Page 2 - 1_Letter from Begg 23-3-16 (13pp)

surprised, to put it as neutrally as I can, by the truculent, rude and dismissive way you 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.
You are not permitted to run a business at Mitre House (although I have evidence to show that you have abrogated to yourself part of the common parts at Mitre House to serve as your office). But even if you were allowed to run a business there, MHML is not and cannot be a managing agent in relation to Mitre House. As the Head Lessor, MHML is a principal. It cannot be both an agent and a principal in relation to the same transaction. It cannot be an agent for itself.
While it is true that specific qualifications are not required to serve as a managing agent, it is not true, as you asserted in your e-mail to Diego Fortunati of 18 December 2015, that a “monkey can be an Agent these days”. The role implies appropriate training and qualifications, relevant expertise, a relevant regulatory authority (such as the RICS or the Association of Residential Managing Agents), a code of conduct, professional indemnity insurance, complaints procedures and so on. I believe you are a graphic designer by qualification. Why should your lessees pay for your (unqualified) services the same sort of charge as they would have to pay for a properly qualified agent? (Indeed you are arguably extorting a higher than market charge). You have no office costs to cover, no personnel costs, no professional indemnity insurance, and no relevant expertise.
It is true that the lessees have – at least to date - paid these assessed charges, but only under duress because MHML is the Head Lessor, and they are thus (ostensibly) at risk of forfeiture of their individual leases if proper service charges are not paid. I very much doubt if lessees will feel minded to pay any further management charges in the future. At least not to MHML. And I very much doubt whether any court would readily order forfeiture on the grounds of failure to pay service charges once they understood the improper basis on which the charges have hitherto been levied and paid.