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21/11/2021

Davidoffed.

Since our post on the FTT decision in Maharaj & Lo Porto v Richard Davidoff (Tribunal appointed manager) LON/00AL/LSC/2020/0111, there have been some developments with regard to Richard Davidoff and his company ABC Block Management.

First, ABC Block Management were expelled from ARMA, following the Tribunal decision and complaints from leaseholders. (It seems fair to say that ABC Block Management appear to have taken quite a pugnacious approach in response, being quoted as saying

There has been a concerted effort by competitors and disgruntled former employees to cause damage to ABC. Substantial damages have been paid so far and further actions are in the process. This is all in the hands of our solicitors and actions are being taken, including advice regarding a challenge to the decision by ARMA.

The reference to ‘former employees’ might shed some light on the wording of this Early Day Motion tabled in the House of Commons. The spokesperson did not, however, reference the Tribunal decision or leaseholder complaints.)

And now there is the First Tier Tribunal decision in LON/00BJ/LRM/2021/0019P 46 Falcon Road, Battersea London SW11 2LR (or rather two decisions, one from September and one from October). This is an unusual case in that it involves a right to manage application by leaseholders of a building where there was already a resident management company (RMC) as a party to the leases.

As far as can be discerned from the decisions, this is what happened.

The building – 26 flats and two commercial units – was completed in 2018. The freeholder’s intention was that the RMC should pass to the control of the lessees, but for unclear reasons, this did not initially happen.

At some point, and in a way that is not clear, Richard Davidoff, (whose company ABC Estates, of which ABC Block Management was a part, were or became the managing agents), was made ‘nominee director’ and effectively took control of the RMC, thereby being the client for his own company of managing agents.

The leaseholders were apparently less than happy about this and/or the management of the building. They applied for the right to manage (RTM) in March 2021. A counter notice was served by the freeholder and head lessor, and an application was made to the Tribunal.

In June 2021, the freeholder and head lessor entered into a consent order admitting the leaseholders’ entitlement  to the right to manage. However, there was a third respondent – the RMC – and in August 2021, Richard Davidoff as ‘representative’ of the RMC filed submissions as to why RTM should not be granted. These were very brief – that the address given for the freeholder on the initial notice was the wrong address. Mr Davidoff said that he had been instructed by a Mr Smither, who apparently spoke for the freeholder (although in what capacity is not clear). Mr Smither had told him to serve a counter notice and that the address was “not one he recognised”. Mr Smither had, Mr Davidoff said, been too busy to devote any more time to the issue.

So, when the matter came before the Tribunal on the papers in September 2021, the position was that the freeholder and head lessor had admitted the RTM, but the RMC, in the person of Mr Davidoff, was challenging the notice on the basis that (and with no further evidence provided) the address for the freeholder in the original notice was wrong. In short, everybody was content with the leaseholders getting RTM except Mr Davidoff.

The September Tribunal found “without difficulty” that the address was indeed the registered office of the freeholder and the notice had been signed for. Against this, was just Mr Davidoff’s statement of what he said “Mr Smither told him, to the effect that he “did not recognise” the address used”.

The right to manage was granted.

However, Mr Davidoff then asked for the decision to be set aside, on the basis that he had requested an oral hearing, not for the matter to be decided on the papers. This was done on 6 October.  It appears that no further evidence or representations on the freeholder’s address was put in.

Then on 20 October, Mr Davidoff told the Tribunal he was withdrawing the RMC’s challenge to the RTM. So, in a further decision, the FTT again confirmed the RTM, to take effect in January 2022.

One imagines that ABC Estates’ prospects of continuing as managing agent are limited.

Perhaps unsurprisingly, the leaseholders made an application for costs under rule 13. This has yet to be determined.

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

10 Comments

  1. Gulliver

    I am informed that the application for Right to Manage was only made necessary because Richard Davidoff (aka Raziel Davidoff) would not give up control of the Residents’ Management Company (RMC). Richard Davidoff had also taken steps to prevent the leaseholders from taking over the RMC – even though this was what was intended in the RMC’s Articles of Association.

    As sole Director of the RMC, Richard Davidoff appointed ABC Block Management Limited as both the managing agent for the building and Company Secretary for the RMC. Richard Davidoff is the sole Director and sole shareholder of ABC Block Management Limited. Needless to say, the leaseholders were unsettled by an arrangement which effectively saw Richard Davidoff paying himself whatever he liked. The leaseholders also took exception to the high service charge costs and poor standard of work.

