Page 7 - 1_Letter from Begg 23-3-16 (13pp)

certain works have been cancelled, namely the Terrazzo specialist floor attention, now only one colour internal communal areas and no attention to main front door and furniture”.
While it is true that some of the leaseholders had temporarily withheld payment, the fact is that they did all pay the £2,000. Attention to the Terrazzo specialist floor was an item which a majority of the lessees had voted for and which was part of the agreed specification – at least it was part of the “internals” specification which ultimately appeared on your website. Nevertheless you cancelled this and other work, but appear to have kept the money paid by the leaseholders to have the work done.
Not only did the lessees actually pay the £2,000 you had requested for the reserve, but they also paid in addition for the water tank replacement, and for the communal TV installation. Which begs the question what has happened to these funds which were paid to you on a false premise (ie on the assumption that all the scheduled work would be done) and which have not been refunded? Again this appears, in the absence of a proper explanation, to be fraudulent and I must invite your comments.
It had been agreed by a majority of the tenants as part of the Section 20 process that the common parts would be painted white and taupe. This was consistent with the clear indication you had given to Diego Fortunati on 13 August 2014 when you confirmed to him that his choice of white (for the ceilings and dado rail) and taupe (for above and below the dado rail) could be expected to reproduce as expected without testing. However you subsequently had the common parts of Mitre House painted green and red, which had never been approved by the leaseholders. It was the “funky/edgy” colour scheme you had wanted from the outset, but which was absolutely unacceptable to the majority. Again it is fraudulent, in the absence of a proper explanation, to take the leaseholders’ money on the pretext that you will use it for a purpose they have approved, and then to use it (for a purpose they have not approved) to suit your own taste.
Apparently the money saved by no longer proceeding with a third colour (cost approx £1875 as advised) had been used to pay the annual insurance premium. But an insurance premium is a regular predictable expense which in any well-run management regime should come out of the regular service charge. Your unorthodox methodology, using the alleged savings from a one-off project to pay a predictable and recurring charge, begs the question whether Mitre House would have been insured at all if no savings had been generated on the project.
Following this last e-mail of 21 September 2014 Diego Fortunati wrote to you a very clear and (in the circumstances) very polite e-mail dated 22 September 2014 asking (inter alia) who was actually carrying out the internal and external works? Why had you unilaterally changed the scope of works originally approved, imposing works none of the lessees had agreed (the replacement TV aerial) or which you had excluded (the lift), but now asking for additional funds? Why were you disposing of their reserve funds as if those were your own money? As he correctly stated, Section 20 is there to protect lessees and it cannot be circumvented by changing works and contractors at your leisure. You have no authority to dispose of the leaseholders’ reserve fund for works outside the scope of the section 20 Notice, unless there are urgent contingencies.