How do I relinquish a management role

How do I relinquish a management role

12:53 PM, 3rd January 2015, About 9 years ago 18

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I am currently the director of a small block of 6x flats in a limited company and my wife is the Secretary, we have held these positions for 7 years now and it is time for a change as apathy has set in amongst the other owners.

I have run the company well and there are no issues to worry about(other than a little bit of maintenance owed to the company) and we are solvent, but as I said its time for a change and nobody will take the reigns.

We are all leasehold but we each have a 1/6 share of the freehold of the building. We own a flat within the building and don’t wish to sell (unless to an investor) as we have a really nice tenant. I would be obliged for any advice or further questions.

Also a flat within the building is currently being sold, but I am being stalled by the sellers conveyancer as to the potential buyer as I feel it important that he is made fully aware of our impending decision, and it may be that this new purchaser might wish to run the company. I have been told that we must have a director in place even if its run by an outside company, but to be honest I have had enough.

What are my options please

Grahammanager


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Comments

Neal Craven

14:00 PM, 5th January 2015, About 9 years ago

Reply to the comment left by "Colin Dartnell" at "05/01/2015 - 13:54":

Agreed

Graham Durkin

14:00 PM, 5th January 2015, About 9 years ago

Thankyou r01,I believe we as individual owners have been issued with a share certificate makes us an allotted owners of the freehold.As to winding up the company ,as stated previously it was formed to oversee all our interests in the building with a proportionate share of the running costs,if it folds we then would be on our own to arrange insurance /repairs ,and I could see bigger problems arising from that course.

I like the idea of paying myself a large renumeration for my efforts ,but it has always been my duty to use our funds wisely as we keep our contributions to a minimum ,thereby not just ploughing it in to look good,this also in turn may well attract future buyers as our maintenance is low compared to other local blocks.

Graham Durkin

14:10 PM, 5th January 2015, About 9 years ago

Neal , the building is in Portland Dorset,DT5 2JE, my flat is currently on a site for sale but i don,t want this to be seen as advertising ,just to help you find the building.

Graham Durkin

14:27 PM, 5th January 2015, About 9 years ago

Colin, I always remind myself that the lender has FIRSTcharge on the property until I have paid it off. most of us B.T.L Investors are usually on interest only mortgages.If the lender became aware that his interest in the property has changed significantly would that give him cause for concern,how he finds out i don,t know

I really appreciate those that have placed a comment so far ,it opens up my options . I would look to sell ,but a good mortgage at the moment,good tenant ,not the greatest selling price leads me to stay put ,but if push comes to shove you never know .I shouldn,t complain i,m sure there is somebody in a worse position than me

Portland has some nice flats with a good return, but not many investors at the moment

Neal Craven

14:35 PM, 5th January 2015, About 9 years ago

All the best, its a bit far for us to administer but if I can assist on an ad hock basis please let me know.

PS £30.00 per month for service charge, insurance and ground rents seems very cheep, I would normally anticipate the managing agents costs alone could easily be £20.00

Graham Durkin

15:01 PM, 5th January 2015, About 9 years ago

Neal,
Our fee to the company of £30 per mth has been since I set it up in 2007,this covers Insurance,grasscutting ,ground rent,repairs / Improvements.communal lighting

Are you saying you think their fee would be £20 per month per flat would be roughly it plus running costs.but do we still have to provide a DIRECTOR IN POST. many thanks for your comments and advice.

r01

15:38 PM, 5th January 2015, About 9 years ago

Reply to the comment left by "graham durkin" at "05/01/2015 - 14:00":

Graham, My suggestion of a huge salary was (as I'm sure you grasped) just an attempt to think out of the box to grab the attention of and action from the other shared freeholders.

If the company was just set up to represent the interests of the owners and you do the work, accepting full responsibility without payment they are simply taking you & your good lady for mugs, so I suggest you really should be paying yourselves adequately and the other owners should expect this unless they would prefer to work for free in your place, which they are clearly not and is probably why you are in the predicament you are. If it were me, I would be putting these exact points forcefully to them without delay.

If the company does not hold the freehold but was simply set up to serve the interests of the owners then you can write to all the shareholders stating that unless another shareholder steps forward to take over the company, or appoint an alternative Director and Secretary, your resignation will leave the company without a recorded Director and therefore be unable to trade, in which case the assets will be distributed amongst the shareholders in equal amounts before your resignation, following which you, as Managing Director will apply to have the company voluntarily struck off (which takes approx. 3 months and costs nothing). This then resolves your problem (if they don't like it the solution is in their own hands) and you can then (as an owner), arrange a separate "owners" meeting to discuss and agree which management company to appoint to manage the block.

Just be firm or it could go on forever - good luck.

R

Neal Craven

16:01 PM, 5th January 2015, About 9 years ago

The positions of company offices (Director and secretary) are different to those of the building management.
I assume the building (freehold) is owned by the limited company, the company is owned by the shareholders, who also happen to be the flat long leaseholders. The company is run by its offices and the way the company is run will be set out in the articles of association and this is where you should look for your options.
The management of the property is a separate issue and the company will probably be able to appoint someone to manage the block, the way the building is managed and the expenses/fees that are recoverable will be set out in the leases.
Is your concern with the management of the company or the building?
If it’s the latter, assuming the lease allows for the recovery of the agent’s fees the easiest option is to appoint a managing agent; if it was local to me I would be looking at a fee in the region of £1,500 p.a. (i.e. the £20 per flat month approx.)
If it’s the former you would need to see if it’s something the managing agent will also take on however there will be an additional fee for that service

I think £30.00 is very reasonable (the ground rent must be minimal), I have been doing some benchmarking over Christmas on a portfolio we are just about to take over and I have found the costs in similar blocks, excluding ground rent, to be as follows
Cost per flat per month
External cleaning and maintenance £6.00 to £6.50
Internal cleaning and maintenance £12.00 to £15.00
Electricity £3.50 to £4.00
Contingency £6.25 to £10.50
Reserve fund £9.00 to £10.50
Insurance £9.00 to £10.50
TOTAL SAY £45.00 to £55.00
Plus
Accountancy fees TBA
Property management fees TBA
Directors & offices costs TBA

I don’t know how this compares to others experience.

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