    After years of having their wishes to take over control of their own Residents’ Management Company being ignored by Richard Davidoff, the leaseholders were left with no alternative but to apply for Right to Manage.

    Bizarre, but true.

    Reply
  2. Johnboy

    I can’t recall another case where leaseholders have had to resort to making a Right to Manage application just to get control of their own Residents’ Management Company.

    One for the history books, I think.

    Reply
  3. Somerville

    I hope that the Tribunal has the good sense to award the leaseholders costs against Richard Davidoff for wasting everyone’s time and resources – not least because it was the leaseholders’ Residents’ Management Company in the first place!

    Furthermore, it appears that the Tribunal originally decided the case on the papers on 30-09-2021 in the leaseholders’ favour. After this though, Richard Davidoff made a procedural complaint to the Tribunal because the decision had been made without an oral hearing. An oral hearing would not have changed the outcome in any event as the decision on 30-09-2021 had already considered all the ‘boiler-plate’ objections and decided them in the leaseholders’ favour!

    The ego of Richard Davidoff truly knows no bounds …

    Reply
    • Gulliver

      The Tribunal did indeed have the good sense to award the leaseholders costs against the Respondent. The Tribunal awarded the leaseholders every penny that they applied for. Reading the costs decision report, it is not hard to see why. The Tribunal was extremely critical of the Respondent/Richard Davidoff.

      Below are the most notable excerpts from the report:

      […] It is also clear that the Respondent, through its sole director Mr Davidoff, used inappropriate tactics to try to prevent the leaseholders acquiring the right to manage and to pressurise them to drop their service charge application […]. Para 17

      […] The unreasonable conduct was quite extreme and was clearly designed to frustrate the Applicant’s legitimate use of the FTT’s process in order to confirm that it had acquired the right to manage the Property. This was not a case of the Respondent/Mr Davidoff raising sensible objections in good faith to the right to manage claim. The unreasonable conduct caused the Applicant to incur significant extra cost, caused long delays to the right to manage being confirmed and clearly also caused much aggravation to the leaseholders involved in the Applicant company. Therefore, it is clear to me that a cost order should be made. […] Para 18

      […] The conduct of the Respondent/Mr Davidoff has been particularly poor, it has caused significant unnecessary delay and anguish […] Para 20

      A link to 7 page FTT costs decision report dated 23-11-2021 is here:
      https://1drv.ms/w/s!AkKBm3fxCVLJfO4adwLsrYR0uvY?e=WrDfnE

      Reply
  4. Ash

    “One imagines that ABC Estates’ prospects of continuing as managing agent are limited”.

    Limited? Do turkeys vote for Christmas? I guess that’s a ‘no’ then.

    Reply
  5. Gulliver

    All leaseholders and others that are serious about having an Independent Regulator for the sector should email their local MP to ask them to sign EDM 672, tabled on 19-11-2021.

    This is because (if I have understood it correctly) the EDM is not only about Richard Davidoff and ABC Block Management Limited but also about “the need for urgent action to implement statutory regulation of the leasehold property management sector outlined in Regulation of Property Agents: working group report, chaired by Lord Best, published on 18 July 2019 [….]”.

    Reply
  6. Johnboy

    “Mr Davidoff said that he had been instructed by a Mr Smither, who apparently spoke for the freeholder (although in what capacity is not clear). Mr Smither had told him to serve a counter notice and that the address was “not one he recognised”. Mr Smither had, Mr Davidoff said, been too busy to devote any more time to the issue”.

    James Edward Smither is the sole Director of both Bredasdorp Investments Limited and Montagu Investments (London) Limited. These companies are respectively the freeholder and head lessee of 46 Falcon Road.

    Reply
    • Giles Peaker

      Thanks. It appears that this information was not provided to the Tribunal by Mr Davidoff.

      Reply
  7. AndrewM

    Not the first time I have heard of an rtm moving against an rmc. Id be interested in seeing how he prevented removal by resolution as the act overrides any alteration of the articles to that effect ,which companies house would reject. Its not unusual for an interregnum if there is no property related qualification to be a member or shareholder ie own a home. One too for looking at the advice on purchase. Rmc is likely the cheapest option as its no fault and as earlier the threat of it usually brings some sense to the affair. Of course having a freeholder head lessor and castrated rmc and rtm is not the most reassuring scenario to buy into. Nice to see existing remedies working in the furore for reform.

    Reply
    • Giles Peaker

      According to the costs decision, he basically just ignored or claimed not to have received any communications about this, or or example calling an EGM or AGM, for a year.

      Reply

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