Property manager Richard Davidoff has won a retraction and apology from two young ex-employees who posted fake customer reviews online, but fines from regulators are piling up.
The lawyers of the two ex-employees apologised in open court earlier this week to Mr Davidoff, his wife and daughters who work in the family’s businesses and ABC Block Management and ABC Hendon. They also retracted allegations of criminality. This brings to an end a controversy that friends say has cost the two £60,000 each in legal costs and settlement.
Meanwhile, the Property Redress Scheme has made three rulings totalling £16,000 against Mr Davidoff’s ABC Estates, based in Edgeware, north London.
These come on top of Mr Davidoff personally being found to have failed in his fiduciary duties as a section 24 court appointed manager at a site in south London in August last year. Major works estimated at his appointment at £10,000 were revised upwards to nearly £100,000, the tribunal found.
In addition, Mr Davidoff was not a “satisfactory witness”, was arrogant and dismissive of the leaseholders and had proposed to entrust the major works to a company, Valens Contractors Limited, whose sole director was the wife of Mark Reed, the head of block management at ABC Estates.
“Any criticism of the conduct of the manager will be examined with care, because they are made against the manager in his capacity as an officer of the tribunal,” said Judge Robert Latham.
The ruling resulted in ABC Estates being expelled from the Association of Residential Managing Agents, while Mr Davidoff was personally expelled from the Institute of Residential Property Managers and Mark Reed resigned while his conduct was under investigation.
The property tribunal also revised its procedures for appointing section 24 managers as a result of the case.
The Property Redress Scheme, “a government authorised consumer redress scheme for lettings, property management and estate agents and other property professionals”, has made three recent decisions concerning ABC Estates lettings and block management business.
On 3 February 2022 the PRS ruled that it should pay £10,400 to the landlord of two houses which were rented out to tenants who subsequently established cannabis farms (case: PRSC107934). No criminal proceedings have resulted from this and there is no suggestion that ABC Estates had any knowledge that the buildings were being used for illegal activity.
The issue considered the service provided by ABC Estates and in particular the vetting of the tenants.
“I am unable to find that the agent performed referencing to the standard reasonably expected by the landlord,” the PRS ruled, adding:
“It is not within the authority of the PRS to make awards to the landlord for allegedly criminal activity, however, the PRS is able to compensate the landlord for losses incurred as a direct and foreseeable result of the agent’s poor service and compensation for the stress and inconvenience.”
The landlord estimated the damage at the two properties would cost £150,000 to put right.
The case was covered on The Guardian website on 9 January 2022:
When Shreena Shah went to check on one of her rental properties, she says she was greeted by an unlikely scene – a man dismantling equipment used to produce cannabis. It was not the first shock she had to endure. Shortly before, the police had discovered a cannabis farm in the other rental property she and her family own.
An earlier PRS decision of 20 December 2021 (case: PRSC107563) ordered ABC Estates to pay up £5,000 to another landlord after a letting breached rules for “houses of multiple occupancy”.
And on 21 January 2022 ABC Estates was ordered to pay £1,550 to the 46 Falcon RTM Company (case: PRSC107939). This was a dispute in which leaseholders had to launch a right to manage action as Mr Davidoff had ended up as the sole director of the residents’ management company at the site.
The case was reported here:
The property tribunal had awarded costs against Mr Davidoff’s associated company Boccel Management Limited, from which he had resigned as a director on 20 October 2021 and ceased to be the person with significant control. ABC Block Management resigned as a director a little later on 31 December 2021.
Boccel Management Limited has no active directors and has a compulsory strike off notice against it. It was not in a position to pay the property tribunal’s £1,550 cost award.
Mr Davidoff argued at the PRS that the costs were awarded against Boccel Management Limited, but the PRS decided that ABC Block Management should none the less pay up.
The PRS makes decisions rather than issues fines. However, failure to abide by the decisions by companies that are signed up to it can lead to expulsion. That in turn can lead to the end of the business.
The FTT decision on costs can be read here