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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10176
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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I own a flat in a block managed by The Gateway Management Company

Customer Question

I own a flat in a block managed by The Gateway Management Company (Brighouse Homes).
As far as I can deduce the management company is not a 'proper' management company like the ones I have experienced in the past (They have not issued shares to the owners nor do they have AGMs). The building is over 3 years old now.
The service offered by the management company is poor and very expensive. Most residents are unhappy. The accounts do not tally with what they are charging and there is no sinking fund. Communication s poor and lttle is done to maintain the buildings. Charges incrreased 25% last year!
I understand that in certain cases the management company can be replaced by another formed by residents yet I cannot find the English legislation that allows this (I have only found Irish law).
1. Should he management company company be setup correctltly rather than a standard LTD?
2. How do the residents take control
Thanks you.
James Holroyd
1 Weaver House
Nantwich
CW5 5GT
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

The Management Company do not appear to be acting as they should be.

As to the shares, it all depends on whether the Company is limited by shares or guarantee (if the former, all Leaseholders should have a Share Certificate but not if the COmpany is limited by guarantee).

As regards ***** ***** fund, the terms of the Lease would need to be checked, but if it does allow the Management Company to make a charge under the service charge provisions for such a contribution, then it is up to them whether this is actually requested. There is no obligation on them to ask the Leaseholders to contribute towards a sinking fund. I can only guess that as the Development is relatively new, they have decided against it at this stage in time, although they can of course request it in the future, provided the Leases allow for this.

Either way, if all or the majority of the Leaseholders are unhappy with the way they are managing the Development, they do indeed have a right to manage themselves-

The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to force the transfer of the landlord's management functions to a special company set up by them - the right to manage company. The right was introduced, not just as a means of wresting control from bad landlords, but also to empower leaseholders, who generally hold the majority of value in the property, to take responsibility for the management of their block.

You will be able to find lots of useful information concerning the Right to Manage on the Leasehold Advisory service website.Link is- www.lease-advice.org

I hope this assists you and answers your questions.

Kind Regards

AL

Customer: replied 2 years ago.

Thanks for you reply. Here are some additonal questions.

The Management Company is not limited by shares because none of residents have any shares, however the three directors are related as deduced from the appointment report obtain from Companies House.

In their latest accounts there is £1 of called up share capital.

Is being being limited guarantee a special type of company, because as far as I can tell form their Articles of Association they are a standard LTD.

Will the AA state 'limited by guarantee'? How do I find out if they are limited by guarantee?

Are they acting illegally in any way?

Should they have converted to a proper management company after a certain period?

Can I still oust them if I get 40% of residents to agree even if they are a standard LTD?

Thanks in advance

James Holroyd

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