Directors bypassed S20 stage two and three and refuse all communication

m0bov

Our directors have bypassed the stage 2 and 3 and refuse to answer any questions put to them. They have also refused to show any accounting information that relates to the works.

Is there a process I can use to firstly find out the cost of the works? Then, as I suspect a "stitch up", find out who did the work and who else if any, quoted?

I even tried to ask in writing at the AGM and it was binned.

eddddy

m0bov said:

Is there a process I can use to firstly find out the cost of the works? Then, as I suspect a "stitch up", find out who did the work and who else if any, quoted?

The standard approach would be to wait until you get a Service Charge bill (or maybe you already have it) and challenge the bill at a tribunal.

• If the tribunal agrees that the section 20 consultation was not carried out correctly - they will cap the bill at £250

• If the tribunal decides that the section 20 consultation was carried out correctly - but the final cost is not reasonable, they will rule on what a reasonable cost should be

The threat of tribunal would often scare the freeholders into disclosing more info to you. But if they don't they'd have to show it to you before the tribunal hearing anyway.


But it's usually best to pay the Service Charge bill under protest anyway. If you end up losing at tribunal, that will usually reduce the costs you have to pay.

m0bov

Hi thanks for the quick reply. I believe its going to cost £100 to challenge it, if I win do I get that refunded do you know?

Also, sorry can you explain how to pay under protest and how it will reduce my costs? Thanks ever so much for the help.

eddddy

m0bov said:

Hi thanks for the quick reply. I believe its going to cost £100 to challenge it, if I win do I get that refunded do you know?

Yes - the losing party generally has to pay the winning party their £100.

m0bov said:

Also, sorry can you explain how to pay under protest... 

For example... when you pay, you could send an email saying "I do not think that the amount demanded is reasonable, therefore I am paying under protest."

If you want, you can add "I am planning to challenge the amount demanded at a tribunal."

And you can also add an explanation of your reasons.

m0bov said:

and how it will reduce my costs?

If you don't pay at all, this is what many freeholders would do...

• After a while, send you a reminder letter - and charge you about £40 for sending the letter
• After a while longer, send you another reminder letter - and charge you about £40 for sending the letter
• After a while longer, instruct a solicitor  - and charge you the solicitor's fee of a few hundred pounds 
• After a while longer, the solicitor could start legal proceedings  - and charge you the solicitor's fee of maybe £1000+

If you win at tribunal, you won't have to pay any of the above. But if you lose, you would have to pay all of the above.


Conversely, if you pay under protest...

• The freeholder won't send you reminder letters, or instruct solicitors, or start legal proceedings 

If you win at tribunal - you'll get some/all of your payment back. But if you lose they'll be no fees to pay for reminder letters, solicitors, legal proceedings.

m0bov

Makes sense! I'll try that.

RHemmings

I can't comment on the legal aspects and the processes, but the whole thing sounds 'well dodgy' to me.