Managing Agent run off with money. Who is liable for outstanding debt?

deegee1971

I'm doing some research for my partner, who is an owner occupier in a block of apartments.

The Managing Agent has disappeared, owing various contractors for work completed (lift repairs, roof etc).
A solicitor has advised that the residents are liable for the outstanding debt, but surely those contractors should be chasing the Managing Agent, not the residents?

MultiFuelBurner

Outstanding debt will be chased through to whoever is liable and still around to get money out of.

Have you (all together) sought legal advice on this matter?

deegee1971

MultiFuelBurner said:

Outstanding debt will be chased through to whoever is liable and still around to get money out of.

Have you (all together) sought legal advice on this matter?

Thanks for your reply. One of the other residents has sought legal advice.

I guess that's my question - who is liable? The residents had already paid the managing agent for the works, they just hadn't paid the contractors, and have absconded with the cash. Police are involved, but why should all the residents pay twice?

MultiFuelBurner

I would seek your own advice as well. Out of interest how much are you individually potentially liable for?

propertyrental

If the MA was acting as the freeholders' 'agent' ( sounds like you all jointly own the freehold?), and instructed the contractors on the freeholders' behalf, then the freeholders remain liable for the debt to the contractors.

If the MA was responsible for the work, and instructed the contractors accordingly, then the MA is responsible for the debt.

Clearly a muddy situation and legal advice needed to determine which applies.

Do you or other joint freeholders have any legal cover?

user1977

If the agents are genuinely merely agents for you, and they contracted on your behalf with the contractors, then the contractors are entitled to be paid by you. If your agents held your money, unfortunately that's your problem.

DullGreyGuy

Are they a leaseholder or freeholder?

eddddy

deegee1971 said:

I'm doing some research for my partner, who is an owner occupier in a block of apartments.

The Managing Agent has disappeared, owing various contractors for work completed (lift repairs, roof etc).
A solicitor has advised that the residents are liable for the outstanding debt, but surely those contractors should be chasing the Managing Agent, not the residents?

The key question is... Whose name is on the contracts with the contractors?

That's the 'entity' who the contractors should be chasing.

For example, is the name on the contracts...

• The Managing Agent
• A 3rd Party freeholder
• A freehold company (which the leaseholders own shares in)
• Individual leaseholder(s) name(s)
• or something else?

Edit to add...

Whose solicitor has advised that the 'residents' are liable. And tbh, I very much doubt the solicitor said 'residents'.

But perhaps the solicitor said 'Joint freeholders' or 'Leaseholders'. And what reason did the solicitor give?

deegee1971

eddddy said:

deegee1971 said:

I'm doing some research for my partner, who is an owner occupier in a block of apartments.

The Managing Agent has disappeared, owing various contractors for work completed (lift repairs, roof etc).
A solicitor has advised that the residents are liable for the outstanding debt, but surely those contractors should be chasing the Managing Agent, not the residents?

The key question is... Whose name is on the contracts with the contractors?

That's the 'entity' who the contractors should be chasing.

For example, is the name on the contracts...

• The Managing Agent
• A 3rd Party freeholder
• A freehold company (which the leaseholders own shares in)
• Individual leaseholder(s) name(s)
• or something else?

Edit to add...

Whose solicitor has advised that the 'residents' are liable. And tbh, I very much doubt the solicitor said 'residents'.

But perhaps the solicitor said 'Joint freeholders' or 'Leaseholders'. And what reason did the solicitor give?

That's very helpful. 
I've just found out that she pays annual ground rent. So I presume this means it isn't shared freehold?
Will try to find out whose name is on the contacts

user1977

deegee1971 said:

eddddy said:

deegee1971 said:

I'm doing some research for my partner, who is an owner occupier in a block of apartments.

The Managing Agent has disappeared, owing various contractors for work completed (lift repairs, roof etc).
A solicitor has advised that the residents are liable for the outstanding debt, but surely those contractors should be chasing the Managing Agent, not the residents?

The key question is... Whose name is on the contracts with the contractors?

That's the 'entity' who the contractors should be chasing.

For example, is the name on the contracts...

• The Managing Agent
• A 3rd Party freeholder
• A freehold company (which the leaseholders own shares in)
• Individual leaseholder(s) name(s)
• or something else?

Edit to add...

Whose solicitor has advised that the 'residents' are liable. And tbh, I very much doubt the solicitor said 'residents'.

But perhaps the solicitor said 'Joint freeholders' or 'Leaseholders'. And what reason did the solicitor give?

I've just found out that she pays annual ground rent. So I presume this means it isn't shared freehold?

Not necessarily, it depends who owns the freehold.

propertyrental

deegee1971 said:

eddddy said:

deegee1971 said:

I'm doing some research for my partner, who is an owner occupier in a block of apartments.

The Managing Agent has disappeared, owing various contractors for work completed (lift repairs, roof etc).
A solicitor has advised that the residents are liable for the outstanding debt, but surely those contractors should be chasing the Managing Agent, not the residents?

The key question is... Whose name is on the contracts with the contractors?

That's the 'entity' who the contractors should be chasing.

For example, is the name on the contracts...

• The Managing Agent
• A 3rd Party freeholder
• A freehold company (which the leaseholders own shares in)
• Individual leaseholder(s) name(s)
• or something else?

Edit to add...

Whose solicitor has advised that the 'residents' are liable. And tbh, I very much doubt the solicitor said 'residents'.

But perhaps the solicitor said 'Joint freeholders' or 'Leaseholders'. And what reason did the solicitor give?

That's very helpful. 
I've just found out that she pays annual ground rent. So I presume this means it isn't shared freehold?
Will try to find out whose name is on the contacts

That does not follow.

Could easily be that she owns both the lease to her flat (for which ground rent is payable) and also a share of the freehold.