TP1 form and Management Company

[NordicNoir]

Hi, we have bought a house on a small estate where the roads, sewers, communal land and service cables are owned by a management company. The TP1 states that we must pay a share of COSTS INCURRED each year spent on these items. We are also required to become members of the management company. Nowhere in the TP1 does it mention that we are required pay into a sinking fund for FUTURE costs.

The Objects of the management company includes the following clause:

“create and maintain any capital reserves and management funds of any kind in order to contribute and pay towards all fees, costs and any other expenses incurred in the implementation of the objects of the Company and to require the Company's members to contribute towards such funds and reserves at any such times, in such amounts and in such manner as the Company may determine and to invest and deal in and with such moneys not immediately required in such manner as the Company think fit;”

Does this mean that the company could just decide to start a sinking fund and demand that we pay into it? Does the TP1 take precedence over the management companies rules?
Thanks for any clarification!

[atticus]

The TP1 details the obligations you have signed up to, and in my opinion that prevails.

Did your solicitors give you advice on all this when you bought the property? Have you looked at their report on title?

[NordicNoir]

The TP1 details the obligations you have signed up to, and in my opinion that prevails.

Did your solicitors give you advice on all this when you bought the property? Have you looked at their report on title?

I have checked their report on title and they only mention that the Memorandum and Articles of Association are enclosed, no comment on any clauses.

They have not asked for sinking fund contributions and are probably unlikely to, it was just that the clause seemed a bit OTT. It seems weird that a company could ask its members to stump up any amount, at any time, for any purpose! Would the clause likely be considered unfair and unenforceable in court?

[atticus]

I doubt it.

[NordicNoir]

I doubt it.

Apologies Atticus, I am not sure if you mean that they would probably say that the company can ask
for funds or that they cannot? Many thanks for your help!

[atticus]

It was an answer to the question that you asked, namely "Would the clause likely be considered unfair and unenforceable in court?"

[NordicNoir]

It was an answer to the question that you asked, namely "Would the clause likely be considered unfair and unenforceable in court?"

Sorry, I was adding confusion in reading your reply, probably because it was not the answer that I was hoping for!

I was hoping for a kind of ‘that clause is far too wide and unreasonable, it is unlikely to stand up in court! Oh well, hopefully they will never try to demand any extra funds! Many thanks for your help