Flat Living Issue 11 by Belinda Thorpe

AppOInTInG An AGenT What to ask

RIGHT TO

COme OuTsIDe

avoid the pitfalls

space to groW

manage

Hyper-fast BROADBAnD

fibre optics explained

T HE M AGAZINE FOR L EASEHOLD A DVICE

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Win

£50

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Audley Mote Village

S U M MER 2012

£2.50 I 11 ssue

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Specialist residential block management servicing London and the South East.

For more information call 020 8296 0181 www.jjhomes.co.uk

contents 7

Welcome

Lesley Davis introduces a new campaign to promote the use of specialist solicitors

NEWS 9

We report on proposed changes to service charge accounting, the new energy code and the LEASE conference

lifEStylE 14

Audley Retirement opens its new Mote House village in idyllic surroundings in the Kent countryside

16 18

Come outside

23 25 27

28 29

paul Robertson

letters

interview

Peverel announces the winners of its first retirement design competition

Graeme Mann argues the case for better use of outdoor space

ARMA Guidance

40 42

Why the clamping ban won’t help flat owners

John Williams

John adds his voice to those calling for a better regulated leasehold sector

Bruce Maunder Taylor answers more of your leasehold questions

What’s the difference between the role of lessee and shareholder or member of an RMC?

ARMA directory

ARMA member listings

find an agent

ARMA members advertise their services

fEAtURES 47

Appointing an agent

Right to Manage

insurance Belinda Thorpe explains the insurance implications of home improvements

Bob Smytherman

Lesley Davis talks to Jonathan Smith, managing director of Trinity Estates

ARMA surgery

Maintenance

opiNioN

Block management, fire safety and banks’ compensation schemes

ADViCE Kevin Marshall sounds out the problems associated with wooden floors in flats insurance Adam Saint asks why ‘fuse boxes’ for water systems aren’t yet mandatory in flats technology Hyperoptic explains the benefits of its hyper-fast fibre broadband services

Paul tackles the thorny issue of agent’s commissions

ARMA

Escape to the country

young designers

The benefits and pitfalls of appointing an agent: why do it, how to choose the right company and what to do if it all goes wrong.

What’s the process for exercising your right to manage, what’s involved and how to get the best out of RTM, plus advice on your responsibilities and obligations.

END NotE 61 62

Company news and appointments the Flat Living crossword competition

Summer 2012

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Flat Living

Summer 2012

S UMMER 2012 Advertise And subscribe

For advertising enquiries call 0845 257 6374 or visit www.flat-living.co.uk lesley Davis Editor editor@flat-living.co.uk Warwick smith Consultant Publisher warwick@flat-living.co.uk Neil Porteous Commercial Director neil@flat-living.co.uk sue hodnett Subscriptions Administrator sue@flat-living.com Published by www.flat-living.co.uk Ltd 5 Addisons Way, Lilleshall, Newport TF10 9HH tel 0845 257 6374 Fax 0845 257 6319 email info@flat-living.co.uk

Although every effort is made to ensure the accuracy of material published in Flat Living Magazine, the publishers cannot accept responsibility for the veracity of claims made by contributors or advertisers. Contributors and advertisers must accept full responsibility for the material they submit for publication in particular for ensuring that they do not infringe copyright, intellectual property rights or trademarks. Copyright for all materials published in Flat Living Magazine remains with the publishers. Any business advice is given for guidance only and readers must consult relevant bodies before acting on any advice given in the magazine. Flat Living Magazine is published independently of any trade or professional body and retains editorial control over all articles that appear in this issue. The Journal for Residents’ Management Companies supported by ARMA

Issue 11 flat-living.co.uk

Make the best of your block: inside and out WelcoMe to the suMMer issue of Flat Living. Warmer weather has been a long time coming this year, so in celebration of the fact that the country has finally been freed from the hosepipe ban - and in hope of sunnier days ahead – we take a closer look at communal gardens. Turn to pages 18-19 for more on making the most of the green space you share with neighbours, from appointing a garden designer to growing your own fruit and veg. Also in this issue we focus on the right to manage (see pages 53-59) and on appointing an agent. We take readers through the RTM process and explain what flat owners’ rights and obligations are once they have decided to take the plunge. RMC directors with an active role in management may be interested in two free guides we have produced to help leaseholders, looking at health and safety and fire risk assessments. Email us at sue@flat-living.com for your copy. In large blocks, the task of self-management is often too much to take on and a professional manager is required. On pages 47 to 51 we take a look at the ins and outs of finding the right agent to meet your needs. Also on pages 33-35 Jonathan Smith, managing director of Trinity Estates, gives an insight into what he believes is key to building a successful property management business. An issue that is at the root of many leasehold disputes is the fact that flat owners don’t always understand their lease. A lease is a complex legal document that should be explained in simple terms to homebuyers from the outset. So Flat Living is campaigning to promote the use of specialist conveyancing solicitors who are fully versed in the small print and can give buyers a better understanding of the way leasehold works. See page 10 of this issue for more. Seasoned flat owners can also do their bit by passing on a copy of Flat Living to neighbours moving in to a flat for the first time. We aim to fill our pages with useful advice and information that should help unravel the complexities of leasehold life and are offering new readers a halfprice subscription for the first year. So pass it on. lesley Davis

Editor

To ensure you receive every copy of Flat Living magazine and to receive news updates, please subscribe at www.flat-living.co.uk/ products/subscribe_to_flat_living.htm

Flat Living

Summer 2012

You can now get Communal TV Solutions for your entire portfolio of flats Finding a cost-effective Communal TV Solution for your flats has just got easier

Great subsidies available with our Shared Dish

No matter how big your portfolio, our Specialist Installation Team can find the best Communal TV Solution – and install either our Shared Dish or Integrated Reception System (IRS) in all your blocks, at the same time. What’s more, great subsidies are available on our Shared Dish solution.

Your own Account Manager – looking after you from start to finish As soon as you get in touch, you’ll be assigned a personal Account Manager who’ll send you a free estimate and follow up with a free survey. They’ll offer expert advice and support throughout the process – so your installation will be as hassle free as possible.

Benefits of a Shared Dish:

Benefits of our IRS:

One dish can supply Sky TV to an entire block

Flexible financial leasing options available

Fantastic subsidies available, dependent on the amount of residents that register for Sky

Platform-neutral solution – so your residents can choose their own TV provider

We’ll talk to your residents for you No need for individual minidishes – and we’ll remove any existing dishes as part of the service

Discreet installation, quality guaranteed by Sky CCTV option for added building security

To learn more about how we can provide the right Communal TV Solution for your blocks, simply get in touch with us today. We’ll get the process started with a free, no-obligation, estimate and free survey.

Don’t miss out – register today

For a free estimate and free survey

go to sky.com/managers to register or

call 08442 411 678

Believe in better

A survey will take five working days between booking and completion dates. Shared Dish Subsidy: Only available on a Shared Dish system. The value of the subsidy given will depend on how many residents in your block register for a Shared Dish. IRS: The IRS maintenance and warranty will expire on the one year anniversary of the transfer of the title in the equipment to you. If the system is leased, 5, 10 or 15 year options are available depending on the terms of the lease. Sky TV: Sky TV subscription required for Sky digital programming. Packages currently £20 – £53 per month (pm). Sky box and set-up costs may apply. Two satellite feeds required for full Sky± functionality. Switchover Area: Please see digitaluk.co.uk to check when your block will be affected by the digital switchover. General: Sky±HD box must be connected to a fixed telephone line for 12 months. Minimum Sky TV, Sky±, Sky±HD subscriptions are 12 months. Further terms apply. Sky±HD box prices may vary in flats. Information only applies to residential customers in the UK, Channel Islands and Isle of Man. Lines will be open 9am – 5pm, Monday to Friday. Calls cost 5.1p per minute (plus 13.1p connection fee) for BT customers. Calls from other providers may vary. Information correct as at 2 December 2011.

