Q&As

The memorandum and articles of a management company state that a special resolution is required to manage a development. No such resolutions have been made. Can the management company demand and recover service charges?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on LexisPSL on 21/07/2017

The following Property Q&A produced in partnership with Helen Galley of XXIV Old Buildings provides comprehensive and up to date legal information covering:

  • The memorandum and articles of a management company state that a special resolution is required to manage a development. No such resolutions have been made. Can the management company demand and recover service charges?

The memorandum and articles of a management company state that a special resolution is required to manage a development. No such resolutions have been made. Can the management company demand and recover service charges?

The management company may in fact be the freeholder or head lessee. This is often the case where there has been collective enfranchisement or in new developments of blocks of flats where, after the sale of the individual units the developer sets up a management company with each leaseholder holding a share and transfers the freehold to the management company. In other cases the freeholder sets up a separate management company to stand between the freeholders and the leaseholder. The shareholders of the management company in that case may be unconnected with the leaseholder.

The second area of uncertainty relates to what is meant by development. We assume that in the context of this question this does not mean development in the construction sense, but means a completed development made up of a block or blocks of flats or estate of houses.

A landlord’s or a management company’s right to demand and recover service charge is governed by the terms of the leases under which the tenants hold their flats and on statutory provisions contained in the Landlord and Tenant Act 1985 (LTA 1985) and Landlord and Tenant Act 1987 (LTA 1987). These

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