QUESTION
Dear Sir
I am one of the 4 directors of a RMC. The directors in our RMC are responsible for the running of the building (hiring contractors, , contacting them for work, paying them, arranging insurance, organising residents’ meetings, etc...) We have a managing agent who are Company Secretary and do not manage the building, they just send service charges demands, deal with the accounts, ask our approval to pay contractors.
At a general meeting of the residents in March, a director was asked to resign from her role by the residents. Which she did. She handed over to me keys and duties she was in charge of.
The managing agent now tells me that although she is not a director anymore, she is still a member of the management team. She can make decisions, be responsible for the running of the building, but has no legal responsibilities. They also tell me she has voting powers on certain issues such as works to be done, costs, budget.
I am very surprised with this and I would like some clarification on this if you can.’
Name withheld
ANSWER
It depends whether she has been formally authorised by the board to undertake this role? If so, there is nothing improper in that. Indeed, businesses do this all the time (for instance, the appointment of an operations manager). Provided she is not acting beyond her delegated authority, there is no reason for her to attract any liability as a director, unless she is actually acting as a director (and note that the Courts look at the role a person performs, not the name they are given). However, if this person has not been formally delegated any responsibility (as I assume), then the board should forthwith stop her acting as such, as she may take steps that bind the RMC (e.g., agreeing a contract). Finally, unless she is truly a director, she has no right to vote at board meetings.
James Naylor, Solicitor - Crabtree Property Management