News Flat Living

Energy code Lease campaign Conference

9 10 11

w h at ’S h a p p e nin g in l e a S e h o l d S ec t o r

code of Practice

leaseholders let down by new energy code Thousands of residential leaseholders could face hefty backdated energy bills despite a new Code of Practice that is supposed to protect them, ARMA has warned. The new Code, issued by the Energy Retail Association (ERA), is supposed to protect small businesses – including leaseholder run Residents Management Companies (RMCs) - from crippling backdated energy bills but completely fails to do so, according to the Association of Residential Managing Agents (ARMA). ARMA believes that RMCs will be left particularly vulnerable, saying, “These micro-businesses are run by volunteer leaseholders purely to manage the communal areas of their homes and do not make a profit. Unexpected bills, often the result of energy companies misreading meters, can run into tens of thousands of pounds and are especially damaging to the leaseholders who must then foot the bill through their service charge payments”. Under the Code, energy companies commit to limit backdated bills to three years for electricity and five years for gas. ARMA says the limit should be

Mary-anne Bowring: critical of code one year, the same as for domestic customers and that the Code should be compulsory - so far it is voluntary and not all energy suppliers have signed up. ARMA chairman Peter Dening, who is a partner at Pennycuick Collins in Birmingham, said: “We are very disappointed that the ERA has not gone further to protect leaseholders from the disastrous effects of backbilling. ARMA has campaigned for this Code of Practice so that

energy companies will treat the communal areas to blocks of flats like the domestic premises they are. At a time when many families are struggling with fuel poverty, it is simply not fair that flat owners could still be billed for charges going back five years.’’ Mary-Anne Bowring, Chair of membership at the Institute of Residential Property Managers (IRPM) said: “Leaseholders should not be punished for the mistakes of energy suppliers. In these tough economic times it is simply not acceptable that residents can receive unexpected bills for thousands because their supplier has misread a meter. This is why we are backing ARMA’s call for a Code of Practice to protect leaseholders from the crippling effects of such mistakes and avoid unnecessary debt”. ARMA estimates that for around 60% of the blocks of flats in England and Wales, the effective landlord for supplies to communal areas is an RMC. The organisation recently agreed a protocol with ERA to protect leaseholders from power disconnections to the communal areas of their property which can be downloaded from the ARMA website at www.arma.org.uk.

the prestigious Walpole Mayfair building

Price record

Mayfairstill hasMonopoly onprices Despite the continuing slump in UK house prices, the sale of a penthouse apartment on Arlington Street in London’s exclusive Mayfair recently set a new price record, according to Property Week magazine. The 3,100 sq ft apartment, which also boasts a substantial roof terrace, was sold to a British buyer for just over £14 million. At £4,542/sq ft, the apartment easily beat the £3,800/sq ft record previously set for this part of London. The Grade II listed building, formerly the home of eighteenth century Prime Minister Sir Robert Walpole, has been redeveloped by Oliver Burns. Located opposite the Ritz the building comprises five luxury apartments. In contrast to the national trend, Property Week reports that prices in London’s Mayfair and neighbouring St James’ rose by 11% in the 12 months to February 2012.

consultation

proposed changes to service charge accounting The Government’s Urgent Issues Task force has consulted on proposed changes to the accounting procedures for Residents Management Companies when they deal with transactions for flat owners. In May, a ‘draft abstract’ was issued in response to a request from the Institute of Chartered Accountants in England and Wales to look at the way service charges are dealt with in the financial statements of RMCs. This abstract dealt with: n Helping RMCs recognise which transactions need to be included in financial statements

Flat Living

Summer 2012

by identifying whether the RMC is acting as principal (landlord) or agent. Guidance on this is provided in FRS5 and in most cases the RMC is likely to be acting as an ‘undisclosed agent’ on behalf of flat owners. n Helping other people entering into a financial agreement with an RMC – including flat owners and creditors – understand the RMC’s position; n Confirming that money collected as service charges needs to be held in a statutory trust on behalf of residents; and n Protecting flat owners and anyone else using RMC

all change for rMc accounting financial statements by disclosing where information can be found that details the transactions made. The consultation closed in June and the intention is that

any changes made to the rules on service charge accounting will be applied to accounting periods ending after 31 December 2012, although early adoption will be permitted.

News design award

award-winning penthouseavailable forrent

a glamorous award ceremony, held in nottingham’s newest £1m-plus penthouse apartment in may, celebrated the efforts by six design students from all over the country who were shortlisted for the national design academy’s (nda) recent competition. the students were asked to design the interior of the property at nottingham’s prestigious river crescent development from the layout and furniture right down to the accessories and final touches. the competition was won by 21 year old grace moulder, an interior design student from darlington who scooped a £3,000 cash prize and the chance to kick start her career in style. the evening also celebrated the luxury penthouse now being available to rent. boasting panoramic views of the river trent, nottinghamshire countryside and both of the city’s football stadiums, it is hoped that a local sports celebrity may take on the lease. the last big profile name to rent one of the penthouses was sven-göran eriksson during his brief stint as director of football for notts county. the national design academy (nda) is part of the nda foundation, a not for profit organisation that is committed to providing further and higher education access to all, regardless of their educational background. nda is also the uK’s largest interior design school, offering a wide variety of accredited diploma, degree and masters courses in interior design.

campaign

Flat living launches ‘Know your lease’ campaign

Flat Living is launching a campaign to encourage flat owners to use properly qualified and experienced professional advisers. Our ‘Know your Lease’ campaign, is all about getting practical, straightforward advice from a leasehold specialist solicitor from the start of the home buying process. A properly qualified expert with knowledge of leasehold can explain the finer points of your lease to you, guide you successfully through the homebuying process and help you avoid any unexpected problems cropping up in the future.

Understanding leasehold

Leasehold is a form of property ownership that dates back to the feudal system. Leases are often complex and written in hard to understand legal language. This

means that leaseholders are often left confused and don’t always know their rights or obligations as flat owners. Most flats in England and Wales are owned under ‘long leases’( longer than 21 years) with the flat owner effectively renting the property for the length of time specified in the lease from a freeholder who owns the building that houses the individual flats. The lease is the legal document that outlines every aspect of the relationship between the leaseholder and the freeholder, including the rights and obligations of each of the parties and the way that service charges will be divided between the flats. Leasehold conveyancing is more complicated than freehold conveyancing and attracts higher fees. A solicitor must check that the lease a flat buyer is entering into has been correctly drawn up

and does not include terms that may be unacceptable either to the purchaser or the mortgage lender. The solicitor must also check the details and accounts of any management company or tenant’s association and the way your prospective property is managed.

ask an expert

To promote a better understanding of leasehold among flat owners, Flat Living is emphasising the importance of understanding the lease you are buying and getting the right advice from the start. Knowing your lease means - when professional advice is sought - always using a solicitor with expertise in the leasehold market. Flat Living is calling on organisations dealing with prospective flat owners to promote the use of appropriately qualified

professionals to their clients, for example estate agents promoting the use of solicitors that specialise in leasehold. This will help make leasehold a more transparent form of tenure to the benefit of everyone who lives in a flat. Other organisations are already working towards this, with the London Assembly’s Planning and Housing committee calling for conveyancing solicitors to provide more information upfront to leaseholders and the Devon and Somerset Law Society recently updating their pre-contract enquiries form to ensure all the relevant information required is available to flat buyers and their solicitor. At Flat Living we would like to see all Law Societies and other organisations around the country following suit, ensuring that all flat owners have access to solicitors who specialise in leasehold conveyancing. Summer 2012

Flat Living

News Lords debate

ARMA welcoMes cAll foR RegulAtion, educAtion And tRAnspARency

Calls by Baroness Gardner of Parkes for regulation of managing agents, better education of leaseholders and transparency of service charges have been welcomed by the Association of Residential Managing Agents (ARMA). These were key points raised in a debate about the leasehold sector in the House of Lords in April. ARMA’s chairman Peter Dening commented: “ We fully support Baroness Gardner’s call for regulation of managing agents and simplification of the law in this area and are disappointed at the government’s response. However, we are currently working on our

peter dening: educating leaseholders own enhanced self-regulatory regime to further raise standards in the industry and provide greater protection for leaseholders.” ARMA is already addressing some of the other concerns raised by Baroness Gardner

including demanding strict entry criteria from prospective ARMA members. All members are required to sign up to an independent ombudsman scheme, have a published complaints procedure and demonstrate they are holding service charge money in the correct and legal format. “We also believe in educating leaseholders and continue to provide free guidance on their rights and responsibilities including a best practice guide on service charge accounting to help improve transparency,” said Peter Dening. oLympics

lAsting legAcyof newhoMes foRlondon

with weeks to go until the opening ceremony of the london 2012 olympic games, all eyes are focused on the new postcode of e20 in east london. once the games are over, from 2013 the area known as east Village will provide homes for more than 6,000 people. the olympic delivery Authority aims to create what it describes as “a lasting residential legacy” in the area, although the asking prices of homes will not be known for some time. the new neighbourhood will boast 3,500 new homes, most of which will be flats. these will be a combination of properties mainly for private rent and affordable homes either to rent or buy. the area will also include education and health care facilities, parkland, and public space as well as more than 30 shops, cafes and restaurants. during the games the flats in east Village will be home to the 16,000 athletes and officials from 200 countries coming together for the first olympics to be held in london since 1948.

