Legal implications of being an unpaid director in a management company for a block of flats

spiritus

I've been a director of a management company for a block of flats (approx 24 one bed flats).

We employ a managing agent and I assumed that they would have some level of legal responsibility to ensure health and safety regulations are complied with.

We are all volunteers and unpaid, which is why we employed a specialist block management company to run this for us.

Following a rather suspect Fire Risk Assessment a few years ago where the agent told us the blocks were compliant but upon inspection the assessor had assumed certain things and was waiting for the agent to confirm, I now feel the agent is pushing potential legal responsibilites onto the toes of the directors.

I understand directors are ultimately responsible but I thought managing agents were considered to be the "responsible person" assigned in terms of health and safety.

Does anyone have any experience or knowledge of this area?

subjecttocontract

I've been in the same position as you as a director of a property management company. We had 96 properties and employed an Agent, who were a firm of Chartered Surveyors who specialised in this type of work. Their expertise in buildings maintenance, housing & company law was invaluable. We had regular meetings throughout the year to discuss and agree work required and an annual AGM which was attended by the directors (approx 6) and a representative of the Agent. We worked together & never had any unsolvable issues.

Being a director is voluntary, so if you're not comfortable with the responsibility just resign and someone else will likely be along to take your place.

If you have questions about your fire risk assessment, talk with the assessors, your block management company, the fire service etc.......you'll find they will  answer any questions.I

I'm not sure from your post what other problems you have.

spiritus

subjecttocontract said:

I've been in the same position as you as a director of a property management company. We had 96 properties and employed an Agent, who were a firm of Chartered Surveyors who specialised in this type of work. Their expertise in buildings maintenance, housing & company law was invaluable. We had regular meetings throughout the year to discuss and agree work required and an annual AGM which was attended by the directors (approx 6) and a representative of the Agent. We worked together & never had any unsolvable issues.

Being a director is voluntary, so if you're not comfortable with the responsibility just resign and someone else will likely be along to take your place.

If you have questions about your fire risk assessment, talk with the assessors, your block management company, the fire service etc.......you'll find they will  answer any questions.I

I'm not sure from your post what other problems you have.

The responsibility I do not mind. The liability is what I have a problem with.

I agree that a specialist agent's knowledge is invaluable but what if they make a mistake or are inefficient or just lazy?

As directors, are we liable for their mistakes and oversights?

If us, as directors, are having to manage the managing agents then what's the point?

We have spoken to the agents about the FRA's. They told us we were compliant but upon receipt of the actual assessment, the assessor has made assumptions about some inaccessible areas (at the time) and asked for confirmation from the agents about certain conditions being met.

The agents never got back to the assessor as those conditions (we now learn) were not met at the time. The agents told the directors that the buldings were compliant when in reality they weren't.

This was two years ago. If a fire would have broken out then god only knows what might have happened.

subjecttocontract

Interestingly when I was a director of our property management company we had a FRA carried out following the Grenfell Tower tradegy in London. My understanding is that it's the responsibility of everyone to read, understand and act on its recommendations and requirements. Leaving it up to your Agent & assuming everything was done as required isn't really good enough. It sounds like none of your directors asked the necessary questions or chased the Agent for answers for the past 2 years. That doesn't sound very good to me and not what I'd expect from people in that position.

itsthelittlethings

If you’re unpaid and don’t live in the block why do it? If you live in the block I think you’ve got bigger fish to fry than “liability”.

spiritus

subjecttocontract said:

Interestingly when I was a director of our property management company we had a FRA carried out following the Grenfell Tower tradegy in London. My understanding is that it's the responsibility of everyone to read, understand and act on its recommendations and requirements. Leaving it up to your Agent & assuming everything was done as required isn't really good enough. It sounds like none of your directors asked the necessary questions or chased the Agent for answers for the past 2 years. That doesn't sound very good to me and not what I'd expect from people in that position.

It is very common for management company directors to employ a managing agent to deal with these matters.

In nearly, all cases, directors are simply laymen, with no knowledge or experience of dealing with legislation, compliance etc. For this reason, block management agencies exist. 

We did not "assume everything was done as required". The block management agency TOLD us everything was done as required-that's a big difference.

To be honest, you make it sound very flippant when you said the right questions weren't asked but you either trust a qualified agent to be doing the right things or you live in a constant state of paranoia that anything they tell you may not be correct or truthful.

spiritus

itsthelittlethings said:

If you’re unpaid and don’t live in the block why do it? If you live in the block I think you’ve got bigger fish to fry than “liability”.

