Posted by dc on December 26, 2007, 11:48 am, in reply to "Re: Managment fees from R&R"

Thank you Andy and Claire for your responses. Please be aware that I am recommending that residents withhold the lift levy payment, not their service charges as you have interpreted. There is currently no legal basis for the demand of the levy as the section 20 process is not complete. The purpose of this process is to allow a period of consultation and to review tenders for the work. Since this hasn't been done yet, demanding immediate cash from leaseholders is wrong. Andy came up with a list of reasons why finance was not possible. One point was that shareholders would be disadvantaged by the use of a secured loan. This is not true. Indeed shareholders are disadvantaged at the moment because the charthouse is devalued by the fact that the lift is faulty. Taking a secured loan does not affect shareholder value because the debt of the loan is balanced out by the value of the asset purchased. Can I ask if any of the directors have experience raising capital for business? That's not a jibe, its just that in Andy's first response, he mentioned a bank loan. It is a common misconception by people who have not started a business that banks loan money for purchases of major assets. By and large they don't, rather leaving this to specialist lenders who know the market for the assets they are lending against. Over 90% of businesses finance assets this way and I don't really see that bw should be an exception. Can I please receive copies of the minutes of board meetings where offers of finance were solicited and their subsequent offers debated? I have started and run a business for 12 years that eats it's way through high value assets, and perhaps can offer some pointers if I know what you have looked at so far? Clearly there is more research to do on this, not least to agree what work gets done by whom and for how much. Until at least this is resolved, I cannot see how the directors can push forward with the demand for the lift levy. I therefore strongly urge them to withdraw this demand in order to avoid an unnecessary head on collision with leaseholders and shareholders. dc

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