If a leaseholder feels their block is not being managed properly, he or she can apply to the First-tier Tribunal to have a new manager appointed. However, if the current manager thinks the application is unjust or unwarranted, there are options for a successful defence, as Brady Solicitors explain in this latest client success story.
Appointment of a manager is a ‘fault-based’ right. This means that leaseholders can exercise the right to apply to the FTT if they consider the management of the block to be unsatisfactory. As part of the application, the leaseholder must put forward a potential candidate for the manager role. They also must be able to demonstrate one of the below statutory breaches:
- The “relevant person” (usually the freeholder or RTM company) is in breach of their obligations under the lease relating to the management of the building; or
- Unreasonable service charges have been made or are proposed to be made; or
- Unreasonable administration charges have been or are proposed to be made; or
- Any relevant person has failed to comply with a code of management practice.
Plus, in all cases, it must be ‘just and convenient’ to appoint a manager.
At Brady Solicitors we regularly help leaseholders to exercise their right to take control of their block through the Right to Manage and, from time to time, Appointment of Manager. This recent case was a little different in that we were acting for the freeholder to defend an Appointment of Manager application from a leaseholder.
The leaseholder had applied to the FTT under the Appointment of Manager legislation, claiming various issues of mis-management and proposing her father as the new manager.
We were instructed on the case a month before the preliminary hearing in October, and it was our client’s case that the father was not an appropriate person to be managing a substantial circa 100-unit development.
The opinion of the FTT at the preliminary hearing was that management had improved under the current managing agent (there had been several less capable agents prior to this) and that, whilst there were some reasons to be critical of the freeholder, there were not sufficient grounds to grant the application.
The FTT agreed with our concerns over the ability of the leaseholder’s father to manage the development, and they invited the leaseholder to change her application and instead name the current managing agent as the proposed manager, a request that she declined.
All the parties returned to the FTT in January for the final hearing. Having had some time to reflect, the leaseholder was persuaded at the hearing to amend her application so that the FTT could appoint the current managing agent as manager of the development.
For our client, the freeholder, they were satisfied that the management of the block could continue under the care of the managing agent that they had selected and appointed.
There was a sense that some of the criticism was unfair, but the freeholder was happy that the applicant’s father was not appointed as manager.
Appointment of Manager cases can be sensitive and usually require substantial evidence and documentation. Whether we are acting for a leaseholder making an application or a freeholder seeking to defend one, thorough preparation is always key to ensure a fair and sensible outcome.
For help or advice on Appointment of Manager applications please do contact the specialist property management team at Brady Solicitors.