Residents at Quandrangle House in east London are furious that there is only one director of their right to manage company – and that’s the managing agent employed to run the place.
The 102 new and converted flats at the Stratford site, formerly Peverel-managed, were taken to RTM by the Right To Manage Federation, headed by Dudley Joiner.
It was then decided that Mr Joiner’s own property management company Team take over the running of the site.
Mr Joiner was the initial director of Quadrangle House RTM Co Ltd when it was set up in March 2010. He was then joined on the board by two residents, one in September 2010 and one in May 2012.
But this year both resigned, one in January; the other last month. This has left Mr Joiner as the sole director of the site as well as the proprietor of the managing agent Team, which is employed to run it.
“This is a complete conflict of interest and is a worse situation than when we were managed by Peverel,” says resident Naomi Tigger.
Along with other residents at Quadrangle House she is demanding an extraordinary general meeting to elect some new directors who are actually shareholders of the RTM by being the owners of the leaseholds.
They claim attempts have been made to call a meeting, but these have not been addressed in the past. Instead, residents say that they have been given a “bland response” from Team saying that a meeting will be held, but nothing has happened.
As a result residents contacted LKP. One leaseholder says she is withholding service charges in protest at the current management set-up at Quadrangle House, but her decision predates the resignation this year of the two resident directors. Another said:
“As the current situation stands, leaseholders feel powerless and vulnerable and there is potential of exploitation.
“It is ironical that in Quadrangle Square where we have obtained the right to manage … we have the least power any place can have.”
The residents are holding a meeting on Friday next week, and Mr Joiner is calling a meeting on November 25 to resolve the situation.
LKP reproduces below the articles of association of the RTM company.
In a long and detailed statement to LKP, Mr Joiner explained that the situation of him being the sole director at Quadrangle House was the result of circumstances and that the right to manage had been an “unqualified success”.
Mr Joiner was keen to ensure that those who become directors of the RTM are not those also withholding service charges.
Of two prominent complainants, one is accused of “bullying” concierge staff, which is under investigation, and another is facing proceedings, including forfeiture, for non-payment of service charges.
No leaseholder is disputing service charges with an application to the First Tier Tribunal under section 27.
Response from Dudley Joiner, of RTMF / Team
“I believe RTM for the Quadrangle has been an unqualified success. Under RTM we have progressively been addressing all outstanding issues.
“These have included identifying and repairing a major water leak (ignored for over 2 years) which has saved leaseholders about £90,000.
“We have repaired countless roof leaks (also ignored), replacied water damaged ceilings, re-plastered and redecorated the common parts, repaired the electric gates, refurbished the gym and fitness equipment, upgraded the CCTV, replaced the concierge computers etc, etc.
“More recently we instructed Thames Water to install individual water meters in each property so water charges are based on usage of each flat, a much fairer system.
“On the issue of RTM, this was undertaken by Right To Manage Federation on a special arrangement.
“Due to the circumstances, we agreed to undertake RTM for the Quadrangle on a very reduced upfront payment on the understanding we could recoup our full fee once RTM was achieved, hopefully from a new managing agent.
“In the event it took considerably longer than anticipated and costs escalated … When RTM was eventually acquired we met with members to review the options.
“The RTM Company was unable to pay our normal RTM fee. Further, Peverel had indicated it had no funds to hand over.
“Enquires to some managing agents indicated a reluctance to take over management and pay RTM fees if there was no money in the reserves.
“There were also very high service charge arrears and this indicated that whoever took over the block would be likely to have ongoing financing issues …
“In light of the above, I made an offer to members to take on the management via TEAM for an interim period using our standard RTMF Management Agreement, which allows for 6 months termination.
“This was unanimously approved … Our first issue was to insure the building which TEAM had to finance. The first years insurance premium was £58,719 due to the appalling claims history, due mostly to unrepaired roof leaks and general neglect.
“At that time there were 3 directors. Two have since sold their flats and resigned.
“We are in the process of seeking the democratic appointment of further responsible directors.
“The only precondition we will ask leaseholders to approve is that directors should be in good standing in the community and not be (or have been) in breach of their leases or have service charge arrears.
“I was asked to remain a director so I could represent the RTM Company in its ongoing section 94 dispute with Peverel. Admittedly this has run on … We believe the sum due is rightly in excess of £60,000.
“… As to my continuing as a director it is relevant to add that I would have been unlikely to commit financial support to the Quadrangle without the security of a supporting board of directors and my own board participation for as long as financial support was necessary.
“In our dealings with Quadrangle leaseholders I believe we have have acted in good faith throughout and always put the interests of leaseholders (as a collective) first.
“There are a few owners at the Quadrangle who supported RTM for the wrong motive, thinking it would provide a mechanism to escape their obligations under their leases, in particular their payment of service charges. This is an abuse of the RTM process and is not conduct we condone.
“As far as TEAM is concerned we have a duty to all owners to recover arrears and to maintain the building. That may upset a few who have another agenda, but we will continue to fulfil that duty for as long as TEAM is the appointed manager.
“The ongoing maintenance of an RTM Company with apathetic leaseholders can obviously become a problem as it relies on members continuing support. Where this support is not forthcoming the RTM Co is often vulnerable to take-over by anti-RTM groups of leaseholders who may have been waiting for the opportune time to intervene.
“Generally speaking leaseholders are only likely to get actively involved if they have something to gain. So they support RTM if they can get service charges reduced or a better service. After RTM, if things improve and everyone is happy with progress they often become apathetic. Contentment generally does lead to apathy.
“There will always be complainers and dissenters, often because they have misguided nor unrealistic expectations about RTM. If a building has been neglected through bad management, service charges may have to be increased to bring the building back to a good state of repair. There are some, especially buy-to-let landlords who are not resident on site, and don’t care about that. They are not concerned about stains on carpets as long as their tenants pay the rent.
“Large blocks, especially in places like Stratford, have a wide spectrum of occupancy. Few attend consultation meetings and this leaves RTM open to sabotage by those with another agenda. RTM is not an instant panacea.
“At the RTMF we want RTMs to succeed and are focusing more and more on educating leaseholders about post-RTM management, how to work alongside MA’s, to set realistic expectations and to be sure they are doing RTM with the right motives.”
Quadrangle House RTM Co Ltd articles of association can be read here:
NEW RTM ARTICLES