Flat Living

Summer 2012

new rics president, alan collett events

leAse hosts tenth AnnuAl confeRence Two hundred people attended the tenth annual conference held by the Leasehold Advisory Service (LEASE) in London in May. Alan Collett, then Presidentelect of the Royal Institution of Chartered Surveyors (RICS) and the first from the residential property sector for almost four decades, gave the keynote address. He stressed the importance of the RICS as a consumer-focused regulator for the surveying profession. The address was followed by presentations and question and answer sessions from Ian Potter, Operations Manager for the Association of Residential Letting Agents (ARLA) on the effect of leasehold tenure on selling property and Emma Bulmer of the Department for the Environment and Climate Change on the implications of the government’s Green Deal for leasehold. Andrew Belton of social landlord Notting Hill Housing highlighted the hard work and continuing challenges for a consumer focused housing association providing shared ownership homes. He was followed by Professor James Driscoll who reviewed the ten years since the Commonhold and Leasehold Reform Act 2002 and in particular the Greater London Authority’s recent review of service charges in London. Both morning and afternoon sessions included themed discussions on valuation, legal developments, buy-to-let and serving leasehold customers. Delegates shared their own experiences and raised issues of particular interest. Speakers at LEASE conferences consistently include some of the best thinkers in residential leasehold, representing property owners, managers, valuers, estate agents and lessees. For advance notice of other LEASE events including next year’s conference date, go to www.leaseholdadvice.org.uk

News Insurance

brokers Challenged to ‘up their game’ for flat owners

church repairs can prove costly legal

ChanCel repair liability limited from 2013

From 13 October 2013, chancel repair liability will no longer apply to flats and houses purchased in England and Wales, unless a notice is registered against the property in question at the Land Registry, says lawyer CMS Cameron McKenna. Many homeowners may not be aware of this liability, which is an ancient financial charge that may be levied against them to pay for repairs to the chancel of their parish church. Chancel repair liability was historically applied to land owned by rectors. When land was sold following the dissolution of the monasteries in the sixteenth century, the charge passed to the general population and still

applies to many homes around the country. In 2003, a landowner was forced to pay a repair bill of around £200,000 plus costs when they contested the liability. Because it is hard to tell whether or not the liability will apply to a property, due to incomplete parish registers, homebuyers are generally advised to have a chancel repair search carried out and to take out insurance cover to protect them from an unexpected and potentially hefty bill if liability is identified. However, all this will change next year when the law changes and the right to enforce chancel repair liability will no longer constitute an ‘overriding interest’.

This means that after 13 October 2013, homebuyers in England and Wales will not be affected by the liability unless it is protected by a registered notice. However, CMS Cameron McKenna warns that where a notice or caution has been registered, the right to claim chancel repair costs from a property owner will permanently affect the land. Land acquired before 13 October 2013 will also continue to be affected indefinitely. What this means in practice is that anyone buying a new home after that date will be saved the expense of a chancel search. If the liability to pay towards chancel repairs exists, in future it will be shown against the property’s title at the Land Registry.

lVT decIsIon

‘Care of the agent’ address not enough rules lVt

All service charge and ground rent demands must have the address of the landlord clearly marked on them according to a recent decision in the Upper Chamber of the Lands Tribunal. An address simply specifying ‘care of the managing agent’ is not acceptable. In a recent member circular, ARMA reports on the case of Beitov Properties Limited v Elliston Bentley Martin (Ref. LRX 59/2011), pointing to the importance of the ruling for leaseholders and their landlords. The case concerned a landlord who had taken a lessee to the county court for payment

Flat Living

Summer 2012

of service charge debts and the matter had been transferred to the LVT. The lessee did not appear at the LVT and the LVT found the sums demanded reasonable but then also decided that the demands made were not valid because they did not contain the address of the landlord. This was not a point that the lessee had raised at any time. The demands sent by the landlord’s agent included a statement that the address for service of notices under S48 of the Landlord and Tenant Act 1987 was ‘c/o of the managing

agent’. This was found to be unacceptable and the Upper Chamber decision stated that “The purpose of the requirement in section 47 to include in any demand the name and address of the landlord, in my judgment, is to enable a tenant to know who his landlord is, and a name alone may not be sufficient for this purpose. To provide an address at which the landlord can be found assists in the process of identification”. To read the full decision go to www.landstribunal.gov.uk/ aspx/view.aspx?id=852

Midway Insurance Services Ltd is challenging other insurance brokers to improve the services they offer in the blocks of flats market with the launch of their updated flats product “Ultimate Flat Owners”, underwritten by Aviva. Paul Robertson, Midway’s Managing Director explains that the buildings insurance market for blocks of flats is one of the few remaining sectors that fails to offer its end customers competitive choice. Due to the unique nature of blocks of flats, the insurance policy is usually arranged by the freeholder and most flat owners have little choice or influence in the placement of their buildings insurance, despite the fact they pay the premium. “It’s time for other brokers to up their game,” he says, adding that they need to improve in three specific areas by: n improving the level of advice they give; n understanding the needs of their clients and selling them appropriate products; and n improving the claim handling service they offer. Paul believes brokers have a responsibility to ensure flat owners receive a fair deal. Too many policies are sold on price alone, he says, with insufficient consideration given to the product and how it suits the need of flat owners, who are the ultimate beneficiary of blocks of flats buildings policies. Phil Bayles, Broker Distribution and Performance Director at Aviva says: “We are delighted to be supporting Paul and his team at Midway with the launch of their new ‘Ultimate Flat Owners’ product… We look forward to building on our long running partnership with Midway to continue to deliver a high value, great quality offering.”

Paul robertson

Lifestyle Flat Living

at h o me w i t h l e a S e h o l d

Escape to the

country Audley Retirement Villages has just opened the doors of its latest development in Kent. FLAT LIVING takes a look inside

IN APRIL, Audley Retirement

Villages opened the doors of the main house at its new Mote House development near Bearsted, Maidstone for the first time since it was built in 1797. Situated in the heart of Mote Park, the historic Grade II* listed Georgian house, which has been sympathetically restored, will house 14 luxury apartments and the Audley Club. The club’s facilities will include a bar and bistro, restaurant, gym, swimming pool and library. People from the local community aged 55 and over will be invited to join as well as residents. The apartments at Audley Mote House are available to view by appointment. The show apartment, which boasts a number of original period features, was created by interior designer Carol Gearing. Having been in development for five years, the renovation of Mote House is due for completion this summer. The Mote House Village will ultimately consist of 100 houses, cottages and apartments, which are available to purchase by anyone over the age of 55. There is currently a mixture of properties for sale including 12 remaining apartments available in the main house. The renovation, which includes the design of the surrounding grounds, has been undertaken in accordance with strict

the show apartment was designed by interior designer carol gearing guidelines to ensure that the house retains its original character. Original features of the house and the estate include: n The clock tower from the original medieval fifteenth-century mansion

Fascinating Facts The house was designed by Daniel Asher Alexander. He also designed Maidstone and Dartmoor prisons, although his first commission was to widen the Medway Bridge in Rochester In 1531, Henry VIII and Anne Boleyn visited Mote Park before their marriage. In 1799, King George III and Prime Minister William Pitt visited the property to inspect around 3,000 assembled troops of the Kent

