Running your own flat management company

Fire_Fox

purt wrote: »

Can I hijack this thread to ask a related question? I'm in the process of buying a leasehold flat and have found out that the other leaseholders have a right to manage agreement in place. There are seven flats in total and only four of those have a share in the management company that was set up. The flat I'm buying doesn't have a share in the company.

My question is, if I buy the flat/leasehold, can I buy into the arrangement and do I have any entitlement to do so? Also, are there any actual benefits of being part of the arrangement beyond having a say in how the property is managed?

Have you read the article on the LEASE website? Also have you run a search? If nothing there hopefully someone here will respond, otherwise telephone LEASE, they really are superb and the service is free. :cool:

purt

Fire_Fox wrote: »

Have you read the article on the LEASE website? Also have you run a search? If nothing there hopefully someone here will respond, otherwise telephone LEASE, they really are superb and the service is free. :cool:

I have looked at the website, yes, but can't find an answer to my specific question. I'll give a call tomorrow though - thanks.

propertyman

purt wrote: »

My question is, if I buy the flat/leasehold, can I buy into the arrangement and do I have any entitlement to do so? Also, are there any actual benefits of being part of the arrangement beyond having a say in how the property is managed?

As long as you are an owner of a flat you are entitled to apply for membership, and as the RTM CO is asset less, it's just a manager, there is no cost.

However there is no right to require you to admit them, the presumption is that as a residents led group, the " more the merrier". The author of the Act clearly never experienced residential block politics :eek:

As to the advantages the principle one is that you take part in the decision making process , the down side is that it may involve you in some work time and effort, and if you become a director the potential for liability if you do not comply with the myriad of issues that many small property RTMs are unaware of or believe should not apply to them..

Clueless8

Hi, I've posted here instead of starting a new link as you all seem so clued up!! I bought a leasehold flat in 2005 and now want to sell as its become a financial burden. The bad news ....I've just found out the management company was struck off in 2007, the freehold return to the state and it's going to cost £3000 to get a new management company registered (not sure any of this terminology is right!). Anyway, I've been looking back over the paperwork of the house purchase. The 'company director' as listed on the paperwork was not living at his address in the terrace when I moved in so I'm confused as to how the sale went through successfully. The secretary signed the notice of transfer (she is still living there and apparently says she doesn't have a clue what she's supposed to be doing/have done). I haven't been issued with a membership certificate and the vendor has written that share of management company N/A in my sale paperwork. I have had nothing to do with the management company since I bought but am being told now that each household should have a share? What I want to know really is do I have any come back via my original solicitors? Any help would be appreciated as theugly alternative is to declare bankruptcy which I'd prefer to avoid. Thanks.

propertyman

:eek:
recycle the book its woefully out of date. Company law and landlord and tenant law have changed substantially since then.

:money:The #1 mistake is forgetting that your company is bound by the leases to each flat and the law that governs them, landlord and tenant law, which has little to do with company law.
Companies cannot agree by a majority to do something when they are bound by the lease and what it says eg
-matters on expenditure such as consultation for major works, or
issue rules "voted at the AGM" that set out to, but cannot change, the lease, such as stopping subletting when the lease says an owner can or,
-billing as and when the lease has a clear structure on how to bill and when and if you don’t, you wont be able to get it back in court.
They are binding contracts between the company and the leaseholder, even if they are a shareholder or member of the company.

The company is the landlord so references to the LL refers to you and you will find info and help here
http://www.landlordzone.co.uk/forums/forumdisplay.php?11-Long-Leasehold-Questions
http://www.lease-advice.org/publications/
http://arma.org.uk/leasehold-library

tomcroll

I'm in the opposite position to the original poster and have been managing my shared freehold for 9 years.

I submit the accounts.
I submit the annual returns
I negotiate and pay for the buildings insurance.
I deal with all tradesmen
Worst of all, I have to deal with everybody's problems and get nothing but abuse for trying to be fair and balanced. This means that each time one freeholder doesn't get entirely their own way, they hold it against you. This will probably happen with each and every one of them in time.

You'll end up doing all the work and get nothing but blame when anything goes wrong.

I've had to pay tradesmen out of my own pocket many times in order to fix emergency water leaks and make emergency repairs because the buy-to-let landlords never want to pay for anything.

You may also have to mediate between and deal with people who suffer from serious personality disorders. People who simply can't be reasoned with.

This has been the most stressful and thankless role I have ever undertaken, so I would offer the following advice.

Unless you are a solicitor, I would recommend that you appoint an impartial legal authority (solicitor or reputable agent) to deal with the running of the company. There is a lot of competition out there, so being able to choose one puts you in a very strong position. They can deal with legal disputes between landlords and you can still submit accounts and annual returns yourself - that process takes all of 10 minutes once set up.

I'm currently looking for a suitable company to take over this role, so if anyone can recommend one, I'd be grateful.

Otherwise, I will update once I find one.

Good luck whatever you try to do, and make sure you understand what you're getting yourself into.