Page 2 - 8_PBC to Begg OCR_8-4-16 (38pp)

have chosen to deal with requests from your leaseholders, including Mrs Hillgarth. It seems to me that on the evidence of that correspondence alone the Tribunal would conclude that you were not a fit and proper person to manage the block and that a properly qualified professional managing agent should be appointed. However I have set out below some more serious and substantial issues which we will also be inviting the Tribunal to consider.
Management Charges
The Tribunal would certainly be very concerned to discover that since January 2012 MHML had been imposing, as part of the overall service charge for the block, a management charge to its lessees, and this despite the fact that no Managing Agent has been appointed.
Under Clause 13 of Schedule 7 of the various Leases (including Mrs Hillgarth’s lease) you are obliged to employ a firm of surveyors or managing agents “if considered to be requisite”. It is clear that MHML, as Head Lessee, may employ surveyors or managing agents and charge the lessees for the cost of engaging them. Equally MHML is entitled to take the view that it does not need to employ surveyors or managing agents. However this does not mean that MHML itself, as Head Lessor, is entitled to charge for its own time, or rather for the time incurred by its own directors, in doing (or attempting to do) the work that a proper managing agent would have done. Nor to call itself a managing agent and to charge the leaseholders as though it were one.
We are of the understanding that as Head Lessee we are also the Intermediate Landlord and the Service Charges can also include the costs of management, either by the landlord or by a professional managing agent.
Clause 13 of Schedule 7 of all leases appears also to state that the Surveyors or Managing Agents may be company connected with the Lessor or may be within the same group of Companies.
We find it very difficult to understand how we or anybody else could devote the time and effort in running and maintaining Mitre House on a 24/7 basis [two directors live on site and one of which, myself, is retired and available 24/7] unless there is some fair financial recompense.
We have always referred to ourselves in most if not all correspondence as Management. Our fees are always referred to as Management Fees both on prepared budgets and in year end final accounts. This, I agree is splitting hairs, as indeed our company is called Mitre House Management Limited and you [Mrs Hillgarth] are inferring that the both, Managing Agent and Mitre House Management Limited are the same in law; Managing Agents.
We, with respect, disagree in principle as we are charging a fee for our time, [as you refer], but not on an hourly basis as we considered that to be more contentious, but following form from our previous Agents, a set fee, which we call Management Fees. Unlike the Service Charge account which can be under or over subscribed at year end, our fees for time spent on the normal regular day-to-day running of Mitre House do not change accordingly. They are advised in pre-year Budgets and do rise proportionally year by year [but not during our first three years] as indeed did our previous Managing Agents’ fees, but ours by less than our previous Managing Agents, and same for some regular items of expenditure in the Service Charge account – Accounting as a prime example.