Maidstone from its original Volunteers, a local militia home in London following trained to defend the country the First World War. from a possible invasion by In 1941, Mote House Napoleon 1 of France. was commandeered by Between 1932 and the British Armed Forces 1941, Mote House as a headquarters (known then as “The and training facility Mote”) was home during the Second to the Caldecott World War. It was Community (now subsequently the Caldecott used as offices Foundation), for the Ministry a nursery of Agriculture, organisation that had relocated to Daniel Asher Fisheries and Food. Alexander

n Original stables n The Old Brew House n Georgian water pump n Ice houses n Original staircase in the main house n Georgian steps within the grounds

overlooking the Len Valley. Much of the renovation work has been undertaken by employees from Kent. Once the main house has opened, Audley will continue to recruit locally, particularly for guest services including restaurant staff, bar staff, health & fitness staff. Audley has been building and managing luxury retirement villages for more than a decade. The company’s aim is to enable residents to live an independent and healthy later life in their own homes, in a like-minded community with access to flexible care packages and a wide range of leisure facilities via the on-site club. Summer 2012

Flat Living

Mote House Peverel competition winners Grounds & gardens

The Grade 11* listed Mote House dates from Georgian times

The company was founded by CEO Nick Sanderson in 2000 to provide high quality accommodation designed for older people which includes access to flexible on-site care. Audley is now a leading provider of high quality accommodation for older people in the UK, claiming a reputation for the sensitive renovation and redevelopment of important yet neglected buildings. They choose properties in substantial grounds in desirable locations, creating an exclusive country club in the main building, then adding a number of carefully designed apartments and cottages around it. Residents own their homes, buying their house or apartment from Audley on a 125-year lease and enjoying full membership of the Audley Club. All Audley retirement homes are built in landscaped grounds with leisure facilities. The result is a village, complete with its own facilities and 24-hour security, which

Flat Living

Summer 2012

A positive way of downsizing to a higher quality of life while still retaining property equity that can be passed on to children also forms part of the wider local community. The majority of retired people in the UK today are homeowners but too often they find themselves relatively asset rich but cash poor, says Nick Sanderson. At the same time, they need housing options that meet their aspirations for the future, enable them

14 16 18

to remain independent and release income that would otherwise be locked away. Nick believes the more that can be done to resolve this situation, the greater the potential to use the estimated £1 trillion housing equity held by over 60s to fund a high quality lifestyle. “However,” he says, “unless older people discuss with their families and their advisors how they want to live as well as fund their retirement early on they will do nothing until they face an acute situation, such as a fall, before ending up with very thing they fear most – institutional care”. He adds that many people assume that care will be state funded, where in fact the majority of people will fund their own care due to the low thresholds required for state funding. In response to this situation, Audley has developed what Nick calls the ‘extra care model’ whereby people retain their own front door but are able to receive care in their own home if necessary. Audley’s CEO believes this represents a positive way of downsizing to a higher quality of life, while still retaining property equity that can be passed onto children. Audley now has six retirement villages around England, comprising around 100 units each, designed to encourage older people to enjoy an active lifestyle and allow individuals to stay in control of their own home as well as their future care needs. Residents can access increased care support packages on a completely flexible basis according to their needs. Typical prices start at £249,000 for a firstfloor apartment or a two-bedroom cottage for £360,000. ● For more information go to www.audleyretirement.co.uk

Lifestyle RetiRement homes

Flexible home wins retirement

design prize

Above: the winning designs; left: Peverel Retirement competition judges with the winning designers

Earlier this year, students were invited to submit entries for the first Peverel Retirement Design Competition, ‘Future Ageing’

STUDENTS from aroUND the

country were recently asked to come up with their ideas for an independent living retirement development in a national competition launched by Peverel Retirement in conjunction with the Interior Educators, who are a group of lecturers teaching interior design and architecture at universities across the UK. Students were asked to consider space, security, sustainability and social living in their entries. Keith Edgar, Managing Director of Peverel Retirement explains that Peverel was looking for a “fresh approach” to retirement living from the students. He hoped that they would have something new to bring to the table and was looking for innovative ideas to take to the developers with whom Peverel works on a regular basis. Forty-four entries were received for the competition from eight universities. A panel of expert judges including Cynthia Gibbs, business liaison manager for Peverel Retirement; David Sparks, managing director of Great Homes; and Graeme Brooker, director and Drew Plunkett, fellow of Interior Educators, decided on the winners. The top prize of £1000 went to American Intercontinental University student, Margherita De Eccher, who donated her prize money to an orphanage in Madagascar. Sophie

Hull, a design student from Leeds College of Art took second prize and the runners-up were Jennifer Campbell and Debbie Allan from the Glasgow School of Art and Ameena AlSamarae from Manchester School of Art. Explaining the judges’ decision, Graeme Brooker, said: “The judges’ expertise and knowledge came together to choose our winners fairly, from both an academic and property management point of view. All five winners deserved their places as all had not only met the brief but went one step further taking the future of retirement living into great consideration in terms of space and design.” Margherita’s winning entry gave flexible living space top priority, designing a home in which the walls were demountable and so could be easily moved to create spaces appropriate to the way rooms would be used at any given time. Her designs were geared towards creating easy-to-use, adaptable spaces that would be accessible and comfortable for people to live in regardless of their age. “ I wanted to make the space very flexible and

Fixtures and fittings like bookshelves and worktops are adjustable

made a prototype of how it might work,” she explained. “The doors and walls could all slide and disappear to make circulation easier and even fixtures and fittings like bookshelves and worktops are adjustable. My design was strongly focused on making this house the last move so that you won’t have the stress of finding new accommodation in later life,” she added. Keith Edgar was impressed by the number and quality of the competition entries. “Too often when someone mentions independent living, people’s assumption is that this means a care home. But this couldn’t be further from the truth. We champion independent living in all our developments, encouraging socialisation through group activities and communal spaces. All five winners really understood this,” he said: So will the competition be held again? Keith thinks it likely that Peverel will repeat the exercise but next time the criteria will be even more challenging. “What I would like to see,” he said “is consideration given not only to flexible design and the critical nature of communication services but also to building costs and maintenance”. ● Peverel retirement manages 1,500 developments, comprising 65,000 properties. Its retirement schemes comprise individual leasehold apartments, cottages and bungalows in secure, purpose-built developments. Web www.peverelretirement.co.uk

Summer 2012

Flat Living

Lifestyle GROUNDS & GARDENS

Come

outside GRAEmE mAnn

argues the case for better use of outdoor space

LAST YEAR, The Guardian

newspaper raised the question of whether or not British gardens were stuck in the past? Perhaps the same could be asked about the landscaping of communal outdoor areas around many flats and estate blocks around the country. Many developers are already aware of the wishes of flat owners to enjoy more green space. In response they are adding larger landscaped areas to their developments in order to create inviting and liveable ‘outdoor rooms’. So the biggest challenge is not new build but existing blocks. Flat owners are often keen to find a way to update the communal areas around the many estates built over the last 20 - 40 years to reflect the needs and aspirations of residents, without breaking the bank . However, there is a fine line to tread in order to get the right balance between cost, functionality, health and safety and on-going maintenance.

Strategic planning While most Residents Management Companies (RMCs) will have a schedule of on-going improvements these tend to be reactive, addressing the short term needs and requirements of the tenants. I would question how many RMCs have a longer term strategic view and plan for the future needs of the landscaping around their block. On-going grounds maintenance may stop communal green space from sliding into neglect but without longer term planning how can residents be sure that it will continue to fulfil its amenity potential? In the past, commercial landscape designs were geared towards combining structure, security, a long season of ground cover and

- if you were lucky - colour. There wasn’t a requirement to consider conservation/habitat management and increasing biodiversity, protecting species and their habitats, environmental management or sustainability. Today’s designers recognise that a good, well thought out garden can be a great asset to be enjoyed by residents. Each site should be bespoke and address the needs of both current and future tenants. A good design and well maintained communal outdoor space will encourage tenants to be proud of their space and will have an impact not only on the well being of the residents but may also be advantageous in letting or selling properties. Good curb appeal is all part of the selling strategy and encourages residents to want to respect the landscaping and form good communities. The new wave of naturalistic planting which has come from mainland Europe, has done away with the tired leggy shrubbery found in a lot of older developments. Neglected and looking grim for most of the year, these areas can quickly become dumping grounds for litter and at night can be quite frightening for residents returning home as you cannot see through the dense dark foliage. Far preferable is to open up the spaces, letting in more light and encouraging wildlife. Providing well-lit seating areas around scented plants and using plants vertically adds interest and many new projects include living walls in their design.

