Q: We purchased the freehold for our five blocks and 36 maisonettes, in February 2002. Every maisonette owner received one equal share in the company. Since incorporation, a volunteer Board of Directors is dealing and managing all maintenance and administrative work.
We the present Board of Directors discussed and agreed in a recent meeting that it is most unlike to continue, because of the increasing work load, retiring Board members that we feel are difficult to replace and an ongoing issue dealing with uncooperative shareholders.
We are going to hold an AGM would like to inform the shareholders that we will vet and appoint a Property Management Company (PMC).
To do this do we need a mandate from the Shareholders?
FPRA Director Shula Rich replies:
As a general rule it is up to the Directors to appoint a PMC. However, looking at the lease – which I’ve read through several times – I can’t see where the company can re- claim it’s admin costs from the service charge. So I’m not sure if the service charge will cover the Agents expense
I’m not an expert at reading leases. Can we perhaps forward this as an interim reply :
– there is as a rule no need to consult the lessees on appointing a PMC providing the contract is for no more than a year at a time (or it would need S20 consultation)
The Directors can make the decision providing they are confident the admin expense can be added to the Service Charge.
[Submitted May 2017]