Some right to manage facilitators are tying in leasehold blocks to management contracts that are hardly less draconian that the ones imposed on them by their freeholders.
Members of the Leasehold Advisory Service stakeholders meeting last week were aghast to learn that some RTM facilitators, who may receive a commission, are signing up management companies on TWO or even FIVE-year management contracts.
No section 20 has been issued to gauge the views of all leaseholders, including those who are not members of the right to manage company, and the management companies are granted generous six-month notice periods.
“Wow! Blimey!” said the meeting chairman. “Six months on notice? Most managing agents only get three months.”
Some leaseholders have been challenging the practice, arguing that RTM facilitators or RTM companies cannot enter into a long-term contract without having a section 20 consultation owing to the monetary size of the management contract.
The stakeholders, who included senior managing agents and trade body representatives, argued that a section 20 in these cases was essential for the harmony of the RTM block.
If there is not agreement on the managing agent then there is a fissure through the block, it was said.
“I would suggest that if you have a majority of leaseholders who want manager A and a right to manage company wanting manager B then you have a more divisive leaseholder body than you had before you started,” was the observation of one senior figure.
The problem is compounded if the right to manage facilitator receives a commission from the incoming managing agent, which may be based on being handed a long-term contract.
There is also the question of whether all – or any – leaseholders are aware of the commissions paid by an incoming managing agent to the RTM facilitator.
It was particularly important to have an above board consultation in cases where the RTM membership is only just over the 50% threshold.
“That is exactly why you should be consulting on who will take over the management,” it was said.
(The LEASE stakeholder meeting takes place under Chatham House rules, which means speakers are not identified.)
Related posts:
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Leaseholders should beware cheapo managing agents
Baroness Gardner calls for leaseholders’ money held by managing agents to be protected
Managing agents owned by landlords must come clean … says leading managing agent
DCLG told ‘incentive to remain an honest managing agent gets less with each passing year’
Come on, Shelter! Don’t demand more housing without addressing leasehold’s many, many defects …
The only facilitator known to have these “dodgy” practice is Dudley Joiner with his company TEAM. Why are you not naming him? and any other facilitator who is known to you to indulge in this practice?
Team does to undertake right to manage.
My companies certainly do not engage in “dodgy’ practices.
The aforementioned post by admin is misleading. It neglects to mention that I was personally at the LEASE Stakeholder meeting and it was me that raised the issue as one that could benefit from statutory clarification, in response to a question from the chair.
It is worthy of note that, as far as I am aware, nobody in attendance was a solicitor or barrister. Hence all comments made were effectively from lay persons.
On legal advice the RTMF does not currently advocate s.20 consultation when selecting the first managing agent. This is because the selection necessarily takes place between determination date and acquisition date. It has to be done in this period as the new managing agent is required to start managing from the acquisition date.
The RTM Company does not acquire any management powers until the Acquisition Date. Prior to the Acquisition date the landlord is still empowered and has all management functions in conjunction with any manager it has appointed. S.20 consultation is binding on the landlord.
If the RTM company directors initiate s.20 consultation prior to the acquisition date their actions would be ultra vires. They have no powers or authority to do so.
I agree with the principle that leaseholders should be consulted. Under the RTMF procedure every leaseholder is invited to become a member of the RTM Company (even if they did not initially support RTM) and each one has the opportunity to participate in management selection process, which is conducted entirely democratically. Contrary to the allegations made on this website, RTMF does not recommend or favour specific managing agents. We remain totally neutral as our testimonials will confirm.
Under our selection process leaseholders / RTM members are not just consulted about the appointment of their manager, they actually make the choice and the final decision themselves. This is one step better than s.20, which only requires consultation.
If anyone disagrees with this policy perhaps they can explain where the power to instigate s.20 prior to acquisition date comes from? It certainly does not come from the statute.
The post is not misleading in failing to name you: the LEASE stakeholders meeting is held under Chatham House rules, so there are no attributed comments. No one is named. There was certainly one barrister present and possibly other lawyers.
You cannot describe your managing agent selection process as “entirely democratic” if the selection list is restricted to those managing agents prepared to buy the management contract off the RTMF by paying your fees. Some companies will not take part in this process.
Can you also remove my comment from the RTMF website which is a partial reproduction of a private communication to residents at Platinum House, north London?
http://www.rtmf.org.uk/rtm-services-retirement.php
It reads as an endorsement, and I do not endorse the RTMF.
You have been asked to do this many times.
Sebastian O’Kelly
LKP / Campaign against retirement leasehold exploitation
Dudley how can you say “It is worthy of note that, as far as I am aware, nobody in attendance was a solicitor or barrister. Hence all comments made were effectively from lay persons.” ?
Do you not remember there was at least one solicitor, one barrister and one Tribunal judge in the room along with a number of others with specialist experience in the field including the technical experts from ARMA?
Nobody else seemed to agree with your view on how things should work if I remember correctly.
Martin and Sebastian,
Our position on s.20 is stated above. I asked the question “If anyone disagrees …perhaps they can explain where the power to instigate s.20 prior to acquisition date comes from?”
Instead of perpetual criticism of our advice why not address your minds to that simple question. RTM companies prior to the Acquisition Date do not have the power to instigate s.20. However forceful opinions may be on whether that is right or wrong, that is a legal fact. That is why I suggested clarification was required.