Because we own two of the flats on the estate

SarahB16

spiritus said:

subjecttocontract said:

I've been in the same position as you as a director of a property management company. We had 96 properties and employed an Agent, who were a firm of Chartered Surveyors who specialised in this type of work. Their expertise in buildings maintenance, housing & company law was invaluable. We had regular meetings throughout the year to discuss and agree work required and an annual AGM which was attended by the directors (approx 6) and a representative of the Agent. We worked together & never had any unsolvable issues.

Being a director is voluntary, so if you're not comfortable with the responsibility just resign and someone else will likely be along to take your place.

If you have questions about your fire risk assessment, talk with the assessors, your block management company, the fire service etc.......you'll find they will  answer any questions.I

I'm not sure from your post what other problems you have.

The responsibility I do not mind. The liability is what I have a problem with.

I agree that a specialist agent's knowledge is invaluable but what if they make a mistake or are inefficient or just lazy?

As directors, are we liable for their mistakes and oversights?

You would take out directors' liability insurance. 

subjecttocontract

spiritus said:

subjecttocontract said:

Interestingly when I was a director of our property management company we had a FRA carried out following the Grenfell Tower tradegy in London. My understanding is that it's the responsibility of everyone to read, understand and act on its recommendations and requirements. Leaving it up to your Agent & assuming everything was done as required isn't really good enough. It sounds like none of your directors asked the necessary questions or chased the Agent for answers for the past 2 years. That doesn't sound very good to me and not what I'd expect from people in that position.

It is very common for management company directors to employ a managing agent to deal with these matters.

In nearly, all cases, directors are simply laymen, with no knowledge or experience of dealing with legislation, compliance etc. For this reason, block management agencies exist. 

We did not "assume everything was done as required". The block management agency TOLD us everything was done as required-that's a big difference.

To be honest, you make it sound very flippant when you said the right questions weren't asked but you either trust a qualified agent to be doing the right things or you live in a constant state of paranoia that anything they tell you may not be correct or truthful.

Just because you are told something is ok that doesn't mean the end of it. I would, at least expect to ask for a copy of the report so all the directors could read through it (ours was 36 pages long) and ask any questions. It appears your directors didn't do that and as a consequence it's taken 2 years to discover things are not right. There is nothing flippant in suggesting that's an oversight on your part and you & your fellow directors must carry some blame for those failings.

spiritus

subjecttocontract said:

spiritus said:

subjecttocontract said:

Interestingly when I was a director of our property management company we had a FRA carried out following the Grenfell Tower tradegy in London. My understanding is that it's the responsibility of everyone to read, understand and act on its recommendations and requirements. Leaving it up to your Agent & assuming everything was done as required isn't really good enough. It sounds like none of your directors asked the necessary questions or chased the Agent for answers for the past 2 years. That doesn't sound very good to me and not what I'd expect from people in that position.

It is very common for management company directors to employ a managing agent to deal with these matters.

In nearly, all cases, directors are simply laymen, with no knowledge or experience of dealing with legislation, compliance etc. For this reason, block management agencies exist. 

We did not "assume everything was done as required". The block management agency TOLD us everything was done as required-that's a big difference.

To be honest, you make it sound very flippant when you said the right questions weren't asked but you either trust a qualified agent to be doing the right things or you live in a constant state of paranoia that anything they tell you may not be correct or truthful.

Just because you are told something is ok that doesn't mean the end of it. I would, at least expect to ask for a copy of the report so all the directors could read through it (ours was 36 pages long) and ask any questions. It appears your directors didn't do that and as a consequence it's taken 2 years to discover things are not right. There is nothing flippant in suggesting that's an oversight on your part and you & your fellow directors must carry some blame for those failings.

Right and do YOU know all the necessary fire and safety regulations required or did you rely on your managing agent to tell you?

If the report was 36 pages long or 336 pages long, that is irrelevant. Unless you are completely au fait with every piece of legislation then you will not know if anything has been missed our or not.

subjecttocontract

I think you're missing the whole point. You & your fellow directors don't need to know all the 'necessary fire & safety regulations required'......like me, you have experts to deal with that for you. The assessors (assuming they were suitably qualified )will be responsible for the report and your block management would be expected to deal with the results. But as directors its incumbent on you to read the report, understand it and follow up on it's requirements and recommendations, otherwise what's the point of having directors.  Being a director requires you to apply common sense and due diligence among other things.