The residents of Quadrangle House in Stratford east London last week chose a number of directors for their right to manage company.
They were seeking to end the anomaly that the only director has been Dudley Joiner, owner of Team Property Management, which manages the site.
His Right To Manage Federation, which is not a federation but a commercial RTM facilitator, took Quadrangle House to right to manage in 2010.
Two residents also sat on the board of Quadrangle RTM, but they sold their properties this year leaving Mr Joiner, who is not a leaseholder, as the sole director as well as the property manager.
Matters have gone seriously awry with the Quadrangle House RTM to the point that it only has around 36 members in a site of 102 flats (The Quadrangle, Onyx Mews and Topaz House).
The RTM members meeting on November 25 was to choose new directors. Although only 23/24 individuals attended, this represented two thirds of the right to manage membership.
It was immediately disputed whether the members could elect new directors at the meeting, as they believed was their right, or simply offer names who would be nominated directors by Mr Joiner.
He argued that as no notice for a resolution was given – which under the Companies Act would allow those unable to attend to vote by proxy – the new directors would have to be appointed by him, as the sole remaining director.
However, Mr Joiner declined to appoint directors who were withholding service charges.
Writing to LKP, he said: “Seven new directors were nominated and it was agreed at the meeting that these persons would be appointed to the board subject to the caveat that they should not be in breach of their leases or in arrears of service charge.
“I am advised that two of the nominees are in serious arrears of service charge and on that basis will not be appointed.”
It would appear that Quadrangle RTM therefore has five new directors who will meet with Mr Joiner on December 8.
Hopefully this will be the start a harmonious new chapter in the management of Quadrangle House.
The unsatisfactory situation of Mr Joiner being the sole director has now ended, but it is urgently required that the residents now breathe life into their RTM.
Decisions affecting 102 leaseholders are being taken by a meeting of 20-odd people, and the membership of only around 36 members of the RTM is not desirable.
It is, of course, a concern that Mr Joiner is still a director of the Quadrangle House RTM, four years after he took the site right to manage with his RTMF hat on, as well as owning the appointed property management company, Team.
The conflict of interest here is obvious.
However, given the feeble leaseholder input and the reluctance of a fair number of them to pay service charges, this unfortunate situation may have come about owing to circumstances rather than design.
Furthermore, Mr Joiner has only been the sole director since September, when the last leaseholder director sold up.
The bottom line for residents is that if Quadrangle House RTM cannot sort itself out, the site might be better off seeking a court appointed managing agent.
That would be an admission of failure at a site where the leaseholders are empowered.
It must be acknowledged that Mr Joiner’s RTMF has done a lot of good by taking around 250 sites through the right to manage process. About 70 of these have been retirement sites.
(LKP has criticised Mr Joiner for seeking to take to the Court of Appeal – with all the risks involved – the failed RTM application for Elim Court, a retirement site in Plymouth.)
It is a further frustration to Mr Joiner that his nemesis Joseph Gurvits, of rival Y & Y Property Management, – from whom the RTMF has liberated a number of sites in property tribunal clashes – is being kept informed of the situation at Quadrangle House and attended a meeting with the residents.
Indeed, Mr Gurvits has accused LKP of hypocrisy in not reporting the problems at Quadrangle House as it does not demonstrate a successful example of right to manage.
As this is the second article we have published on the Stratford site, that is obviously without grounds.
The best course for the leaseholders of Quadrangle House is to introduce transparency, acknowledge past errors and start sorting them out. Primarily, by signing up new RTM members.
The standard RTM Mem and Arts say there must be two directors in place “to make any decison” and so how has Mr Joiner been running the company?
All very odd.
Fortunately for the long suffering leaseholders, they now have the option of using the mediation service offered by the Leaseholder Association.
I can’t remember who is behind the association. Doubtless someone will remind me!
It is good that the leaseholders are now taking an interest in the running of their building that is how it should be and no doubt the main reason behind the RTM in the first instance.
A Quad Leaseholder
Insider is incorrect. An RTM Company is no different to any other private company. It only needs one director. However it is accepted this is not ideal.
In reply to the last post, Quadrangle leaseholders are not ‘suffering’. They were under Peverel when nothing was done. As explained in an earlier post, the leaseholders currently ‘complaining’ are for the most part owners that have large service charge arrears. It is not in the interests of leaseholders as a whole for the Quadrangle to be controlled by individuals who are in blatant breach of their lease.
