Question 1

Employment Contract

Accepted Answer

We are a management company with directors who are all leaseholds with one exception who was a leaseholder but sold her property but was persuaded to stay on as a director. We have managed the company ourselves without the use of an outside managing agent. There are 28 properties. We are about to appoint one of our directors to take on the role of a Managing Agent with a modest salary who will relieve the directors of day to day responsibilities. Should we have a contract of employment? If so have you details from a member in a similar situation that we can use as a basis to prepare a contract of our own. The FPRA responds: The situation described below seems not to warrant an employment contact but rather a “management agreement” in the usual sense i.e. a contract between the landlord and the managing agent? We suspect the landlord does not really wish to get involved in employment law issues which it would need to get involved with if a contract was issued such as PAYE, employment protections issues, termination etc. As per the above, a more practical suggestion would be to enter into a “Management Agreement” with the directors company/sole trader as managing agent. This agreement will be similar to that used by managing agents appointed. The board will also need to ensure that the director / directors company has sufficient professional indemnity insurance to cover any issues of negligence etc.

Question 2

Employment Contract

Accepted Answer

We are a management company with directors who are all leaseholds with one exception who was a leaseholder but sold her property but was persuaded to stay on as a director. We have managed the company ourselves without the use of an outside managing agent. There are 28 properties. We are about to appoint one of our directors to take on the role of a Managing Agent with a modest salary who will relieve the directors of day to day responsibilities. Should we have a contract of employment? If so have you details from a member in a similar situation that we can use as a basis to prepare a contract of our own. The FPRA responds: The situation described below seems not to warrant an employment contact but rather a “management agreement” in the usual sense i.e. a contract between the landlord and the managing agent? We suspect the landlord does not really wish to get involved in employment law issues which it would need to get involved with if a contract was issued such as PAYE, employment protections issues, termination etc. As per the above, a more practical suggestion would be to enter into a “Management Agreement” with the directors company/sole trader as managing agent. This agreement will be similar to that used by managing agents appointed. The board will also need to ensure that the director / directors company has sufficient professional indemnity insurance to cover any issues of negligence etc.

Employment Contract

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