Making changes So what should you

take into consideration if you are planning to make some changes to the green space around your block? Commercial garden maintenance is a skilled occupation and your service

provider should be able to give advice on what changes and improvements can be achieved dependant on your budget. If your project area is large, complex and needs design on a master-planning scale, a landscape architect may be required to coordinate all aspects of the process from the site survey through to the contractors building the finished project and will deal with planning issues, designations, landscape assessments and even a consultation process if necessary. For small to medium sized projects, consider engaging the services of a garden

A landscape architect may be required to coordinate all aspects of the process designer. Such companies may have their own in-house team or work closely with a number of recommended designers. Together they can capture the requirements and aspirations for your outdoor space and turn these into workable and costed solutions. They will consider the soil type, the drainage, the angle of the sun, the season during which the plants will flower, the design, style, cost, quantities and quality of the finished area. Even small changes can make a big impact without costing the earth.

Grow your own With the added

pleasure and recent resurgence of grow-yourown, there is also the opportunity to get flat owners involved in tending and harvesting Summer 2012

Flat Living

What should We look for? A written quotation detailing the exact level of service and price goes without saying but you should also expect to receive (in no particular order of importance) Risk Assessment This could be a generic risk assessment or one that has been tailored to your particular property / requirements. Method Statement This is sometimes referred to as a “safe system of work” and is a document that details the way a work task or process is to be completed.

Growing your own is a great way to involve children in outdoor activity their own fruit and vegetables. This is great for promoting a sense of ownership of the outside space among residents but requires some thought in terms of location of the fruit trees and/or vegetable plot and does need buyin from at least a small group of committed flat owners. However, there is a huge amount of satisfaction to be gained from growing produce that can be enjoyed by everyone: the problem of what to do with a glut of fruit or vegetables that is faced by many gardeners is easily dealt with when you have plenty of neighbours to share them with. Growing your own is also a great way to involve children in outdoor activity and can bring the community together to enjoy their outside space in a fun, healthy and productive way - something which is often lacking in larger developments.

Choosing the right contractor

The key to keeping up appearances is simple: regular maintenance and on-going improvements are needed. These may encompass lawns, car parking areas and flowerbeds. and can be effectively achieved by engaging the services of a good quality contractor. There are a vast number of companies out there to choose from ranging from those that can provide a ‘one-stop-shop’ service with everything provided in-house down to the small sole trader who can provide a minimum level of service and may have to sub-contract out some specialist tasks, for example tree felling and fence replacement. Each site is different and which company you choose depends upon your unique requirements and a service that can be tailored to suit your budget. It is often far more cost effective to specify a reasonable number

Flat Living

Summer 2012

of visits/work requirements rather than asking for a quote based on the bare minimum and then be forced to add services in order to maintain standards. As a basic level of service, a grounds contractor should undertake: n Shrub bed maintenance n Annual planting n Lawn maintenance: mowing, weed and feed treatments n Shrub and ornamental tree care n Leaf clearance n Litter control n Snow and ice removal

The million dollar question – how much will it cost? It would

be impossible to give any ballpark figures for grounds maintenance as each site will have its own unique requirements. However, as a general rule of thumb, RMCs should expect a fixed price quotation based on 12 months basic service. For some services it wouldn’t always be possible for the contractor to give a fixed price but under these circumstances a recommended price should be given.

Contingency fund There will always be something that crops up that wasn’t included within your initial quotation. For example that beloved oak tree suddenly getting diseased and needing to be felled. When setting out your monthly ground services fees to residents, don’t forget to allow sufficient funds to cover the unexpected. Managing the grounds maintenance contractor

Hopefully by selecting the right contractor, day to day management should not be

Environmental policy The policy should address how the company will minimise the impact of its activities on the environment and should address – as a minimum – waste disposal and use of chemicals. Health and Safety policy If a company employs five or more people they must have a written health and safety policy statement and a record of their health and safety arrangements. Terms and Conditions This addresses the supplier’s and customer’s obligations. Other documents/ statements may include: a summary of their past experience; team structure and skills; how they will deliver on the service and timescales; and how they will manage the project.

Each site will have its own requirements required. However, it would be prudent to regularly inspect the communal areas to ensure the right level of service is being provided. Most contactors would recommend at least quarterly meetings or correspondence to discuss their progress and medium term planning for upcoming work. ● Graeme Mann is the commercial director of BGS with specialised commercial grounds maintenance teams covering the South East and the Midlands areas. Tel 01252 416 373 Email info@bsgcommercial.com

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Advice Flat Living

Maintenance Insurance Technology Insurance

21 23 25 27

at h o me in y o ur bl o c k

MAINTENANCE

THE HARD FACTS ABOUT HARD FLOORS Kevin marshall sounds out the

problem of wooden floors in flats The much publicised courT case of Faidi Vs

Elliott Corporation, relating to a dispute between two leaseholders in a Belgravia block arising from the installation of a wooden floor, has caused some alarm in our world. It certainly provoked much debate as the story broke. This situation has been a long time coming. For many years wooden floors have been seen as ‘de-rigueur’ in high value properties and ever increasing demand for radiator- free under floor heating solutions has probably fuelled this trend even further. The decision handed down by Lord Justice Lloyd in this case was that the wooden floors need neither be removed nor covered over. In summary he effectively went on to state that the floors were intrinsic to the operation of the heating and the design of the flat. In these circumstances, as the wooden floors had the consent of the freeholder as part of a licence for alterations, it might be said that such a judgement was inevitable. I believe there is a much wider issue here. Where does this judgement leave the landlord in this case? The claim against the neighbour has failed but it does beg the question as to whether the landlord may now be exposed to a claim from the complainant if their lease contains the usual landlords covenant to protect the quiet enjoyment of the lessee. Might it be argued that in granting the consent for the floor, the landlord failed in this obligation? These are complex issues and I have no desire to stray into the domain of the legal profession. The question should however serve as sobering reading for those of us involved in the leasehold sector and I suggest that extreme caution should apply. The wording of the vast majority of leases goes something along the lines of…… “to keep all floors of the flat, save for kitchens and bathrooms, covered at all times with close fitting carpets and good quality underlay’’. I have said for many years now that the fitting of a wooden floor is not

Flat Living

Summer 2012

technically the issue, it is the absence of a carpet fitted above it that is more pertinent. What we are actually looking at here, is the landlord being asked to waive the requirement of this particular clause when consenting to wooden floors rather than it being a matter for consent under a licence to alter, in the same way as perhaps moving a partition wall would be. In most cases these matters are dealt with by way of inclusion in a standard licence but I believe this is fundamentally flawed. How many management company constitutions allow for the board of directors to permit such deviations from the lease. In the context of the potential for a claim against the landlord from a disgruntled

Failing to protect quiet enjoyment places a heavy burden on RMC directors flat owner, failing to protect quiet enjoyment places a heavy burden on RMC directors. Nobody wants to be draconian, particularly in RMC situations where the desire is to facilitate lessees’ wishes whenever possible. The usual presumption is to allow such flooring to be laid subject to adequate sound deadening measures. In all such cases I would suggest that any consent is granted by way of a separate revocable consent to relax the floor covering clause in the event of any sustainable complaints of nuisance. This would be entirely separate to any ordinary licence for alterations. This is a complex legal question and certainly one where legal advisors would have to consider the specifics of each situation. Where I have been involved in such matters it seems that the lawyers are in some doubt as to how easily enforced such a clause would be if tested. Even so, it seems far better

cardoe martin limited are an independent private practice of chartered building surveyors based in new cavendish Street W1. the company covers the full range of building surveying services but has a particular specialism in working with blocks of flats dealing with major work programs, planned maintenance reports and individual defects investigation. For more information, contact kevin marshall bSc (hons) mricS, managing Director on either 020 7563 8900 or kevin.marshall@cardoemartin.co.uk than to deal with the situation as a normal licence matter. Acoustics are an extremely complex area, and simply agreeing to a scheme on the basis that it incorporates a layer of material which complies with current building regulations standards for noise transmittance between dwellings is unwise. Sound transmittance which would not occur from carpeted floors may still arise and lead to complaints. If consent is to be considered, it is essential to commission a specialist acoustic consultant to ensure the design is adequate and that it is properly installed. Usually the consultant conducts tests before and after to certify conformity. Such an approach seems to provide a good balance between pleasing flat owners and demonstrating that the decision makers involved have acted diligently to protect the quiet enjoyment of other residents. The cost of employing a consultant would of course be payable by the applicant in each case. In my own experience, the biggest single factor where wooden floors are concerned is the level of consideration given by the occupants to their neighbours. I have been in numerous flats with original wooden floors and no high specification underlay which have never given rise to a complaint. In these cases the common factor is always that the occupants take care to place rug runners where they walk, apply pads to the feet of chairs and remove shoes when returning home late. Without such simple considerations, even the most highly specified modern flooring can be a source of conflict. ●

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INSURANCE

DON’T lEAvE yoUR HOME WITHOUT oNE

Advice These devices turn off the supply if water flows for too long

‘Fuse boxes’ for water make sense …so why aren’t they in every block, asks AdAm sAiNt?

it is received wisdom that the biggest cause of insurance claims in blocks of flats follows escape of water. Those claims can quickly run onto five figures and more as water seeps through the building and damages one flat after another. As a result, insurance premiums and excesses get higher and higher. The ultimate sanction for a block with multiple claims is when insurers refuse to cover escape of water altogether, making the flats impossible to mortgage. Yet, amazingly, we all seem to accept this as a necessary evil and only bother to take preventive action after the insurers start demanding premiums or applying excesses that are completely unacceptable to leaseholders. So why is water damage so common? My view is that blocks are either badly built, badly managed or badly lived in.

