Leaseholders required to become directors. How?

[mc2fool]

I'm in a similar situation but apart from me and a 76 year old owner none of the other 5 owners were remotely interested in being Directors. Some were very good at being vocal about their minor gripes about our voluntary efforts though.

I feared becoming last man standing so I went through a section 20 consultation to appoint a managing agent under a long term agreement. Unsurprisingly nobody responded to the proposals until the 2nd stage when the costs were reported.

Having got the MA on board I then circulated a report highlighting to the owners the serious pitfalls of not having enough Directors of the Management Co and explaining that now we have a MA carrying out all the obligations, they would be Directors without having to shoulder any duties.

Matter of interest, how much does the managing agent charge and what do they do? And is it just a local one or one of (or part of) a big national estate agent or similar, and if the latter, who?

[Arborbridge]

I live in a leasehold flat where the flat owners are Directors of the management company, and the management company owns the freehold. Therefore the directors collectively own the freehold. In such a situation it would seem to me that each owner would want to be a director. Indeed, when flats change ownership, we arrange for the new owners to become directors as a matter of course.

I'm in a similar situation but apart from me and a 76 year old owner none of the other 5 owners were remotely interested in being Directors. Some were very good at being vocal about their minor gripes about our voluntary efforts though.

I feared becoming last man standing so I went through a section 20 consultation to appoint a managing agent under a long term agreement. Unsurprisingly nobody responded to the proposals until the 2nd stage when the costs were reported.

Having got the MA on board I then circulated a report highlighting to the owners the serious pitfalls of not having enough Directors of the Management Co and explaining that now we have a MA carrying out all the obligations, they would be Directors without having to shoulder any duties.

Still no takers so in the end I wrote to everyone saying effectively "I'm doing the off, you need more volunteer Directors, I've done my bit and told you the implications, now do as you please". That resulted in 2 signing up and the other 3 never replied. Those 3 will be unaware whether anyone else replied.

For a small block with a limited pool I'd advise anyone I know don't volunteer to run a Management Co, it's literally a thankless task, and don't even become a Director without duties unless it's one in all in.

My experiences have been similar. I was a Director of a Management Company for years and anything proactive was always left to me. After much cajoling, I managed to get two others two join me as Directors.
Well, time went on and I became burdoned with the thoughts of new legislation etc, for even though one has a good managing agent, the Directors are till responsible. I got out of that one by selling the flat, and it was a great relieve. Now, as I related earlier, a similar problem has cropped up in another flat and there was no real choice for me but the get to grips finding a solution which everyone agreed was essential but where only one person - me - was willing to be proactive.
As soon as this problem is solved, I shall again be selling up, which I want to do anyway.

Arb.

[Dicky99]

I'm in a similar situation but apart from me and a 76 year old owner none of the other 5 owners were remotely interested in being Directors. Some were very good at being vocal about their minor gripes about our voluntary efforts though.

I feared becoming last man standing so I went through a section 20 consultation to appoint a managing agent under a long term agreement. Unsurprisingly nobody responded to the proposals until the 2nd stage when the costs were reported.

Having got the MA on board I then circulated a report highlighting to the owners the serious pitfalls of not having enough Directors of the Management Co and explaining that now we have a MA carrying out all the obligations, they would be Directors without having to shoulder any duties.

Matter of interest, how much does the managing agent charge and what do they do? And is it just a local one or one of (or part of) a big national estate agent or similar, and if the latter, who?

They do everything which we have had to do in the past. We didn't want to go through that process and still retain a few duties which other owners won't be prepared to do in future.

So that includes gardening, window cleaning, routine repairs, compliance inspections etc. All the financial duties such as formulation of budgets, payment of suppliers, submitting annual accounts etc; company secretary role including submitting the annual return and organising the AGM; all the various leasehold duties such as lease transfers and lease compliance; arranging buildings insurance etc etc.

The annual management fee for that worked out at £1650 plus £300 for Company Sec role and about the same for getting the annual accounts independently signed off. The other prices were very similar so £250 to £300 per flat per annum is a good yardstick.

We only sought quotes from local companies as we wanted them to have a local office and we were lucky enough to find 3 that fit the bill. It was also important for us that the MA had a good level of activity in our local area so that they could easily accommodate our small block's needs without a disproportionate overhead cost.

[the0ni0nking]

Matter of interest, how much does the managing agent charge and what do they do? And is it just a local one or one of (or part of) a big national estate agent or similar, and if the latter, who?

They do everything which we have had to do in the past. We didn't want to go through that process and still retain a few duties which other owners won't be prepared to do in future.

So that includes gardening, window cleaning, routine repairs, compliance inspections etc. All the financial duties such as formulation of budgets, payment of suppliers, submitting annual accounts etc; company secretary role including submitting the annual return and organising the AGM; all the various leasehold duties such as lease transfers and lease compliance; arranging buildings insurance etc etc.

