Problems with Right To Manage companies and paying for works?

Problems with Right To Manage companies and paying for works?

11:05 AM, 30th March 2021, About 3 years ago 4

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My company owns the freehold of a block of 18 flats and also owns one of the flats. An RTM Company took over the management of the block about 12 years ago, just after we had served s.20 notices about forthcoming works.

Since that time the RTM has not undertaken necessary repairs and the block is now suffering! About two years ago they realised that this couldn’t continue & they served new s.20 notices for “some” of the previously needed works. Then they called for a meeting of all leaseholders, at which they discussed their inability to enforce proceedings for payment of contributions.

I think that was more to do with the fact that the existing leases don’t enable recovery of the costs associated with enforcing recovery. Since then, absolutely nothing has happened.

We are now endeavouring to become directors of the RTM Company, to take back control of the failing management regime.

In doing this, that doesn’t necessarily mean that people will pay their contributions. Without collecting all the money, we wouldn’t be able to let a contract for the required works!

It seems that some leaseholders can’t afford their contributions, but they also realise how poor the building has become!

Has anybody on here experienced similar problems and if so, how did you deal with them?

I hope someone can help here.

Many thanks – Barry

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Happy Landlord

9:34 AM, 31st March 2021, About 3 years ago

Hi Barry
That is exactly why you should appoint a good block management company - we operate a block management company and are regularly asked to sort out similar situations. There are legal ways around this in almost all cases but it can be difficult and sometimes unpleasant particularly if you are on good social terms with the other leaseholders. I suggest even though it will cost you money as a group, you source a good agent to help you in this situation the cost involved will more than repay itself.
Happy Landlord.

Mandy Thomson

9:47 AM, 31st March 2021, About 3 years ago

If those leaseholders have mortgages you could write to their lenders but if the lenders agree to pay this is likely to have a negative impact on the leaseholders' credit files so should only be done as a last resort.
I would suggest offering the LHs payment plans so they can pay the additional costs by instalment.
If the leaseholders are on low incomes, it might be worth seeing if the local authority might provide a grant or loan, if the works will have a direct impact on the LHs' living accommodation.


10:58 AM, 31st March 2021, About 3 years ago

The freeholder has a right to be a member of the RTMCo. That's written into the RTM provisions of the Commonhold & Leasehold Reform Act 2002. But in your shoes, I wouldn't go down that route as clearly the RTM is not working.

You could have the RTMCo dissolved, as it is not performing its duties. Then the management would revert back to the freeholder.

Probably better in terms of success would be to apply to the First-tier Tribunal (Property Chamber) for the appointment of a Manager ... who would have the ability to enforce payment of service charges via his/her Management Order, rather than via the terms of the Lease.

I can help if you wish. Bernie Wales

terry sullivan

13:44 PM, 31st March 2021, About 3 years ago

Reply to the comment left by Mandy Thomson at 31/03/2021 - 09:47
just writing to mortgagors may jolt lessees into action--i did this for ground rent arrears and lessees paid--however it was less than £1000 in total

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