Leasehold & Management Agent - Please help!

JerKar

Hi there,

We are new to the MSE forums, so hello to all!

We have been searching in vain for someone who has found themselves in our situation, and with the excellent advice given on the MSE forums (I've been on here constantly the last couple of days), thought it would be an ideal time to post and get some advice!

We are first time buyers in a bit of a predicament and we would appreciate your guidance on this matter.

We had our offer on a flat accepted by the vendor way back in June of this year. We had a decent deposit; our mortgage had already been approved and quickly instructed our solicitor, so thought we were in a good position.

As it’s a leasehold property, we have been heavily reliant on the Management Agent providing the information required to both the vendors and our solicitor, and answering any outstanding enquiries that may arise. Now this is where the problems begin.

The Management Agent for the leasehold estate has not been very co-operative in answering these enquiries, on behalf of both the vendor and our solicitor. This is despite the vendor paying to provide this information. The initial standard set of queries were dealt with about 2 months back (even this took some time to get to us), however when our solicitor came back with some clarification on some queries and proof on others, the Agent has not replied. Much to the frustration of the vendor, he apparently paid a visit to the Agent and had a few hard words. This apparently didn't go down too well with the Agent, and his reply to the vendor was along the lines of: "I'll provide the information in my own good time now."

For at least 4-6 weeks, no-one had heard from this Agent. The Estate Agent had tried contacting him but to no avail, and neither ours or the vendor's solicitor had any joy, despite various e-mails, phone calls and letters.

To help re-mediate the situation, we thought we'd pay the Agent a personal visit, in the hope of defusing the hostility between him and the vendor, and expressing our desire to move. Unfortunately he wasn't available, but decided beforehand to write a letter and post it in this eventuality (he has a house on the estate).

About a week passed by, but behold and to our great surprise, he sent me and my other half a text message to say he had been away, had received our letter and was looking at answering our solicitors outstanding enquiries in the next few days. At that stage we thought there might be some light at the end of the tunnel.

About a month has passed since then and these enquiries have still not been answered. My other half has had a couple of brief conversations on the phone with the Management Agent, and he has assured us that these will be dealt with, and about a week ago he called her to say he had posted something and should reach our solicitor in the next couple of days. But of course, nothing has arrived yet.

We are still quite keen to get this completed, considering all of the time and money we've put into it. The property also meets all of our pre-requisites. Unfortunately, due to the numerous problems encountered over the past few months, the same can't be said of the vendor. We feel he doesn't think this can be resolved and has given up. Either that, or he has other ideas. Likewise the Estate Agent feels striking a deal is dead in the water. We have signed but are yet to exchange contracts, as our solicitor believes these queries are key ones that need addressing.

This leads us to the following:

(1) - Can 1 person (the Management Agent) have so much power in such scenarios? Apparently he has no assistant, or person above him that he reports to, so is essentially his 'own' boss. Is this normal?

(2) - Is there any way we can bypass the Management Agent to obtain the answers to our solicitor's outstanding enquiries? For instance, going directly to the owner(s) of the Freehold for the estate?

(3) - Can anything legally be done from our side to help force the situation?

(4) - If the seller decides to pull the plug on the deal, is there any way we can be compensated for the costs we have incurred so far (solicitor fees, surveys, searches, etc)? There wasn’t anything contractually arranged between us and the vendor when we had our offer accepted, so get the feeling we know the answer to this one.

Any help or advice would be greatly appreciated!

Many Thanks!

JerKar.

Doozergirl

Is this a block of flats? If so, from the basic enquiries which have been answered, how many properties are looked after in the building?

Who exactly is the managing agent and why do they live on the estate?

What queries are outstanding? It's entirely possible that the lack of answers is actually highlighting a problem itself.

The agent is definitely a problem that needs to be gotten rid of. He sounds like a dreadful pain and I would query his actions. If you were to buy this property I would insist on taking the Right to Manage away from this agent and employ your own with some standards. It's a bit hard to advise anything without some more info.

To force him to reply - I'm not sure how easy it is but perhaps the leasehold advisory service would be able to give some advice - any action probably needs to be taken by your vendor however!

