Why Poor Record-Keeping Is Costing Management Companies in Court

I am instructed in a number of property dispute cases against Management Companies. In some I represent the individual homeowner, and in others I represent the Management Company. 

 

I have been doing this type of work for the last 10 years, at least. There are three published judgments in this area, and I have been fortunate enough to have acted, successfully, in two of them. 

 

A number of issues crop up regularly. 

 

The first is the failure to properly retain and store documents. This is understandable to a certain extent - committee members and directors are not paid for the hours that they put in, they usually have their own work and families, and it is very often a thankless task.

 

However, most Management Companies have poor record keeping. With the increase in use of instant messaging apps like WhatsApp this becomes even more difficult to organise and retain. 

 

One case in particular highlights the consequences of poor record keeping. The owner in question sought permission to install a rigid pergola on his balcony. The reason for this was because items were being accidentally dropped down, sometimes from up to 8 stories high - it was a real danger to him and his family.

 

The Management refused his request; one of the reasons for the refusal was that no other owner had been given permission to do this. Had the Management in question kept its documents in good order, they would have seen that previous directors and committee members had in fact approved 4 other and similar works. The Judge criticised the Management for not having an organised system and that the records were incomplete. The Management lost this case and had to pay my client's legal costs as well as their own. 

 

The second is the importance of implementing a system for receiving applications from owners. In most estates, the Underlease will contain provisions that alterations cannot be carried out without "the consent in writing of the Management Company, such consent not to be unreasonably withheld". 

 

The requirement here is that the Management Company must act reasonably when considering owners' requests. It is essential therefore that there is a fair and clear system under which owners can apply. This is made all the more important given the fact that external works will not just need the permission of the Mangement Company, but also of the Development and Planning Commission.

 

The third is the importance of getting legal advice early on in a dispute. I am currently instructed in a number of cases in which the Management Company has known of the owner's complaints for many months and have only instructed lawyers once proceedings have been issued. 

 

Whilst it may have seemed to those Management Companies that delaying the obtaining of legal advice in order to avoid spending money was a good idea, the reality is that issues which could have been promptly resolved have turned into contested Court hearings, which in turn results in adverse costs orders. 

 

If your Management Company is facing a dispute, or you’re a homeowner seeking clarity on your rights, early legal advice can make all the difference.

For practical, experience-backed guidance on property and estate matters, contact:

Nicholas Gomez
Barrister, Charles Gomez & Co.
📞 200 74998 | ✉️ nick@gomezco.gi🏛️ 5 Secretary's Lane, Gibraltar