Director of property management company in breach of lease

[RobC123]

Hello !

I own a flat in a block which contains four flats.

The freehold of the block is owned by a management company, which in turn is owned by the owners of the four flats - we each have a quarter share of the management company and are Directors.

The management company has granted a lease to each of the flat owners - the lease outlines certain restrictions like no pets, no nuisances, no rubbish left in communal areas etc

One of the other flats has now been let by the owner to tenants - and these tenants are being particularly anti-social - loud music, keeping several noisy dogs locked in the flat, scattering rubbish etc etc.

The owner of the noisy flat will not address these issues with her tenants or respond to complaints by the other flat owners.

The owner of the noisy flat is clearly in breach of the lease between her and the management company, by allowing her tenants to behave in this way.

So, the question is, what can the management company do about it ?

Anyone got experience of this type of situation ? - seems odd that the management company would take action against one of its own owners/directors.

Any advice gratefully received.

[Eric Mc]

What does the Memorandum and Articles of Association of the management company say about discipline against directors?

[animal44]

Hi

The redress for breach of covenant is forfeiture, though you have to go to court for this. I believe an application to the LVT to decide if there is a breach is free and gives you grounds to start forfeiture. This may sound drastic, but the threat usually fixes the problem :-) I think it can also be applied to the tenant as the lease covenants are passed down when sublet.

Best ask here: http://www.landlordzone.co.uk/forums/forumdisplay....

and further lease advice here: http://www.lease-advice.org/ (they will also answer your lease type questions)

I am not a solicitor, but have been investigating the L&T act etc due to a similar issue...

[HiRich]

First, your dispute is with a leaseholder - that she is a Director is largely irrelevant.

Now, read your lease carefully, and define the alleged breaches (evidence will also be handy)

Next, re-read your lease and identify the contracted rights & services. Read the Article of Association for the Company (and any subsequent decisions by the Cirecotrs or Shareholder Meetings) to define process. It may require a meeting of either Directors or Shareholders (quite possibly the same thing).

Prepare a notice to the Leaseholder, and call an extraordinary meeting of either shareholders or directors (if necessary, so you are seen to follow procedure). Send notice to leaseholder (recorded delivery) stating seven days to resolve the matter permanently, as necessary invite to meeting, and identifying the proposal at the meeting.
The only item on the agenda is the breach of lease (detailed), and subsequent action. Actions will be:

• Suspension of all contractual rights, immediately and indefinitely
• Key actions to make good any damage or problems. Note that the lease may well allow the Company to enter the property (breaking down the door if necessary), and charging the leaseholder for the costs of rectification.

I would recommend you go with direct action - actually suspending rights now - rather than vague threats of court action.

Contractual Rights that you may be able to suspend (you can in my Company) include:

• Access to Buildings Insurance (N.B. you also have to advise anyone who has a claim on the property, such as her mortgage lender...)
• Access to common areas. Such as the front door that you are about to change the lock on...
• Use of communal services, such as hall lighting
• Use of bins, parking, commonal gardens and yards, etc.
• Any managerial services (e.g. Freeholder report for HIP/purchaser's enquiries), making it impossible to sell the flat.

You will also be charging her for rectification work during this suspension period. At the very least this will include

• Clearing up and removing rubbish deposited by the tenants
• Cleaning the walls, and washing the carpet of any communal area that the tenants attempt to use.
• Further communication

all at a rate that you define.

If you know your lease inside out, and you follow procedure, you have the whip hand. If she is stupid enough not to react, the lease will explain the ultimate sanction, which will involve court and either an injunction or eviction.