Question 1

Disastrous Managing agents

Accepted Answer

Q: Last year the managing agents appointed by the developer of our development sold out to another firm. We knew nothing of this until we were told in a letter from the previous managing agent. So it was very much a fait accompli. We subsequently had a meeting with the new managing agents and said we would give them a year to see how good they were. We did not sign their managing agents agreement. (Incidentally, we never signed the original managing agents agreement as that was done by the developer). The new managing agents have been a disaster (primarily because they do not respond to communications from either the directors or leaseholders). They have failed comprehensively to deliver any service, which has meant huge amounts of work by the directors to get anything done. Attached is a copy of the original ‘agreement’ as signed by the developer. It’s a draft and does not look like a legal document at all. Our year end is 30 June and we wanted the new manging agent to take over from then. We told the current managing agents of our intention 6 weeks before but prior to that had said we were looking elsewhere, invited them to tender, which they declined to do. They now want to charge us three months’ service charge, which we have no desire to pay given their appalling service. What is our position? Is what is attached legally binding on us.? As you can see there is no provision for termination under any circumstances - bankruptcy, failure to provide the services mentioned. We are so fed up with them that we may well go to ARMA over this. We have a comprehensive list of instances where they have failed to communicate with us. FPRA Committee Member Shaun O’Sullivan replies: It is unfortunate that you were not given advance notice of the change of agent and that they have proved to be less than satisfactory. Although I am not a lawyer and cannot express a legal view on whether the Terms of Management agreement, forming the basis of the initial arrangement with Robinsons as set up by the developer, remain extant, my own view is that they probably do. I would imagine that the sale of this element of the business would probably have provided for the new agent to take on existing clients, at least initially on terms already negotiated. That being the case, and on the understanding that you have not signed a new agreement, I would expect the terms of the original agreement to be upheld. Although you assert that there is no provision for termination under any circumstances, this would be unusual in the extreme and is not my reading of the terms which clearly state that either party can terminate the agreement by giving one quarter’s notice from a Quarter Day. Thus, unless you served notice on 25 March (Lady Day) to withdraw from the agreement on 24 June (Midsummer Day) it might not be unreasonable for the existing agent to levy a charge equivalent to a three-month fee. On the assumption that you have not yet employed a new agent, I might suggest that you consider giving notice to the existing agent on 29 September (Michaelmas) for termination on 25 December and for the agent you select to start then.’ [Submitted July 2016]

Question 2

Disastrous Managing agents

Accepted Answer

Q: Last year the managing agents appointed by the developer of our development sold out to another firm. We knew nothing of this until we were told in a letter from the previous managing agent. So it was very much a fait accompli. We subsequently had a meeting with the new managing agents and said we would give them a year to see how good they were. We did not sign their managing agents agreement. (Incidentally, we never signed the original managing agents agreement as that was done by the developer). The new managing agents have been a disaster (primarily because they do not respond to communications from either the directors or leaseholders). They have failed comprehensively to deliver any service, which has meant huge amounts of work by the directors to get anything done. Attached is a copy of the original ‘agreement’ as signed by the developer. It’s a draft and does not look like a legal document at all. Our year end is 30 June and we wanted the new manging agent to take over from then. We told the current managing agents of our intention 6 weeks before but prior to that had said we were looking elsewhere, invited them to tender, which they declined to do. They now want to charge us three months’ service charge, which we have no desire to pay given their appalling service. What is our position? Is what is attached legally binding on us.? As you can see there is no provision for termination under any circumstances - bankruptcy, failure to provide the services mentioned. We are so fed up with them that we may well go to ARMA over this. We have a comprehensive list of instances where they have failed to communicate with us. FPRA Committee Member Shaun O’Sullivan replies: It is unfortunate that you were not given advance notice of the change of agent and that they have proved to be less than satisfactory. Although I am not a lawyer and cannot express a legal view on whether the Terms of Management agreement, forming the basis of the initial arrangement with Robinsons as set up by the developer, remain extant, my own view is that they probably do. I would imagine that the sale of this element of the business would probably have provided for the new agent to take on existing clients, at least initially on terms already negotiated. That being the case, and on the understanding that you have not signed a new agreement, I would expect the terms of the original agreement to be upheld. Although you assert that there is no provision for termination under any circumstances, this would be unusual in the extreme and is not my reading of the terms which clearly state that either party can terminate the agreement by giving one quarter’s notice from a Quarter Day. Thus, unless you served notice on 25 March (Lady Day) to withdraw from the agreement on 24 June (Midsummer Day) it might not be unreasonable for the existing agent to levy a charge equivalent to a three-month fee. On the assumption that you have not yet employed a new agent, I might suggest that you consider giving notice to the existing agent on 29 September (Michaelmas) for termination on 25 December and for the agent you select to start then.’ [Submitted July 2016]

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