IS yoUR bloCk bAdly bUIlt?

We frequently hear stories of new blocks barely out of warranty experiencing leak after leak after burst! This being the case, why are protective devices not mandatory under the Building Regulations? At the moment the focus of the regulations is on energy and water efficiency but the repair and replacement work that follows escape of water has a massive carbon footprint that quickly negates any energy efficiency measures that are in place. The Regulations also demand that new or refurbished buildings are designed to limit water consumption to 125 litres per person per day. Yet a tap left running or pipe joint disconnected could waste a massive 125 litres in under 10 minutes.

bAd mANAgEmENt

In these days of increasingly professional block management, there is no excuse for letting plumbing fall into disrepair. I would counsel any leaseholder to check that their managing agents have a planned inspection and maintenance regime in place for all plumbing in common areas. Managers ought to be fully aware of where all the pipes and outlets are under Legionella prevention rules anyway.

Flat Living

Summer 2012

bAdly lIvEd-IN bloCkS

Taps left running? Appliance hoses that have not been checked since the dishwasher or washing machine was fitted? Flats sublet and tenants not as diligent as an owner occupier might be? Remember, a leak that goes unnoticed for half an hour is half a tonne of water running through your flat. The idea that you, as a leaseholder, might be liable for a large insurance excess should water escaping from your flat cause damage should be incentive enough to invest in a flood prevention device – yet few people do so until their insurers insist on it because of a poor claims history.

Insurers are now giving the concept a vote of confidence What is truly astonishing is that preventive action in the form of automatic stopcocks to shut off the supply before extensive damage happens can cost less than £200 a flat. That’s probably less than each leaseholder spends on window cleaning every year. There’s plenty of choice on the market, so for any flat owner not to take this basic precaution beggars belief. After all, even if you are the only flat owner in the block to bother, at least you can be sure that your flat won’t land you with a massive insurance excess bill. Of course, if all the flats to decide to install an automatic stopcock, there is every likelihood of a supplier offering trade terms and big savings.

INSURERS votE foR bUIltIN flood pREvENtIoN

That innovative brokers are now showing the way ahead and offering incentives for leaseholders to invest in internal flood prevention has to be a good sign. Insurers are now giving the concept a vote of confidence

with some offering reduced premiums and excesses where patented Floodcheck valves are installed. An automated stopcock fitted to every house, flat or storey of an office building could prevent untold expense, misery, waste and disruption. These devices simply stand sentinel and turn off the water supply if water flows for too long (tap left running), too quickly (burst pipe or disconnected appliance hose), not at all (building left unoccupied) or if there is a risk of freeze/thaw flooding. Remote controls and wet pad detectors are offered with most systems on the market. Holiday homes and let property were the first to benefit from reduced premiums and excesses once Floodcheck valves were installed and now specialist blocks of flats insurers have also negotiated special schemes that mean big savings up front. Major developers and facilities managers are also voting with their cheque books, with the developers of the London Athlete’s Village installing Floodcheck Autovalves in over 2800 flats in Stratford. ● Adam saint is managing director of Floodcheck tel 0844 335 6668 email adam@floodcheck.co.uk

Floodcheck was established in 1998 and is run by father and son team Adam and Bill Saint. The company continues to lobby for Building regulations that ensure that no new flats are built without this basic protection.

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TECHNOLOGY

Advice

THE NEED FOR

SPEED

Fibre provider HypEropTic is on track to revolutionise the UK broadband market with hyper-fast connections and low prices BroAdBAnd is incrEAsingly A ‘must-have’ rather than a pleasing add-on to modern life. With most of us regularly using the internet for leisure - such as for shopping and talking to friends and family - and with more than four million people now estimated to work from home, broadband speed and connectivity is rapidly becoming key to the property-buying process. However, despite the importance of broadband technology to our lives, the UK currently lags behind in the speed stakes. According to Ofcom, the average Briton gets roughly 6.8Mbps, which puts us in the rather unimpressive position of twenty-fifth in the world for broadband speeds. A company that is set to change all this is London-based fibre broadband provider Hyperoptic. Headed up by MD Dana Tobak, the former co-founder and MD of Be, the company is based at Westfield and is the first in the UK to offer consumers 1 Gigabit download and upload speeds. Hyperoptic’s aim is to revolutionise broadband in the UK by bringing fibre directly into homes, resulting in a lightning fast connection - currently 140 times the speed of the UK average. So what makes fibre broadband so superior? Dana explains that the ADSL technology that brings broadband into most UK homes utilises the unused capacity within our copper phone lines to transmit data. This has the advantage of using existing technology that is connected to virtually every home in the UK. Where it falls down is the lack of capacity for todays’ bandwidth needs as well as the inevitable interference on the line either due to lack of ‘shielding’ from other lines or from external power sources such as sub-stations and transmitters. In recent years progress has been made by traditional broadband providers in increasing speed and efficiency but users are still plagued by what Dana calls the ‘distance from exchange problem’. Basically, the further from the telephone exchange you live, the more degraded your broadband signal becomes, leaving some homes with no reliable broadband and others with an intermittent service. Using fibre optic technology solves all these problems. Unlike phone wires, this

Flat Living

Summer 2012

technology has been developed with the sole purpose of transmitting massive amounts of data. There is no signal degradation and the cabling can be laid at the same time as other services, keeping costs down. It is not only the speed of Hyperoptic’s fibre broadband offer that is predicted to get the market talking. Prices are competitive too with residential pricing starting at a comparatively low £12.50 per month for broadband (based on taking phone service with a £12.50 line rental, including free UK evening and weekend calls). Packages include: n 20Mb/s Hyper-lite £12.50 pcm n 100 Mb/s Hyper-active £25.00 pcm n 1Gig Hyper-sonic £50.00 pcm

Hyperoptic is now talking to a wide range of developers to promote the benefits to residents of incorporating fibre optic technology in their schemes. The offer is an attractive one. Future-proofing residential developments in the face of ever-increasing demand for faster broadband, adds value and has huge potential kerb appeal for purchasers. All this makes perfect sense in new build developments but what of existing blocks? There is no doubt of the potential benefit that residents can gain but what they will be asking is how much it will cost to run new cabling and install the technology in their homes? There is no easy answer to this question. According to Dana, it depends on the construction of the building. Does it have existing risers and hatches providing access to each flat? Is the building listed? Can cabling remain surface-mounted or must it be hidden? These issues all impact on cost. On the plus side however, there is also what Dana describes as the ‘Groupon effect’ which means that the more residents buyin to the technology, the cheaper it can be offered. Hyperoptic’s’ current offer means that they are only looking at installing fibre in blocks of more than 100 units. Smaller than that and the economies of scale don’t add up, Dana explains, although in future this is expected to change. Locations that Hyperoptic has already started deployments in include Battersea, Docklands, Holborn, Shepherds Bush, Vauxhall and Westminster. ●

WHaT arE fibrE OPTiCS? An optical fibre is a flexible, transparent length of silica only slightly thicker than a human hair. Light is transmitted between the two ends of the fibre, which allows data to be transmitted faster and further than other forms of communication. Signals travel along fibres very efficiently and they are not plagued by the interference that affects copper telephone wires. Fibres can be wrapped in bundles to enable them to carry large quantities of data including complex images. This makes them particularly appropriate for supplying services such as TV and broadband.