Or go back to the guy's office with a bribe and the list of questions again He needs to be dealt with though if you go ahead - ie. sacked. If your vendor is unhappy then his neighbours are likely to be as well and they will co-operate.

Maria_Wilson

Do follow Doozergirl's advice at get in touch with the Leasehold Advisory Service. You can google them. Completely free service.

JerKar

Hi Doozergirl and Maria,


Thank you both for replying!


Doozergirl – its a Purpose built block, 8 flats in total, 3 stories high. There are about 150 properties on the entire Estate, and from our understanding, only 1 Management Agent. He works for a company called XXXXX Limited. Not sure why he lives on the Estate – I thought this was common to be honest.


There are a number of things outstanding, including whether the ground rent was paid and up-to-date, a copy of the buildings insurance (understandable, would have thought the vendor had a copy of this, but apparently not), audited accounts (3 years), Fire Risk Assessment and a copy of the Memorandum and Articles of Association.


We understand these things are important, but can this information only be obtained from the Management Agent? Is it not possible to gather this through other means?


Apparently this Agent has not been in place very long, and it was not long ago that the residents of the Estate went through a similar process to overthrow the previous company.


I did follow your advice and called the Leasehold Advisory Service this morning. They did offer some good advice, such as exploring other avenues in gathering the information and questioning the importance of some of the outstanding enquiries. However their speciality is Leasehold law and rights, and as we are not yet Leaseholders, they could only advise to a certain degree.


We’ve had further discussions with our solicitor and will decide what our plan is going forward. Like you said, alot is actually dependent on the vendor. I suppose he tried the hard-line approach with the Management Agent and had no joy, so has completely backed off. But that doesn’t appear to be helping either.


Is there anything legally his solicitor can do?


We may pay him another visit. Unfortunately we don’t have any feedback on how he is viewed within the Estate. It might just be a grudge against the vendor. Difficult to say.


Any further advice greatly appreciated!

JerKar.

SouthCoast

I know of a block of flats where the financial affairs of the management company are in a total mess. Money has gone missing, bailiffs were threatened for non payment of bills and the guy running the management committee has no financial experience.
Caveat Emptor.

Doozergirl

JerKar, if there is nothing that the vendor is prepared to do then I think you are onto a losing horse here.

If and when you do buy this property you are going to have to deal with this situation even if the documents are forthcoming. What you do not want is for this to happen to you

I was suggesting really that you asked the LAS if there was something that the vendor could do along the lines of threatening them with tribunal or perhaps mediation but this place is what has to be labelled a problem property with a problem that will not pass with you taking ownership. You must be prepared for a battle if and when you do take up ownership.

My own feeling is that if the vendor has given up then there really isn't anything much you can do. You can't get those documents from anywhere unless someone else has perhaps bought very recently and you start digging around for favours from them, but it doesn't solve the problem that the agent is either incompetant or a fraudster.

JerKar

Hi Doozergirl,

Thanks again for your advice!

You’re right – it’s probably back in the vendors hand to try and force the situation now. They were looking to go down the legal route a few weeks back, just prior to our intervention. We may suggest they proceed down that route now. We’ve tried the mediation approach over the past few weeks, and although we may have had an initial breakthrough, nothing has since materialised. It is quite frustrating why these things can’t get sorted. We are content with exploring every possible avenue though, as you may have gathered, and are prepared to fight to strike a deal! But we’ve noted your point about the problem not simply going away if we move and questioning the integrity of the Management Agent.

We’ll keep you all posted if there are any developments over the next couple of days. However with Xmas fast looming, there probably won’t be much to report on until the New Year.

JerKar.

Doozergirl

JerKar wrote: »

Hi Doozergirl,

Thanks again for your advice!

You’re right – it’s probably back in the vendors hand to try and force the situation now. They were looking to go down the legal route a few weeks back, just prior to our intervention. We may suggest they proceed down that route now. We’ve tried the mediation approach over the past few weeks, and although we may have had an initial breakthrough, nothing has since materialised. It is quite frustrating why these things can’t get sorted. We are content with exploring every possible avenue though, as you may have gathered, and are prepared to fight to strike a deal! But we’ve noted your point about the problem not simply going away if we move and questioning the integrity of the Management Agent.

