Management Company

Unfortunately, despite many attempts to contact the directors (and fellow leaseholders) of Benedicts Wharf (Barking) Management Company Ltd, (BWMC) I have received no response. I sent letters dated 13 July 2022, and again on 12 August 2022, and many requests via MDB Properties for them to contact me. All ignored.

These directors are ultimately responsible for everything that happens with the maintenance, management and finance at Benedicts Wharf. They also have certain legal responsibilities to oversee the company, act the best interests of the company and its members (the leaseholders), to ensure compliance with all applicable laws and regulations. (Fire safety etc.)

It is now clear that the company has become - for whatever reason - undemocratic:

• There is effectively only one person (or entity) in charge since 2017.
• No other leaseholders have been appointed as directors. (I tried. I was completely ignored.)
• There are no meetings. We are never consulted - or even informed - on important decisions.
• We still have to pay service charges and deal with the consequences of these decisions. (Like not being able to sell or remortgage.)

This puts us in a difficult position when it comes to resolving some of the ongoing issues at Benedicts Wharf.

• It is increasingly likely we (the leaseholders) will need to call a meeting to remove these directors and appoint new ones from among the leaseholders. This process requires a good understanding of Company Law and the articles of the company as they now apply to the law, which changed in 2006. Company lawyers are not cheap.

MDB Properties

MDB Properties is the current managing agent appointed by BWMC, and have fiduciary duties: legal responsibilities to manage things properly, comply with applicable laws and regulations, and uphold the terms of the lease. This includes:

• Arranging fire safety inspections and maintaining fire safety. (A legal requirement)
• Preparing, and making available, service charge accounts and other financial records. (A legal requirement)
• Responding to legal notices received on behalf of their client (BWMC).
• Making the client aware of any problems which may affect them.
• Issuing service charge demands in accordance with the lease. On time and accurate, with the legally required format and wording.

In the last year, MDB Properties has not done any of these things.

MDB Properties has stated that the lack of progress on various issues is caused by cashflow issues, i.e. “There's no money to prepare the accounts or fix the fire alarms. That's why it hasn't happened.”

Unfortunately, cashflow problems (i.e. people not paying their service charges, having to pay the block's huge gas bills) does not absolve MDB Properties or BWMC of their legal responsibilities: They still have to comply with the law, even if the accounts are in a mess and even if this means adding that cost to the service charge. Not doing so exposes the directors to potential fines and prosecutions, some of which they are personally liable. This seems to have escaped their attention.

It helps if the managing agent is as transparent as possible with the people paying their bills. Send the occasional update. Tell us about any problems, and what is being done to resolve them. Realistic budgets. Clear service charge accounts, etc.

MDB Properties never send any updates. They have to be chased, usually repeatedly, for any information.

If I was a director on BWMC, I would be absolutely bricking it that my managing agent, MDB, is not telling me what's going on, and is not fixing things like fire alarms - things I'd have a legal responsibility for as a director. Not so, the current directors.

MDB Properties has been reluctant to increase the service charges.

This is understandable to an extent - Nobody welcomes increased service charges. However :

• Since 2017, there has been almost no increase (except for exorbitant insurance bills imposed by the freeholder, which they can do little about).
• This means there is very little money to spare: no reserve funds, and no sinking fund available.
• Eventually, things like boilers, lifts, and fire alarms need replacing. These things are essential and cost a lot. Things break and need expensive repairs. Currently, we would be unable to pay for them.
• They should have been planned for, and money set aside. This has not happened. Such huge costs would have to be paid - all in one go - by the current leaseholders.
• Unfair? Absolutely. Imagine if you rented a car at £100 for a week. Bargain. But when you collect the car, they charge you another £400 because the tyres were worn out and needed replacing: You were just the unlucky customer that had to pay. Sucks to be you. This is obviously unacceptable, but is all perfectly legal in leasehold property law: Pay for anything and everything, regardless of how long you've owned the flat. Previous owners and landlords who bought and sold flats, making a profit in the process, didn't pay a single penny towards the long term upkeep of the building, because of artificially low service charges and lack of reserve fund. The lifts and boiler replacement costs can be somebody else's problem down the line.

I'm willing to accept that MDB Properties did not cause all of the problems. Some things are outside their control.

• They inherited a bit of a mess from the previous managing agent, who suddenly went bust. A pile of unpaid service charges, incorrect utility bills, outstanding maintenance issues…
• The “cladding”/EWS1 issue: Although MDB made the EWS1 problem worse, It's ultimately the responsibility of the developer, Taylor Wimpey.
• The huge increase in energy bills.

However, the job of the managing agent is to deal with these problems. It's why managing agents exist, and what they are paid to do!

Far from resolving the problems, MDB Properties have made things worse, not better.

• I have been making some progress in establishing how to remove MDB Properties and replace them with a new managing agent appointed by the court.
  • I've spoken with some solicitors, and a very knowledgeable and experienced managing agent. They are advising me on the steps to begin this process.