As the CMA have just reported, RTM does work and most RTM estates have a higher satisfaction rate. Our objective is to achieve this outocme for the Quadrangle House.
It looks as if a large number of leaseholders at Quadrangle have been a bit silly. Having gone to all the effort of starting an RTM it seems far too many have sat back and let others get on with the work.
The only people hurt by those who are not paying service charges are themselves and their fellow leaseholders. The agent can only ever work with the money that is paid in. There is no magic piggy bank, so it does not take much to guess what will happen to property values if the site continues to run down …
Anyway, well done to those who have now stepped forward as directors. While we criticise Dudley for allowing himself to be left as the sole director (and the delicate issue of appointing himself, through Team, to manage the place), the leaseholders should understand that without him this RTM site may well have failed.
We were contacted by a leaseholder earlier this year whose RTM had collapsed because nobody wanted to take on the work of being a director. Once an RTM comes to an end, the landlord takes over the site again with his choice of agent, which will almost certainly undo all the reasons why the leaseholders formed the RTM in the first place.
The bad news is when an RTM fails the residents have to wait at least 4 years before they can start again. Unless the leaseholders can think of a very good reason to the contrary, they are automatically excluded from applying to become an RTM within that period.
Under schedule 6 of the Commonhold and Leasehold Reform Act 2002 it is clear “that right has been so exercisable but has ceased to be so exercisable less than four years before that time”.
The standard RTM Mem & Arts for RTM Companies say this:
Quorum for directors’ meetings
16.—(1) At a directors’ meeting, unless a quorum is participating, no proposal is to be voted on,
except a proposal to call another meeting.
(2) The quorum for directors’ meetings may be fixed from time to time by a decision of the
directors, but it must never be less than two, and unless otherwise fixed it is two.
(3) If the total number of directors for the time being is less than the quorum required, the
directors must not take any decision other than a decision—
(a) to appoint further directors, or
(b) to call a general meeting so as to enable the members to appoint further directors
This seems to limit a sole directors ability to make decisons to appointing other directors or calling a meeting.. Would it enable a sole director to appoint a managing agent?
That the residents are in arrears is a contrived argument.
Article 19 of the model articles manages conflicts of interest. They are prohibited from involvement in that aspect of a board’s activities and decision-making.
Perhaps it is their frustration that has led to their withholding service charges. It is presumptuous, even arrogant, to state that they are therefore unfit to hold office.
No agent should feel that he has a moral duty or divine right to retain control. His destiny is in the residents’ hands, a process that in this case the agent engineered.
The agent is free to resign if arrears make management untenable, or with his out-going director’s hat on he can say as much and warn all members.
One should ask why those “substantially in breach” are not already holding county court summons, or why new owners have not been invited or encouraged to join while under the agent’s stewardship. Even if there is good reason, agents have to accept that loss of confidence is a factor and step back gracefully.
It is foolhardy to accept the model articles as it allows any person to hold office.
Any future client should insist that where a first director is appointed, that his/her retirement is specified, and the appointment of a residents’ board is achieved by a certain time or stage.
Further, office should be restricted to members, and all officers retired automatically or by rotation. This works for most RTM Co and stops people getting entrenched and hard to hold to account. They have to be voted back in, and hey, whats one meeting of everyone once a year?
Mr Gurvits may have a point but not for the reasons he states, based on the article.
This seems an example of a scheme being hijacked by its agent or resident apathy, until now.
Too often residents want change but “Be a director? Oh no … no, no, no!”
Which is why in the past I have recommended appointment of trustees/ trustee directors ala manager appointment to avoid failures of RTM.
A Quad Leaseholder
It is a shame that this article has been published including alleged minutes of a meeting that was produced by Mr Joiner who was not the appointed minute taker of said meeting and whose ‘notes’ are not approved by the new Board of Directors as minutes of that meeting. However it serves to indicate what leaseholders, who could be bothered to fight, have been going through these last few years. We, it appears, have no rights but to do as we are told…like naughty children.
How does a champion of RTM comes in and take over? Simple it appears – as most leaseholders just do not engage with these issue. Just like this somewhat inaccurate article can be written about the situation. Who do you turn to when you have been so badly let down? It seems that we should just pay up and shut up!
If you are interested to learn a bit more about our plight, please read on…
Yes, we were unhappy with the costs and poor service from Peverel. We wanted value for money. After great effort a ‘Tenants’ Association’ (50+% flats signed up), recognised by Peverel was formed, met and elected 6 members to steer and form the RTM. So talk of current numbers / representation out of 105 properties is just a distraction…unless efforts are made to maintain or increase membership!
