Previously my freeholder employed a management company to perform management duties on my property (very limited and I could argue he hasn't performed them adequately).
The management company is in reality the FH in another guise, but a previous LVT concluded the management fee was recoverable but did comment "Management fees — the lease clearly allows the Respondent to charge expenses for the management of the building. The Respondent sought to suggest that the management was actually carried out by an independent company, which has the same address, directors and shareholders as the Freeholder. The fact of the matter is that the vast majority of the correspondence in the bundle emanates from the Respondent and not the management company.
The Tribunal concludes from the evidence before it that the management company is simply a 'shell' company and the management is actually carried out by the Respondent."
The lease clause relied upon was "All other expenses (if any) reasonably incurred in and about the maintenance and proper convenient management and running of the building"
At the time despite the above comments, the actual demands for Sc were from the management company.
Since then though, there has been no correspondence from the management company, all correspondence including demands is from the freeholder, I have had no notification of whether the management company is still 'managing', I had notification many years ago when they first took over but nothing to say they have ceased (The RICS Code would appear to say LH's should be told).
I wonder whether I can put any of this to my advantage ? I suspect there was a reason the FH invented the MC and started using it, perhaps concerned as FH he couldnt recover management costs or that he could charge more when wearing his MC hat ?
I recently found this LVT Case – LON/00AW/LSL/2004/0059 Arora v Boultbee-Brooks (http://www.lease-advice.org/decision...-2000/1270.pdf) (referring to the Court of Appeal case – Finchbourne Ltd v Rodrigues’ (1976)) the Tribunal concluded that the Managing Agent was in effect the freeholders ‘alter-ego’ and concluded that the Management Fee was not reasonably incurred and chargeable to the Service Charge account.
The above points do pop up again in a more recent LVT here > http://www.lease-advice.org/decision...-8000/7380.pdf where the LVT decided that management fees are recoverable although this case is slightly different, the LH's do appeal here > http://www.lease-advice.org/decision...-8000/7381.pdf which is quite interesting especially as it becomes clear they didnt actually include the Arora v Boultbee-brooks decision in their bundle.
Andy
The management company is in reality the FH in another guise, but a previous LVT concluded the management fee was recoverable but did comment "Management fees — the lease clearly allows the Respondent to charge expenses for the management of the building. The Respondent sought to suggest that the management was actually carried out by an independent company, which has the same address, directors and shareholders as the Freeholder. The fact of the matter is that the vast majority of the correspondence in the bundle emanates from the Respondent and not the management company.
The Tribunal concludes from the evidence before it that the management company is simply a 'shell' company and the management is actually carried out by the Respondent."
The lease clause relied upon was "All other expenses (if any) reasonably incurred in and about the maintenance and proper convenient management and running of the building"
At the time despite the above comments, the actual demands for Sc were from the management company.
Since then though, there has been no correspondence from the management company, all correspondence including demands is from the freeholder, I have had no notification of whether the management company is still 'managing', I had notification many years ago when they first took over but nothing to say they have ceased (The RICS Code would appear to say LH's should be told).
I wonder whether I can put any of this to my advantage ? I suspect there was a reason the FH invented the MC and started using it, perhaps concerned as FH he couldnt recover management costs or that he could charge more when wearing his MC hat ?
I recently found this LVT Case – LON/00AW/LSL/2004/0059 Arora v Boultbee-Brooks (http://www.lease-advice.org/decision...-2000/1270.pdf) (referring to the Court of Appeal case – Finchbourne Ltd v Rodrigues’ (1976)) the Tribunal concluded that the Managing Agent was in effect the freeholders ‘alter-ego’ and concluded that the Management Fee was not reasonably incurred and chargeable to the Service Charge account.
The above points do pop up again in a more recent LVT here > http://www.lease-advice.org/decision...-8000/7380.pdf where the LVT decided that management fees are recoverable although this case is slightly different, the LH's do appeal here > http://www.lease-advice.org/decision...-8000/7381.pdf which is quite interesting especially as it becomes clear they didnt actually include the Arora v Boultbee-brooks decision in their bundle.
Andy