulliver at 13/09/2021 - 21:56
"Clueless" can also imply a lack of clues to be found ... as might have been the case here at the material time.

In order to help prevent this sort of thing happening again, I think there are three improvements which could be made:
1) Training for Tribunal members about property management with particular regard to troubled buildings. (ARMA/IRPM could provide for HMCTS?) And education about the content of management orders.
2) A database of pre-vetted, experienced property managers who are willing to be nominated. (The proposed RoPA system might help there.)
3) Education and resources for leaseholders in troubled buildings ... a) so they understand the leasehold system better, and b) so they know the various routes to change troubled managements/buildings. (ARMA/IRPM could expand their current offerings and provide further training resources.)


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