About Hyperoptic Hyperoptic is the latest fibre technology for online connection. Delivering fibreto-the-building with speeds of 1 Gig to jump start the UK into the ‘real’ fibre revolution, Hyperoptic was founded in 2011 by Boris Ivanovic, Chairman and Dana Tobak, Managing Director (below). The same team previously co-founded the UK’s breakthrough 24meg ISP Be in 2005, which was sold to O2 one and a half years later. Be’s market-leading customer service enabled them to win a number of awards including Which? ISP and PC Advisor’s Best Buy. Hyperoptic is a finalist in two categories of the 2012 ISPA Awards; Best Consumer Fixed Broadband and Best New ISP. Hyperoptic Unit C401, Westfield London, Ariel Way, London, W12 7FD Tel 0333 332 1111 Email support@ hyperoptic.com Web www.hyperoptic.com

With fees ranging from as low as £365+VAT per site,* can you afford to take the risk?

INSURANCE

Advice

WHAT’S YOUR NEW bATHROOm ReAllY WoRth? warns that flat BelInda thorpe

owners should be aware of the insurance implications of home improvements

It Is not uncommon for individual

flat owners to undertake extensive refurbishments to their own flats. These improvements can be very expensive and significantly increase the rebuilding cost of each individual flat and consequently of the whole block. Depending on the number of such refurbishments in a block and the nature and timing of a rebuilding valuation, such renovations leave the building in danger of being inadequately insured. Should a total loss occur, the sum insured provided by the rebuilding valuation could lead to some individual flat owners suffering a financial shortfall if the overall buildings sum insured does not make allowance for the refurbishments that have been carried out by flat owners. As a further consequence the Residents’ Management Company could become liable to legal proceedings from these lessees for not maintaining an adequate level of insurance for their block. Consider the scenario where several of the individual flat owners in a block of forty units have refurbished their own flats. The penthouse owners completely renovate their en-suite bathroom. This “refurb” uses high grade marble fittings and other luxurious touches. The penthouse owners are naturally delighted with the result even though the final invoice from the contractors comes in at over £60,000! Other flat owners who carried out refurbishments each spend on average between £20,000 and £25,000. The collective cost of the refurbishments is over £200,000. The above scenario poses an immediate risk of underinsurance to the RMC, particularly as the block is not due to be re-valued for another 12 months.

So what can be done? How can you prevent the financial penalty that underinsurance would impose on lessees and their Residents’ Management Company? First – ensure that the latest valuation on your buildings is no more than three years old and that when you decide to re-value, your instructions to the valuer are clear and concise. You will need to bear in mind that the valuation provides a minimum figure that applies at that point in time and is a recommendation only. Second – instructions given to a valuer should include the known and anticipated changes or probable changes to individual flats. Your building insurance sum insured should be corrected in line with the recommendations of the valuation and adjusted at each subsequent renewal in line with the valuation cycle and Royal Institution of Chartered Surveyors index linking recommendations. In a depressed property market people are more likely to improve their homes rather than move elsewhere. Regular dialogue with the individual flat owners about the perils and

the RMC could be liable to legal proceedings... for not maintaining an adequate level of insurance

churesidentsline provide market-leading insurance products for blocks of flats and apartments throughout the UK. For more information call Vikki Blair or stephen Gibbs on 020 3102 8526. pitfalls that can commonly befall flat owners will help, along with putting a process in place to recognise any major refurbishments which could have a bearing on your rebuilding cost. Time spent now on valuations and dialogue with your residents may save heartache in the future, but to be confident your RMC is doing right for its lessees why not consider CHUResidentsline’s market-leading Residential Buildings insurance which uniquely offers an additional £50,000 sum insured per flat for Lessees Fixtures and Improvements – call us for a quote on 0800 281235. ● Belinda thorpe is managing director of CHUResidentsline email Belinda@ churesidentsline.co.uk Web www.chu residentsline.co.uk tel 020 3102 8526

In a depressed property market, people are more likely to improve where they live than move

Flat Living

Summer 2012

Opinion Flat Living

w h at t he e x p e r t S t hink

Bob Smytherman

explains why the clamping ban will be a charter for the selfish parker

Most people who live in a block of flats in a town or city will be aware of the debate that has been raging in recent months over the government’s plans to ban clamping of cars parked illegally on private land. Despite vigorous lobbying by the Federation of Private Residents’ Associations (FPRA) which represents flat owners in England and Wales and a range of other interested parties, the ban, which is included in the new Protection of Freedom Act, received Royal Assent at the beginning of May. The FPRA has accused Home Office Minister Lynne Featherstone MP of completely ignoring the views and the rights of flat owners and tenants in drawing up the new legislation. The new Act ignores all the issues we have raised regarding the car clamping ban during the passage of this Bill and when it comes into force in October we anticipate major problems for ordinary residents living in blocks of flats with a parking space. I do not believe the Coalition’s knee-jerk proposal to ban wheel clamping outright in an attempt to outlaw rogue clamping companies will be the populist measure they expect it to be. What the Government has failed to appreciate is that thousands of people living in blocks of flats with car parking spaces are constantly at the mercy of illegal parking. And as anyone involved in the management of parking knows, the only serious deterrent to illegal parking is the threat of clamping. The issuing of penalty tickets is not an effective deterrent because they are very difficult to enforce, as highlighted by the BBC’s Watchdog programme. The Government’s response to our concerns is that landowners can

erect barriers around their property to control illegal parking. This might be fine for well-heeled companies, the landed gentry and government departments, but it displays a dismal ignorance of how this can be achieved in blocks of flats. The FPRA pointed out to the Home Office that n Residents and leaseholders of blocks of flats may not be able to install barriers because the terms of the lease will not allow them; n If the lease does allow or if it is amended to allow (a very complicated and costly process) the installation of barriers, the cost of installing and maintaining them will fall on the ordinary leaseholder, which includes pensioners and the not-so-well-off. Will the government contribute to this cost? n Barriers are restrictive and inconvenient to residents, visitors and trade vehicles interfering with the free movement in and out of where they live, work or visit. I am saddened that the Coalition Government’s understanding of car clamping is depressingly naive. Ministers seem to think that this is a simple black and white issue of drivers as victims, when in fact many residents are also victims; their lives plagued by illegally parked cars. Ministers seem to

Leases may not allow installation of barriers

The real problem with the system was the rogue car clampers and the solution should have been to regulate them

CorreCtion in my last article i inadvertently referred to the limit of bank protection as £50,000 but in fact after a successful campaign by Fpra and others this was increased to £85,000 in the event of a bank failure. the £85,000 limit is the amount any individual can claim on the Financial Service Compensation Scheme and this can include monies held in trust for leaseholders. the rules are more complex than this and full details are available from Fpra. we apologise for the confusion.’ See also letters, page 33 for more on this subject from arMa

assume that landowners can just erect barriers, with no understanding that these ‘landowners’ also include ordinary people - leaseholders - in blocks of flats who could be forced to pay for the installation and management of barriers, if the lease allows it. In many cases the lease will not allow it, in which case there is little that those residents can do to effectively keep out unwanted cars. The new law will bring misery to a lot of people and certainly not the ‘freedom’ the Government claim. Our argument was that the real problem with the system was the rogue car clampers, and the solution should have been to regulate them, not ban clamping completely. So where do we go now? The FPRA hasn’t given up on this issue and we will continue to campaign vigorously on leaseholders’ behalf. We are now calling on the Home Office to work with us to come up with robust regulation of the parking industry, and avoid the unintended consequences of this rash and illconceived legislation. ● BoB sMytherMan

Chairman, The Federation of Private Residents Associations Ltd email bob@fpra.org.uk Go to www.fpra.org.uk to find out more about the FPRA and its legal advice service which is free to members.

