"Management Company"

TELLIT01

Genuinely asking this for a friend, and I will simply input his question below.

"I am one of 4 houses on a new build.  There is a management company that was set up to manage the small private new road.

None of us wanted the management company but the builder's solicitor was insistent, though it was indeed possible to have an easier option of each house owning a quarter of the road, but the solicitor would not budge.

There is no money involved, just the responsibility of the secretary to file the annual report.

The secretary is an elderly lady, recently widowed, and it stresses her out and makes her so anxious she has sleepness nights over the company.

Can she just resign the role?  None of the other households are willing to take on the role, and it's unfair she should have to worry.

If she resigns, how would she do this?  Would she simply right to the solicitor saying that she will no longer do the role?

Does that mean the management company would fold, and if so what are the ramifications?"

All the properties are owned by people close to, or beyond, retirement age. They would all be very appreciative of any help or advice.

Thanks.

Ectophile

The company wouldn't fold just because their acountant has resigned.  But if it didn't produce accounts, the company would get into trouble.   Either somebody would have to step in to do it, or the company would have to pay an accountant to do it.

You don't actually say who owns the road.  That may make a difference as to whether or not it is possible to voluntarily wind up the company.

TELLIT01

Thanks Ecophile.  I'll ask and post the reply here.

TELLIT01

The management company is entirely composed of the 4 property owners, no involvement from any external 3rd party.  This is a development of 4 houses in a small cul-de-sac. 

naf123

I would have thought , if all 4 property owners are directors of the management company , it's possible to get an external person appointed as a secretary at a small cost to oversee it .I stress small cost ...like £250 a year . And make sure the contract between you and this external person allows the directors to terminate etc .  One of the property management companies might do it but it's so small and hardly profit making . Maybe a local estate agent that looks after several rentals could do the role . 

stragglebod

Why would the developer pay legal costs to set up a company that does nothing? If the company does nothing, how does the road get maintained?

naf123

Maybe a "company" is a way to show who owns the road - is there a title deed for the road itself? Maybe the title deeds show each house and a part of the road belonging to the house?

TELLIT01

Thanks for the feedback.  I'll ask the questions and get back with the answers.

TELLIT01

Latest response:-  "A question our Solicitor was perplexed by too, as the management company was unnecessary. But the builders sol insisted.  There is no maintenance on the road, but if it deteriorates the management company says costs to be split 4 ways.

No deed for the road, it only shows on the title deeds for the 4 houses"

If they are the only parties involved could they just agree to wind up the management company and put a simple agreement on maintenance of the road in place through their own solicitor (my question).

Ectophile

So it's a maintenance company that's not doing any maintenance on a road it doesn't own?  But I assume that the intention is that the company will do any maintenance when required.

If you simply want to wind up the company, you may need to get legal advice, as there may be some clause in the deeds requiring a company to maintain the road.

Otherwise, find another volunteer or pay someone to do the accounts.

TELLIT01

Thanks Ectophile.  The more 'information' that comes through about this setup, the less sense it seems to make - and it didn't make much sense in the first place!  Why my friend, or any other others involved, hasn't simply gone the route of speaking to a solicitor is beyond me too.  I'll pass on this on and try to step back.  Thanks to everybody who has tried to make sense of this.

I'm no legal beagle, but would have thought that a simple legal document drawn up and agreed by all parties, that the owner of each property is liable for 1/4 of the cost of any repair/maintenance work would cover it.