Managing agent out of control - Advice needed

mehrgeld

Our building was previously managed by a managing agent on behalf of the freeholder. For the purposes of this post let's call them PK.

We were unhappy with the service provided so we took the opportunity to apply for the Right to Manage. This was duly granted and now we as leaseholders manage the property.

This was effective as of the end of last year. The building insurance expired in February so we renewed it.

Now comes the fun part. Unbeknown to us PK took out an insurance policy on the property AFTER official management had passed to our Right to Manage company.

Even more fun they are now asking us to pay for this insurance policy! Can they do this? What are our options for resolving this issue?

pararct

mehrgeld wrote: »

Our building was previously managed by a managing agent on behalf of the freeholder. For the purposes of this post let's call them PK.

We were unhappy with the service provided so we took the opportunity to apply for the Right to Manage. This was duly granted and now we as leaseholders manage the property.

This was effective as of the end of last year. The building insurance expired in February so we renewed it.

Now comes the fun part. Unbeknown to us PK took out an insurance policy on the property AFTER official management had passed to our Right to Manage company.

Even more fun they are now asking us to pay for this insurance policy! Can they do this? What are our options for resolving this issue?

Did you have legal representation for the change?

Has the free holder agreed to the change and what documentation exists to prove the change?

If everything is above board and the I's are dotted and the T's crossed refer PK to the agreement you have regarding official management.

BitterAndTwisted

Are you sure that you acquired adequate insurance? Usually this is the sort of charge which the freeholder would acquire and pass on to the leaseholders. Unless you have acquired the freehold along with your Right To Manage

mehrgeld

Thanks for the reply. We went through the RTM process through a solicitor. The formal handover took place at the end of the year and the free holder was invited to become part of the company so they are aware of the situation.

I suspect we may have to formally get them involved to reiterate the position. Our legal representative has not met our expectations in handling this so we may have to look elsewhere.

mehrgeld

BitterAndTwisted wrote: »

They can ask you to pay but at far as I can see you have absolutely no obligation to pay it. They have made an error due to their own inefficiency and are now trying to get someone else to pay for that error. Thank them for their attention but as they appear to have applied for insurance for a property they do not manage, and for a property which is also adequately insured already you have no intention of reimbursing them.

Our insurance policy was cheaper than theirs as well! Surely you can't insure a property that you have no legal claim on!

They are trying to take the money they think we owe them out of our reserve fund (the previously paid service charge). This money should be transferred to us as the new managing agents.

mehrgeld

BitterAndTwisted wrote: »

Are you sure that you acquired adequate insurance? Usually this is the sort of charge which the freeholder would acquire and pass on to the leaseholders. Unless you have acquired the freehold along with your Right To Manage

When we got the insurance we used the same information that was provided in the previous policy. As managing agents we manage our property on behalf of the freeholder in the same way PK were.

BitterAndTwisted

Looks like the agents thought they were still acting on behalf of the freeholder then. Perhaps they still are but should only be collecting ground-rents. Perhaps they have made an error and will have to cover this expense themselves. What a shame

G_M

It's a simple question. Either as you say "The formal handover took place at the end of the year" in which case you write to the company, enclosing the relevant documents, decline to re-imburse them for their error and insist on any funds they still hold are transferred to you.
Or the 'handover' did not take place, or was legally defective, in which case you lodge an interna complaint with your solicitor, and if that fails then a formal complaint.