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
Related posts:
Pensioners tell Dudley Joiner to give them back their £27,000 sinking fund
Dudley Joiner’s Team Property Management made insolvent by Quadrangle House RTM
Quadrangle House residents seek to regain control of their RTM
Right to manage promoter calls it a day at Quadrangle House
Dudley Joiner: Not relevant that I was disqualified from being a company director for 7 years
Feeble talk from CMA at ARMA conference
It is indeed an imperfect world we live in.
Whilst recognising Dudley Joiner and the RTMF has done some very good work, i do have some issues (which perhaps Mr Joiner could clarify?)
Is the RTMF a commercial enterprise? If so could it not confuse the public by having a .org website?
If the RTMF agree to pay the costs of a RTM in exchange for a management contract, does the cost of the contract depend on the difficulty of obtaining RTM?
Since it is the responsibility of the previous management company to collect service charges, can it be fair to exclude leaseholders from becoming directors of the new RTM company?
I can see both sides of the story here especially as the RTMF have laid out a lot of money to get the leaseholders the RTM Co, but why have these leaseholders not taken a lot more interest in what is going on at their site?
The person(s) who instigated the RTM process should have set up a good communications net work to the owners at this site by getting all their email addresses and keeping them informed about what was happening and requesting more directors to replace the out going ones.
It is very dangerous to bury heads in sand and hope it will all run like clock work because it just doesn’t.
Directors should hold meetings with their managing agents on a quarterly basis until things are running smoothly or every 6 months at least. They should look at finances and ensure money is being spent to the best advantage and that they are getting value for money.
I can imagine that there has been a lot to sort out on this site but leaseholders have to understand they really do have to keep their eye on matters/finances at all times.
Hopefully they can all find a way to work through it amicably but dialogue is definatley the way.forward.
I would like to thank Sebastian for faithfully reproducing my response to the issues at The Quadrangle.
I have to say I do not especially like the story headline. I remember newspapers earlier this year reporting “Parents remove cancer-stricken child from hospital and flee to Spain”. As time revealed those attention-grabbing captions did not accurately reflect the full truth of the situation and I think the same is true in this case. I hope discerning followers of Campaign against retirement leasehold exploitation and LKP will read between the lines and see what is really happening here.
As I have already stated, [REDACTED …] complainant at the Quadrangle is an owner who has substantial arrears of service charges and is currently being sued in the county court by our solicitors. [REDACTED … OWNERS WHO SUBLET] flat and has presumably received rent payments from tenants, yet has a long history of failing to pay service charges, both to TEAM and to Peverel [REDACTED …] . All those who regularly pay their service charges should remember that if some refuse to pay what they owe the shortfall will inevitably be added to the following years charges and the good payers end up paying more. which is wholly unfair.
[REDACTED …]
I urge all leaseholders at the Quadrangle to judge TEAM fairly. We intend to ensure RTM is a success and as long as owners who pay their service charges continue to support us I am confident standards will continue to improve, which will eventually be reflected in the increased value of Quadrangle properties.
As is correctly reported we will be holding a meeting on 25th November and will announce the time and venue shortly. Prior to this meeting we will also be circulating a member’s resolution and information on nominations for RTM Directors. A number of owners have already put themselves forward and we welcome more.
In answer to the previous comment, the RTMF is a not for profit company. The standard RTM fee charged by the RTMF under the scheme referred to is £100 per flat, irrespective of difficulty. In the event leaseholders at the Quadrangle were unable to pay this fee and an alternative solution was required. With regard to service charges, of course, it is the duty of managers to collect them, but as stated above, it is a contractual obligation of leaseholders to pay them, and pay them on time.
Dudley Joiner
Director
RTMF
I hope all will note, that as soon as any question is asked of Dudley Joiner, he always gives a comprehensive response. [REDACTED …] I am not saying that it is the case here, but given that their is no legal right for a RTM company to collect previous unpaid service charges (unless authority is given) it must be very tempting for a resident in arrears to appoint a new managing agent on the “understanding” that service charge arrears will not be collected.
At our block our service charges went up substantially after we removed Peverel via RTM. We have many years of incompetence and neglect to make up for and, needless to say, there were no reserves.
This is an unfortunate situation that could and should have been either avoided or explicitly agreed to. It should be resolvable amicably.
BTW money owned in service charge arrears is a debt of the outgoing managing agent. The new managing agent is under no obligation to collect it. We all know [REDACTED … SOME MANAGING AGENTS …] in some of the sites from which they have since been deservedly thrown out: helped themselves to the money in the reserves. Of course this was not their money. If this happened at your block repayment can be compelled (they will pay up to avoid being taken to court–and have done so).
Paul Joseph,
You are correct in what you say. Not only is the outgoing managing agent responsible for collecting outstanding service charges, but once collected they must pass the funds to the new managing agent. In the case of (Don’t worry, editor, I will redact it myself!) REDACTED i have had sight of a memo concerning arrears on handover. It “suggests” that three warning letters are written to the resident, threatening court action if the arrears are not paid. If this fails the amount is to be written off and no further action is to be taken. The same company (REDACTED) has been found at the LVT to have simply deducted arrears from the service charge reserve fund (which is not lawful)
Michael,
From now on let us refer to the nr 1 [CENSORED] company in the industry as REDACTED.. If any company deserves this it’s REDACTED.
REDACTED it is!
Anyone with any problems with REDACTED on the matter of misuse of reserves should contact Tanfield Chambers.
Having conducted more research into the situation at The Quandrangle, i have discovered that major problems were encountered in a previous RTM in 2011.
I believe Dudley Joiner has walked into a minefield, and is dealing with a very difficult and unique case.
It sounds as though the owners at Quadrangle House are lucky then that The RTMF took this on.
The simplest way would have been for all the leaseholders to pay the small amount of £100that was requested to sort out all this mess..
It never ceases to amase me how some leaseholders expect all this work to be done free of charge for them.
They are authors of their own misfortune. As members, not shareholders, they can requisition an EGM or in default hold their own meeting, and if they seek to remove a current director. give special notice to do so.
“Not only is the outgoing managing agent responsible for collecting outstanding service charges, but once collected they must pass the funds to the new managing agent.” Actually no under RTM that is not how it works. The outgoing freeholder produces a statement of expenses incurred to RTM date and deducts income received and passes over the balance, If it is negative balance, then they collect sufficient arrears to put themselves back in funds to zero.