Service charge dispute (OM Property Management)

missile

Please advise how you managed to replace your management company?

propertyman

There are simple options

1: Statutory right to manage a no fault process

2: Collectively purchase the freehold either
- statutory right to enfranchise,or
- compulsory acquisition as a result of breach of covenant

3: Appointment of an independent manager at the LVT.

4: Appointment of new manager if the lease allows.

Details of this can be found at the government funded leasehold advisory service; lease-advice.org

And not following "offers" of assistance via PM on a long inactive thread by a newbie- I like to think people are kind but really!?...

missile

Newbie poster does not necessarily mean stupid. I was hoping to learn from someone who has actually gone through the process.

Thankyou for your simple options. In practice I do not believe it is that simple. Please be advised:
1. There are 109 properties in our development. The residents committee find it difficult to get a response let alone agreement from a majority of the owners.
2. Property is in Scotland, this does not apply.
3. Property is in Scotland, this does not apply.
4. It is a condition of the title deeds that

Proprietors may convene a meeting ..... a simple majority of the proprioters is required to dismiss or appoint a new Manager

http://www.scotland.gov.uk/Publications/2010/05/06171828/11

propman1

I own quite a few properties, and the biggest issue i have with running them is not the tenants it is the management companies. The first question i now ask is now the first question i ask when i look to buy a property is which management company run the site. I am on a bit of a crusade to deal with the issue at sites i own at and i am happy to share experience where appropriate but from experience I need to be careful about putting out too much public info, in addition the situation at each site is usually specific to that site.

Your right in general about the methods but it can be allot simpler to remove the company if you know a couple of facts about the site and its also best not to prepare the management company by shouting the specific info of the site in question on a public blog. It is important to first work out if there is local management company (usually a shell rather than an active company) set up by the builders for the site in question already. This is usually the case with modern developments. This company then subcontracts to one of the large companies that are often the cause of the leaseholders upset. Secondly if there is a local management company, have AGM's occurred in the past and are there local directors? It is important to spend time reading the details of the lease, although it is often quite confusing to most people who don’t deal with this regularly.

missile

Many thanks, I appreciate your candor and have sent a PM.

propertyman

missile wrote: »

Newbie poster does not necessarily mean stupid. I was hoping to learn from someone who has actually gone through the process.

Thankyou for your simple options. In practice I do not believe it is that simple. Please be advised:
1. There are 109 properties in our development. The residents committee find it difficult to get a response let alone agreement from a majority of the owners.
2. Property is in Scotland, this does not apply.
3. Property is in Scotland, this does not apply.
4. It is a condition of the title deeds that
http://www.scotland.gov.uk/Publications/2010/05/06171828/11

Well

1: I didn't say stupid. Happy to be proved wrong but I am sure you will get my point soon.

2: You didn't say it is in Scotland.

With 29 years experience in residential management and general practice specialising in the former ( and motivated a handful right through to 292 flat owners into RTE/RTM) I think I might have done it more than once...

Still good luck

propertyman

propman1 wrote: »

It is important to first work out if there is local management company (usually a shell rather than an active company) set up by the builders for the site in question already. This is usually the case with modern developments.

Nonsense. You are confusing party to the lease managers, party to the lease management companies, and cross ownership of leaseholds and freeholds. By their very nature the 2nd must be a small limited company or a company limited by guarentee.

missile

Hi Propertyman,

My appologies. I did not intend to misquote you or question your expertise. I am happy to listen, but I would not blindly follow advice proffered on an internet forum.

In some respects it is simpler in Scotland as the properties are freehold.

I am very interested to know how you managed to motivate 292 flat owners?

propman1

Hi propertyman
I guess i must be laying scent on your tree. I am not intending to enter into a stick measuring competition, i am trying to offer constructive practical help in simple terms as the situation with management companies has got out of control in recent years. We both seem to have experience in the area and the more constructive advice around will help to improve the landscape and will hopefully eventually have an impact on the practices of such companies. I know of landlords on the verge of bankruptcy due to the high costs incurred through block management, whist personally my investments across a range of properties in different parts of the country have been significantly affected by common causes related to management of the sites and accounts.

I tried to put my point across about the management structure for most new developments (over the last 10 years or so) in words that can generally be understood by people that own such property. In most cases where this is the situation, right to manage is an unnecessary protraction as effectively the structure has already been put in place by the builders and the owners just need to take control of it. In some cases management companies have effectively hid this potential route of empowering the owners by setting up alternative comities and residents groups but have avoided holding AGMs of the local management company which can dismiss them as managing agents and/or appoint directors with the power to dismiss them. We don’t need to complicate things with legal jargon etc, the point is as the first thing to look at, does a different limited company name appear on the lease (or other documents) as the management company rather than the management company that bills are received from. The name of this company is often taken from the road name or the marketing name of the development when the block was first built. Service charge bills may also state that they are on behalf of the local management company and details in the lease may say that a local management company will be set up on behalf of the owners, it may also then say that the day to day management will be subcontracted to another company which may be one of the large national companies such as Peverel OM.

For freehold blocks, the power certainly exists with the owners but obviously getting enough support can be difficult against apathy. The specific definitions in the title deeds are important- is it a majority of owners or a majority of owners attending a meeting in which a vote may take place. In either case are proxy votes allowable? Generally in all cases getting support in the landlord community is a key part as dropping notes through letterboxes doesn’t usually reach them. Enlisting the help of key local lettings agents helps as they may be willing to forward letters or e-mails. You will generally find that there are a small number of landlords that own significant numbers in a block- if they are on your side, which they often are when the issues affect their investments, you can quickly reach the required majority.