Managing Agent has run off with the money

PAAJ

I am a leaseholder (don't own in whole or in part the freehold) in a block of flats. All the leaseholders were asked to contribute an amount towards the cost of repair/maintenance of the building above and beyond the usual service charge. The management company appear to have run off with the money and the freeholder has engaged a new management company. The monies paid was apparently ringfenced but appears to have disappeared. The freeholder is claiming it has nothing to do with him. Can this be right? Surely the management company is instructed/employed by the freeholder and if the management company has run off with the money it must still be the freholder's responsibility to either carry out the works or reimbure the leaseholders?

RHemmings

I am not a lawyer, and this is not legal advice. 

But, I believe that in this situation you are correct that it is the freeholder's responsibility to carry out the works or reimburse the leaseholders. 

I also believe that the freeholder remains responsible for the maintenance of the building, and has to make good any shortfall if the managing agent has absconded with the necessary money. The freeholder would then have to chase the managing agent themself. 

Finally, I also believe that this situation can be challenged at a property tribunal. This would come under:

https://www.lease-advice.org/advice-guide/application-first-tier-tribunal-property-chamber/

• disputes about who is responsible for paying a service charge, an administration charge or an estate management scheme charge, and whether the charge is reasonable;

because you (the leaseholders) have already paid it. And if the freeholder now says you need to pay again for the repairs to be made. 

However, all of the above applies to the normal situation whereby the freeholder appointed the managing agent, and that managing agent functions as the agent of the freeholder. If there is anything weird in the setup, such as the leaseholders choosing and appointing the agent, then things could be different. I'm also only familiar with the situation in England. Things may, or may not, be different in other parts of the UK. 

There is a thread here: https://forums.moneysavingexpert.com/discussion/6476505/managing-agent-run-off-with-money-who-is-liable-for-outstanding-debt/p1   but I'm not sure that I agree with everything posted there. 

EDIT: To be more clear about what I disagree with in the thread, it's because I don't believe that there is just one party with the responsibility to carry out the repairs. The freeholder is, I believe, responsible to the leaseholders to carry out the repair. The managing agent, having received payment, is responsible to the freeholder to carry out the repair. But, that isn't the business of the leaseholders (OP). Note frequent use of the word 'believe' and the 'I am not a lawyer' disclaimer.