We foolishly took The RTM Federation’s word that they were non-profit making and there to help us and not themselves. A leasehold wanted to start her own management company. I told her she would have to tender at the appropriate time – just like anyone else, but directed her to Mr Joiner for advice. The next thing to happen was an information embargo. We were completely excluded from information on the progress to acquire RTM. Efforts were futile – deflected with reasons including that it was to prevent leaks of plans back to Peverel.
I believe OUR RTM venture was seen as cash cow. But then I am just a stupid leaseholder so whom am I to know what really went down!
There was no democratic process that I am aware of that led to Mr J being a Director of our RTM. Through our efforts we eventually found out that he was. There was no democratic process which led to the signing of a 2 years with 6 months break clause contract – again we eventually found that out too. At a meeting, where thankfully Mr Gurvits was present and had copies of emails to prove it, attempts were made to deny the type of contract that we were lumbered with. We had to go to Companies House website to learn who were Directors and when.
Should we not learn from Mr Gurvits’ experiences / knowledge of how we were now being duped?
We had no say in the conflict of interest appointments.
We were sent service charge demand on the basis that it’s 15% on top of what Peverel charged. Great accounting!
There has been numerous requests for proper accounts.
The roof still leaks, there are still buckets collecting drips, the communal carpet areas still look stained / dirty etc. etc!
This year we’ve seen draft accounts, met to amend them and seen nothing since. But we’re told that the accounts have been done.
Some of us who have refused to pay all of the Service Charge demand feel that they have a moral & legal right to do so given the circumstances in which our RTM has been hijacked. If someone puts a gun to my head, should I pull the trigger?
Is it wrong to set funds aside in an escrow account whilst disputes drag on?
Does owing two months instalments represent ‘substantial’ non-payment?
Is it wrong to withhold payments pending accurate accounts?
Those of us who are openly withholding payments – and not for personal gain – can be account for and now that new Directors have been elected (awaiting confirmation that appointments made at Companies House), have or are addressing that issue. Yes, there are always wilful non-payers irrespective of circumstances. But lets not mix up the two.
We might not have had money to throw at our plight but had none of us persevered with protesting, somehow keeping positive hope for what is true and right to win through in the bitter end, we would not have had the success we have recently won.
Leaseholders at The Quadrangle went for RTM because THEY wanted the right to manage in order to improve their lot which means improved cleaning & maintenance & reduced service charges – not because they ever expected an abuse of trust or to be overtaken or treated in this way.
We are grateful for all the positive support.
A quad leaseholder. We have been critical of RTMF for allowing the leaseholders to let things get to the position were none of you wanted to stand as directors. But if you’re now going to invent some revisionist view of events and claim the site was hijacked many of the readers will see through your claims.
Hopefully now you have new directors the problem will be resolved. As I mentioned above had Mr Joiner also stood down your RTM would now be dead..
Your understanding of how leasehold property management works is a little wrong. It often happens when an RTM starts the previous agent does not leave the site in the best condition and you have to spend money in order to get things back on track.. Rather than complain some of you should have been finding out what was happening and why.
If you think the service charges wrong you should still pay and then take the RTM to the Tribunal – better still ask the Tribunal to mediate the matter it costs a lot less.. There is no mechanism for you to choose to make a part payment based on what you think is reasonable.
By keeping back your money you do nothing other than hurt yourself and your fellow leaseholders and ensure there is no money to do the things you all want to happen – money to keep the site working only comes from the service charges. It does not take too many people keeping money back before the site becomes crippled.
Many readers will also smile at the idea you should see Mr Gurvits of all people as a sage advisor. Look in the search bar for cases where his name appears or look at the Tribunal records.
I would add to Martin’s post that there is no obligation to step back in on the freeholder. While it might serve their commercial interests to do so they may not , especially if the RTM has left a “right mess”. Readers should not think that if the worst comes the freeholder will take it on, they may not.
I know that some may feel that no management might even be better than some freeholders and agents tender mercies 🙂
DJ may be referring to co option, where directors are invited by the present board to join. If his argument that the notice nominations and resolutions were invalid, then the magnificent seven can requisition an EGM to call for their appointment correctly, and under special notice remove DJ.
it would be sensible for proxies to contain a voting resolution to “appoint Mrs A as a director Yes No Abstain, Mrs A having been nominated by Miss B ..etc”, and therefore members or shareholders can vote specifically.
Any decent company secretarial service can assist with drafting this.