Building contractor with outstanding management fees

oil painting

hi,i hope this is the right place to post this topic,i am on a residents commitee in my estate which is 2 years old,we had an issue with residents not paying their fees and the management company issued solicitors letters to the people who were refusing to pay.... the fees are now coming in...the problem now is that we stil have a huge amount of outstanding fees from the building company who has stopped building and there is management fees of 19,000 outstanding from them,we are paying our fees but our services get cut because we cannot afford to pay the cleaners,bin men,gardeners etc.....

we spoke to our management agent about it,and we asked could we send a solicitors letter to the builders(who are the current directors of the estate) and we were told that it is not feasable to issue a solicitors letter to the company because it would be like sueing themselves??

has anyone any advice as to how we can handle this situation?? thanks in advance xx

Ste.phen

If the builder have a majority share of the management company there could be trouble there (i.e what the agent said, can't really sue themselves), but if the builder only have a minority share, they're no different than some random apartment owner not paying, except that they owe a lot more.

Actually, you could be OK to send the letter even if they have a majority share, I presume it's in the management company's remit (memorandum of association, maybe?) to collect fees from ALL owners, regardless of the conflict of interest?

Jo King

A company is a separate legal personality from its shareholders. A company suing one of it's members is not suing itself. It is suing a distinct legal personality. The difficulty is that the builders may have appointed the managing agent and solicitors to the company. It may be necessary to appoint new people to these positions in order to progress matters.

Victor

If you don't get a quick response from the builder, get your own solicitor amongst the independent owners. Potentially sue the builder for non-payment and the directors for not doing their jobs.

I'm not sure of the correct name, but if the builder has a majority share, sue the builder as a shareholder for oppressing minority shareholders.

oil painting

thanks guys..am i allowed mention the builders and the management company in question?

Victor

I wouldn't. For all we know the management agent made a mistake and the builder owes nothing.

Don't name the management agent either.

oil painting

ok...best not then....we do have written confirmation from the management company that the 19,000 fees are outstanding from the builder,we are heading into our new year for our budget and we fear that if we let this issue go on any further they will just keep on not paying,and maybe we will be left with the debt at a later stage....there are people on the committe seeking advice on this matter,i thought i would try here for another perspective on it,thanks for replying xx

Victor

If you fear the builder might go bust or do a runner - go to solicitor ASAP.

antoinolachtnai

Check your facts here. Are we talking about vacant units? The builder does not necessarily have to pay a charge on vacant units. The builder isn't bound by the lease, unless he actually signed it, which he won't have unless he's a mug. Lots of people want to convince themselves that he does, but he doesn't.