One Right to Manage Company for a Development with two Blocks

by Readers Question

18:36 PM, 16th March 2016
About 3 years ago

One Right to Manage Company for a Development with two Blocks

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One Right to Manage Company for a Development with two Blocks

I am one of the two Directors in a Right To Manage (RTM) company created in 2008 after suffering for several years under the Freehold Landlord’s (FH L/L) appointed management companies, which had managed to turn a brand new development into a much-neglected site from 2005 to 2008. The current managing agents were employed for a short period by the FH L/L, but terminated their contract due to some dispute with the FH L/L. A new company SEPS Ltd was appointed, but they hardly performed and did not even prepare the year-end accounts.two

The property to which the RTM company relates consists of two blocks of ten (10) and six (6) flats, respectively, i.e., total of 16 flats, and a public road separates the two blocks.

We had been receiving consolidated budget estimates and Accounts for the respective years ending 30 June from 2005 to 2007, i.e., the budgets and the accounts were consolidated for the entire two blocks for each respective year from the FH Landlord’s managing agents.

The current managing agents carried out the entire process of RTM for the development in June 2008 and the site has been maintained to a reasonable standard since then.

The current management company had carried on with preparing consolidated accounts until a couple of years ago when they started preparing separate accounts for each block accompanied by a set of consolidated accounts.

Late 2014, the FH was bought by an offshore company that appointed HomeGround as their managing agents, with whom we had problems already discussed in the earlier forum. Luckily due to our RTM in place, we only pay Ground Rent to HomeGround.

We have recently been puzzled after learning of the “Triplerose Ltd v 90 Broomfield Road RTM Co Ltd [2015] EWCA Civ 282 case, where the Court of Appeal has decided in a landmark decision that a Right to Manage company can only acquire the right to manage one building at a time – 21/04/2015.”

We have since taken up the matter with our managing agents, who claim to be the second largest in the UK, for their opinion with regards to our set-up as there is only one RTM company for the two separate blocks. They have advised us to get independent legal advice in the matter. We are of the opinion that the managing agents should have been aware of this issue and dealt with the matter correctly at the time of forming the RTM company.

We do not think that any of the Lessees’ are aware of this issue or would have any objection to continue as we are under a single company and also that we are now already receiving individual block accounts. We are of the opinion that the Lessees are quite comfortable with the current standard of services being provided as none of them have ever attended any of the AGM since the formation of the RTM company in 2008.

Comments and/or advice would be greatly appreciated.

Ashok



Comments

Gary Nock

19:38 PM, 16th March 2016
About 3 years ago

Ashok this question is puzzling many legal minds. RTMs with multiple blocks were allowed until Triplerose. Now nobody knows what will happen to them given this ruling.Are they legal? Illegal? Keep an eye on the Leasehold Advisory Service Website and the RTM Federation. Sorry can't give you anything more at the moment. It's one hell of a mess.

Gary Nock

19:43 PM, 16th March 2016
About 3 years ago

And forgot to mention Ashok - thenruling came after RTMs were applying for RTM or had got it - so your managing agents could not have retrospectively seen it coming.

Ashok Babber

13:00 PM, 17th March 2016
About 3 years ago

Hi Gary. Many thanks for your comments.

- Do you think it is worth consulting a solicitor or are you of the opinion that legal professional may not be able to help mitigating any potential litigation from the FH L/L or Lessees? or

- should we carry on as normal and face the music when/if someone complains?

Perhaps you can recommend some professional lawyer who may be able to help. Your comments would be greatly appreciated.

Gary Nock

14:08 PM, 17th March 2016
About 3 years ago

Hi Ashok. Great talking with you today. As we discussed it's very unclear at the moment. Might be an idea to contact the Right To Manage Federation who may assist http://www.rtmf.org.uk


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