We’ll keep you all posted if there are any developments over the next couple of days. However with Xmas fast looming, there probably won’t be much to report on until the New Year.

JerKar.

I salute your perseverence Good Luck with this - of course I hope it all comes good for you, if not, then that there is a much better place for you at a better price that comes along very soon

I'd love to know the outcome - it's always good when people come back and tell us what's happened - we get an end to the story

JerKar

Hi there,

Thought it would be good to update you all on this.

Following my chat with an adviser at LEASE, I decided to do some more investigation into the Management Agent. It transpires that the Residents Management Company that he works for has not submitted any end-of-year accounts at Companies House for the past few years, despite being registered as a limited company. Further to this, it appears that contact has been attempted by the Registrar very recently. A formal letter of request was sent but not acknowledged; therefore their current status at Companies House is "Active - Proposal to strike off." :eek:

Looking at the bigger picture, the reasons why our outstanding enquiries have not been answered begin to make sense. Those key enquiries were focused around the financials (3 year audited accounts, record of ground rent being paid, when, and how much, a copy of the buildings insurance, etc) amongst other things. It appears we have opened a whole new can of worms. Not necessarily for us, but I'm sure there may be stormy waters ahead for the current leaseholders, as we are not sure if anyone has questioned the validity of the Management Company or have any detailed breakdown of their service charges. Scary. We believe anyone with a leasehold property on this estate, with a half-decent solicitor acting on behalf of a buyer, will probably run into the same difficulties that we have encountered over the past few months. We can substantiate this as another current leaseholder on the Estate who had their property for sale up until very recently has mysteriously decided to rent out their flat instead. What is most surprising is that this has not been flagged up by anyone (i.e. Estate Agents, Leaseholders, Solicitors, etc) in the past. We do know however that no leasehold property has sold in that estate for the past couple of years. Whether this was due to inability to complete or no desire to sell is another question.

Luckily we spent the time finding out this information now than to be stung big time at a later date!

We have informed our Solicitor of our findings (remind me what we pay them for again?!) and are just awaiting their comments. Of course in the light of what has been uncovered you can rest assured we won't be pursuing this particular property, and will be back fresh on the market in 2010! The Estate Agent may or may not be surprised at learning this; either way we will be keeping coy with what we have unearthed!

I'd like to take this opportunity to wish you all a very prosperous New Year! :beer:

Best Regards,

JerKar.

Fire_Fox

JerKar wrote: »

What is most surprising is that this has not been flagged up by anyone (i.e. Estate Agents, Leaseholders, Solicitors, etc) in the past. We do know however that no leasehold property has sold in that estate for the past couple of years. Whether this was due to inability to complete or no desire to sell is another question.

Luckily we spent the time finding out this information now than to be stung big time at a later date!

We have informed our Solicitor of our findings (remind me what we pay them for again?!) and are just awaiting their comments. Of course in the light of what has been uncovered you can rest assured we won't be pursuing this particular property, and will be back fresh on the market in 2010! The Estate Agent may or may not be surprised at learning this; either way we will be keeping coy with what we have unearthed!

Thanks for the update! Please be clear with both the vendor and the estate agent exactly why you have pulled out. You could save the vendor or a future prospective purchaser going down the same time-consuming and expensive dead end that you have. Think of it as your good turn for the month!

Richard_Webster

From the posts on this thread it looks as if there is residents' management company where the residents have been content for this individual to run things because they cannot be bothered.

If one or two residents have concerns it can be very difficult to get enough people together to call a general meeting and remove the person concerned, because:
(a) Nobody else wants to the job; and
(b) Nobody wants to pay a professional managing agent to do the work on behalf of the management company.

Apathy rules and sometimes things get into this kind of state.

The only thing to do is walk away and if enough poeple do that enough of the residents will get the message and start to do something about it.