The annual management fee for that worked out at £1650 plus £300 for Company Sec role and about the same for getting the annual accounts independently signed off. The other prices were very similar so £250 to £300 per flat per annum is a good yardstick.

We only sought quotes from local companies as we wanted them to have a local office and we were lucky enough to find 3 that fit the bill. It was also important for us that the MA had a good level of activity in our local area so that they could easily accommodate our small block's needs without a disproportionate overhead cost.

When I got quotations to look at a managing agent (as one other leaseholder/share in freehold sufficiently peeved me off, the quotation I was given was £1200/year + VAT but that wouldn't include secretarial or annual accounts costs so broadly similar to your figure. (This was in the East Midlands within the last couple of years and was from a local provider with just a handful of branches).

The challenge is the smaller number of units there are, the more prohibitive this costs becomes as it's fixed - so 4 flats it £300/flat whereas 8 flats it's half that The size of the flats in the block could easily have been done as 8 x 1 beds but as it is were actually done as 3 x 2 beds and 1 x 1 bed.

So as it is, I'm still muddling through it with no help from the rest of them. I might propose they start paying me but the numbers would be so trivial it's not worth the hassle - although it might mean they sufficiently kick up a stink so as to feel the need to get involved and spread the burden - yeah; right!!!

[mc2fool]

Having got the MA on board I then circulated a report highlighting to the owners the serious pitfalls of not having enough Directors of the Management Co

Could you post that report please, it could be most helpful for our situation too....

[richfool]

They do everything which we have had to do in the past. We didn't want to go through that process and still retain a few duties which other owners won't be prepared to do in future.

So that includes gardening, window cleaning, routine repairs, compliance inspections etc. All the financial duties such as formulation of budgets, payment of suppliers, submitting annual accounts etc; company secretary role including submitting the annual return and organising the AGM; all the various leasehold duties such as lease transfers and lease compliance; arranging buildings insurance etc etc.

The annual management fee for that worked out at £1650 plus £300 for Company Sec role and about the same for getting the annual accounts independently signed off. The other prices were very similar so £250 to £300 per flat per annum is a good yardstick.

We only sought quotes from local companies as we wanted them to have a local office and we were lucky enough to find 3 that fit the bill. It was also important for us that the MA had a good level of activity in our local area so that they could easily accommodate our small block's needs without a disproportionate overhead cost.

When I got quotations to look at a managing agent (as one other leaseholder/share in freehold sufficiently peeved me off, the quotation I was given was £1200/year + VAT but that wouldn't include secretarial or annual accounts costs so broadly similar to your figure. (This was in the East Midlands within the last couple of years and was from a local provider with just a handful of branches).

The challenge is the smaller number of units there are, the more prohibitive this costs becomes as it's fixed - so 4 flats it £300/flat whereas 8 flats it's half that The size of the flats in the block could easily have been done as 8 x 1 beds but as it is were actually done as 3 x 2 beds and 1 x 1 bed.

So as it is, I'm still muddling through it with no help from the rest of them. I might propose they start paying me but the numbers would be so trivial it's not worth the hassle - although it might mean they sufficiently kick up a stink so as to feel the need to get involved and spread the burden - yeah; right!!!

I take it the MA fees would not include the actual costs of the various tradesmen, window cleaners, service engineers, gardeners, painters, etc. who they use/instruct, and who may not be the cheapest available, as the MA usually have their panel of favourites?.

[Dicky99]

When I got quotations to look at a managing agent (as one other leaseholder/share in freehold sufficiently peeved me off, the quotation I was given was £1200/year + VAT but that wouldn't include secretarial or annual accounts costs so broadly similar to your figure. (This was in the East Midlands within the last couple of years and was from a local provider with just a handful of branches).

The challenge is the smaller number of units there are, the more prohibitive this costs becomes as it's fixed - so 4 flats it £300/flat whereas 8 flats it's half that The size of the flats in the block could easily have been done as 8 x 1 beds but as it is were actually done as 3 x 2 beds and 1 x 1 bed.

So as it is, I'm still muddling through it with no help from the rest of them. I might propose they start paying me but the numbers would be so trivial it's not worth the hassle - although it might mean they sufficiently kick up a stink so as to feel the need to get involved and spread the burden - yeah; right!!!

I take it the MA fees would not include the actual costs of the various tradesmen, window cleaners, service engineers, gardeners, painters, etc. who they use/instruct, and who may not be the cheapest available, as the MA usually have their panel of favourites?.

That's correct. Myself and the other director have always worked pretty hard, for the benefit of all of us, at getting good prices on things like insurances, gardening, window cleaning and one off works. But others took that too much for granted and because nobody else was prepared to step up to the plate instead of low annual services charges they'll be closer to market average in future.