All the responses given at the LEASE forum were made impulsively. I believe that when attendees reflect on the issue in more detail they will probably come to the same conclusion as us.
You will recall I had a similar fight with you over the effects of Triplerose. You insisted we were scaremongering and that we were the only party suggesting something needed to be done to legalise affected RTM companies post Triplerose
Now they have had time to consider it properly LEASE has confirmed our advice re Triplerose to be correct. Perhaps you will now print an apology?
There is none so blind as those who will not see!
Dudley
Is there any information on LEASE website on this? I can only find the original decision info and clearly since this decision was made (almost a year ago I believe?) it is the most pressing issue regarding RTM and should have been dealt with immediately. When I wrote to LEASE last July there advice was wait and see how Landlords respond!! Not very helpful.
How odd that Dudley of all people should quote “There is none so blind as those who will not see!” He should have remembered the second part of quote which adds “The most deluded people are those who choose to ignore what they already know.”
To help others see a little more, while Dudley seems to continue to ignore what he already knows, here is some more from the meeting:
When Dudley suggested “Hence all comments made were effectively from lay persons” What he should have said was that he knew full well these were not “lay” people. He knew the solicitor, the barrister and the judge as well as most of the other experts. Perhaps by “lay” people he meant Seb or myself but we did not say a single word in this part of the meeting.
In response to us pointing out these were not “lay persons” Dudley swiftly changes his position. He now claims “all” these experts’ must be treated with caution as they reached a view “impulsively” after he raised the issue of his contracts. It not clear on what delusional basis he also adds these experts are likely to “reflect on the issue in more detail they will probably come to the same conclusion as us.”.
What Dudley does not mention was that it was more of a look of shock from many in the room as he brazenly sought to justify why he provides RTM contracts with 2 year “honeymoon” period which then turn into a “rolling contract” with a 6 month break clause.
What Dudley should understand is that a number of people in the room, as well as ourselves, had already seen some of his RTMF contracts. We all knew the contracts were actually 5.years long not 2 years. Yes these contracts allow the leaseholders to terminate after their 2 year “honeymoon” but only with a penalty payment. Not the best way to provide leaseholder choice seemed to be the considered view in the room –save for Dudley.
Turning to the Triplerose multi block RTM case which Dudley raises again saying we should apologies because LEASE have “confirmed” he’s right? Sorry wrong again. LEASE have not issued any statement of this sort (nor for that has anyone else). We still regard Dudley’s advice as both flawed and scaremongering. We instead reported the view of other experts including barristers. Those views still stand as far as we understand. We also hope to report more soon in this subject.
What Dudley eventually wrote to me on Triplerose case in his usual polite understated way was: “I am sorry to say you are talking absolute nonsense and it betrays your very limited knowledge of RTM, its scope and its consequences, which is why you should leave it to the experts.”
As for “legal facts” on RTM contracts Dudley is not a solicitor so let’s leave it to the experts – these will be the experts who told him he was wrong at the LEASE meeting – not us. But Dudley already knows this as he was at the meeting.
Which takes us back to: “There are none so blind as those who will not see. The most deluded people are those who choose to ignore what they already know”.
So Dudley can I suggest an alternative saying you might want to adopt before posting again “if you find yourself in a hole stop digging” – it’s an old cowboy saying – somehow it seems appropriate.
Martin,
I don’t wish to perpetuate a slanging match with you on these issues. We have stated our legal view, which we believe to be correct. If you disagree I suggest you seek your own legal opinions.
With regard to LEASE, on the multiple block issue LEASE has written to one of our clients giving the same legal opinion as RTMF and stating that doing nothing is not an option. That is a fact.
With regard to the need for an RTM company to initiate s.20 consultation prior to the Acquisition Date Nicholas Kissen of LEASE has provided RTMF with written professional advice, which concurs with the views I expressed at the stakeholder meeting. That is also a fact.
I am told by Mark Spall (previously a senior legal adviser with Age Concern for 15 years and now with the Leaseholder Association) that Age Concern (now Age UK) sought advice from LEASE on this issue many years ago and the advice given then was that s.20 consultation was not appropriate when appointing a manager through RTM.
Notwithstanding the advice given by others (whether solicitors, experts or lay persons) I prefer to rely on the opinions of our own solicitor, who has advised us correctly over many years of RTM issues.
It is my belief that your impulsive criticism of RTMF and other organisations I am associated with is motivated by malice. It is certainly damaging to our reputation as experts in the field of RTM.
I note that your original post that accused RTMF of scaremongering over the Triplerose issue has now been removed from your website. I will stop digging when you remove all other posts that malign our RTM business model and our leasehold activities.
LKP ADMIN: This is the post you refer to, and it has never been removed from the website. (Until you started commenting, there was no mention of the RTMF.)
In reply to Lesley…
I will arrange for you to be sent a copy of the advice from LEASE by email.
Although it was addressed to a another client its content is relevant to all those affected.
To ‘Admin: ” What excuse do you have this time for removing my replies?
What are you referring to? We publish all comments on this site.
Very interesting to read these comments and I must say as a leaseholder, who has been approached by RTM, leaves me with some grave concerns for the future repairs and management of properties.
I wonder why nobody is looking into the account of Dudley Joiner, RTM and his immediate family who are involved in running the Team Property Management Company. This is a very dodgy outfit and I am sure the income from this operation could not support the lifestyle and spending of so many.