Management company dissolved
Posted: February 26th, 2021, 9:19 am
We have owned a couple of flats in a small block for a good number of years. The managing agent has been excellent at carrying out various works when necessry, and we have no complaints. However, there is a basic legal flaw under all this sweetness and light. The story (which I did know about before purchasing) goes as follows:-
The lease created a management company for the block in which all the owners were equal shareholders. It was a normal Limited Co registered at Companies House. All was well for a few years, but when the original owners moved on, the others gradually lost interest. Eventually, the last two people holding the baby, decided to delegate the practical running, administration and budgeting to the current third party, a local letting agent. However, stupidly, the last remaining Director - when he moved abroad - couldn't be bothered to file accounts any more and dissolved the company. I rue the day he did that, and there seems there was no involvement or discussion with other owners.
Now we have an efficient managing agent with no legal authority. It's fine provided no one rocks the boat, but if some smart solicitor spots the problem, it could mean someone's sale falling through. Remarkably, at least four flats have changes hands without any solicitor raising it as an issue, AKAIK. The "authority" of our managing agent is based upon a sort a trick: provided no one refuses to pay their share, there is no problem, but if someone challenges it and refuses to pay....
One day, it seems sensible to try to regularise the situation.
As I understand it, if the landlord decided to, they could "take back control" which may be fine, though more expensive I imagine. It has been suggested we could go through a process which would start another RMC, but the quote we have for doing this seems rather high and difficult to sell to the owners who will no doubt say "if it ain't broke, why pay so much to fix it?".
Another alternative: I wonder is it possible simply to resurrect the original company - can it be "undissolved"?
Incidentally, as a former director of a management company in another block, I am not keen to get involved as a director again - I was jolly relieved to get out of it! I would not have considered changing anything in this case, but a "new broom" in charge at the managing agent spotted this as a potential problem and raised the matter with me.
Has anyone here faced such a problem, and how could it best be resolved? Indeed, is it necessary to do anything?
Arb.
The lease created a management company for the block in which all the owners were equal shareholders. It was a normal Limited Co registered at Companies House. All was well for a few years, but when the original owners moved on, the others gradually lost interest. Eventually, the last two people holding the baby, decided to delegate the practical running, administration and budgeting to the current third party, a local letting agent. However, stupidly, the last remaining Director - when he moved abroad - couldn't be bothered to file accounts any more and dissolved the company. I rue the day he did that, and there seems there was no involvement or discussion with other owners.
Now we have an efficient managing agent with no legal authority. It's fine provided no one rocks the boat, but if some smart solicitor spots the problem, it could mean someone's sale falling through. Remarkably, at least four flats have changes hands without any solicitor raising it as an issue, AKAIK. The "authority" of our managing agent is based upon a sort a trick: provided no one refuses to pay their share, there is no problem, but if someone challenges it and refuses to pay....
One day, it seems sensible to try to regularise the situation.
As I understand it, if the landlord decided to, they could "take back control" which may be fine, though more expensive I imagine. It has been suggested we could go through a process which would start another RMC, but the quote we have for doing this seems rather high and difficult to sell to the owners who will no doubt say "if it ain't broke, why pay so much to fix it?".
Another alternative: I wonder is it possible simply to resurrect the original company - can it be "undissolved"?
Incidentally, as a former director of a management company in another block, I am not keen to get involved as a director again - I was jolly relieved to get out of it! I would not have considered changing anything in this case, but a "new broom" in charge at the managing agent spotted this as a potential problem and raised the matter with me.
Has anyone here faced such a problem, and how could it best be resolved? Indeed, is it necessary to do anything?
Arb.