Summer 2012

Flat Living

Bob Smytherman John Williams Paul Robertson Letters Jonathan Smith

28 29 30 31 33

John Williams

The government’s refusal to regulate the leasehold sector does us no favours In my last artIcle I ranted about

red tape and how unnecessary and burdensome regulation leads to greater expenditure for leaseholders. This time round, following on from the comments made by other contributors in the last issue of Flat Living, I want to focus on regulation of leasehold management. We are now seeing ever-increasing calls for compulsory regulation of managing agents in place of the current system of self-regulation. A one hour debate was initiated in the House of Lords on 23 April by Baroness Gardner, calling for simplification of the law; consolidation of the various Acts of Parliament; regulation of managing bodies; transparency; complaints processes; closing loopholes; easier change to commonhold; right to manage; standard of services and value for money. The debate was concluded by Baroness Hanham (Under-Secretary of State, Department for Communities and Local Government) confirming that the Government has no plans to intervene as it believes there are sufficient routes of redress for unsatisfied leaseholders. In March, the Planning and Housing Committee of the London Assembly published its review into service charges in London. The terms of reference were to understand the nature of service charges in London, how they are calculated, charged and administered by landlords and paid for by leaseholders. The aim of the review was to look at ways the relationship between leaseholders and landlords could be re-balanced, with particular focus on the way transparency of service charges can be improved, giving leaseholders greater control over the way services are provided to their homes. The 80 page report makes nine recommendations (most to be undertaken by the end of 2012) and clearly a lot of time and effort has been invested in this review. However, I do not believe it has gone far enough and the one-size-fits-all approach for public, retirement, social and private housing has confused the issues. What might

Flat Living

Summer 2012

Baroness Gardner speaking in the House of Lords

We need clear, concise guidance to the roles and responsibilities for both the leaseholder and the managing agent

be done by a local authority may not be achievable by a managing agent trying to make a profitable living in the private sector. My thoughts are therefore mainly confined to the private sector. Part of me wants compulsory regulation as it will result in fewer managing agents and a rise in fees. That is good for managing agents in an undervalued sector, but clearly not good for leaseholders who will see service charge bills rising. The other part of me, already regulated by ARMA and RICS, shudders at the thought of yet more regulation. Proper regulation does not come cheap as RICS has found out to our cost. There will always be the criticism that self-regulating professional bodies have a vested interest in looking out for the members who fund their costs. However, having been heavily involved in RICS for many years, I know that is not the case. In any event there is already the requirement for both ARMA and RICS members to have a complaints handling procedure, to subscribe to an independent ombudsman scheme and be able to demonstrate they hold service charge monies in the correct and legal format. Government maintains it does not want to intervene, but has said it will keep a monitoring brief. Well, quite frankly, that does not help leaseholders or managing agents. So what is the solution in the short term? n We need better promotion of the benefits of self-regulation. This will

ensure leaseholders only select managing agents who are members of a relevant professional body such as ARMA or RICS. I am a massive fan of ARMA. It produces a wealth of information through guidance notes and weekly email bulletins to managing agents and free advice to leaseholders. n Leaseholders need to be better informed - although I do not believe they are as dim-witted and gullible as some have made out! Nevertheless, as managing agents we need to provide more information at the outset, particularly when dealing with replies to solicitors’ enquiries by providing more general information (for example The Guide to Living in Leasehold Flats published jointly by ARMA, LEASE and ARHM or 21 Ways to be a Great Leaseholder produced by ARMA) to be passed to the purchasing leaseholder by the solicitor. n Leaseholders should be actively encouraged to get involved in the running of their building/estate. The best run blocks are those where there is a strong team approach by the managing agent in tandem with active leaseholders. Far too often there is a single leaseholder who shoulders the unpaid and thankless burden. n ARMA (in consultation with RICS and ARHM, FPRA among others) needs to draw up a charter setting out minimum service standards expected from their members, over and above the RICS Service Charge Residential Management Code (including insurance commissions and accounting.) n ARMA needs to continue to tackle government on regulation and making it easier for leaseholders to take over the management responsibilities. In summary, we need clear, concise guidance to the roles and responsibilities for both the leaseholder and the managing agent – the continued lack of government action gives us all a headache! ● JOHn WIllIams

Director of Management and Professional services at chartered surveyors Aston Rose Tel 0207 629 1533 Website www.astonrose.co.uk

Opinion

Paul robertson

examines both sides of the debate over the commission paid to managing agents for handling block insurance It Is no great secret that

commission is paid to freeholders and managing agents in the flats insurance market. However, many firms are shy of being upfront about their earnings from this source. All that may be be set to change with the European Commission producing the second version of the Insurance Mediation Directive (IMD2) legislation. This is the replacement for the current IMD that provides a framework for the minimum standards of arranging and handling insurance in Europe. Consultation is now underway, with a view to making it compulsory to disclose any commission earned in the sale of general insurance. Assuming that commission disclosure does form part of IMD2 – and this is looking increasingly likely - it will still be several years before the legislation comes into force in the UK, although it would be prudent for firms to start considering the issue now. Personally, I believe the payment of insurance commissions to professional managing agents is justified where they provide a role in managing the insurance. Some firms of managing agents estimate they spend up to 25% of their time on insurance-related matters so it would be unreasonable were they not remunerated for this. The real question therefore, is not so much whether or not commissions should be paid but simply what is a fair level of remuneration and how is this achieved and communicated?.

How much commission is too much? Flat owners may have a different perspective. After all, I hear you say, how difficult can it be to arrange a buildings policy for a block of flats in these days of online insurance? Surely you can simply go to a comparison website and, in a matter of minutes, get the best possible price for the forthcoming year? Why should flat owners pay commission to a managing agent for such a simple task? The reality, however, is that the task is not that simple. There is no such thing as www.comparetheflat buildingsinsurancemarket.com Furthermore, even if such a service were to become available online, the policies currently available in the market are so significantly different in terms of the adequacy of cover and protection they provide, a managing agent would be ill-advised to rely on price alone in selecting a policy. A managing agent needs to carry out due diligence when selecting a block insurance policy, making sure that not only does it fulfil the requirements of the lease but also that it does not contain any unworkable terms and conditions or contain significant exclusions that may affect flat owners. In addition, agents need to respond to flat owners’ enquiries and are often significantly involved in claims. Coupled with all the other administrative and regulatory requirements (which involve time and cost), then it is not unreasonable for a professional firm of managing agents to earn 20% commission; a

Have you ever asked the checkout attendant how much the store will make by selling you a bag of potatoes?

figure of this level being considered totally appropriate to cover their costs. Ultimately, if they are unable to generate income from commission, they will need to reflect this elsewhere in their management charges. Arguably the most controversial element of commission is that it is paid to freehold property investors. Many of them purchase freeholds and include insurance commission earnings in their business model. That said, many have significant portfolios and, as such, claim that their buying power enables them to earn commission at no price disadvantage to the flatowner. After all, is this any different to the buying power of supermarkets and independent retailers? Have you ever asked the checkout attendant how much the store will make by selling you a bag of potatoes? Potentially the biggest danger in the commission debate is that it could lead to significant market pressure towards a “cheapest is best” mind-set, as opposed to obtaining the right cover at a reasonable price. This is not simply scaremongering as these trends are already clearly evident in many other online insurance markets. Arranging the right cover for blocks of flats requires expert advice and can often be complex. If the necessary expertise is lost in attempts to reduce costs, it is innocent flatowners who will be the victims. ● Paul robertson

is Managing Director of Midway Insurance Services Ltd & 1st Sure Ltd tel 0845 3702848 email paul@midway.co.uk Web www.midway.co.uk

Summer 2012

Flat Living

LETTERS email info@flat-living.co.uk tel 0845 257 6374 fax 0845 257 6319

Compensation Scheme for service charge funds

An article in the last issue of Flat Living magazine by the chair of the Federation of Private Residents’ Associations stated that the limit of protection for service charge funds is £50,000 per scheme if a bank goes into receivership. This is inaccurate and it is important that your readers know the true position. Service charge monies held in trust are protected by the Financial Services Compensation Scheme (FSCS). In September 2010 the FSCS announced an increase in the protection limit for savers from £50,000 to £85,000 with effect from January 2011. Moreover, this protection is not an £85,000 maximum per block or savings scheme. In April 2009 the Communities and Local Government Dept. issued a guidance note on this topic. It made clear that, while any claim would be dependent on the circumstances and evidence available at the time of the claim, the FSCS would generally expect to treat the tenants (not the landlord) as being individually entitled to the protection available for that proportion of the money in the account to which they were entitled by statutory trust. (In this context “tenants” means lessees.) This means that each tenant would potentially be eligible for a maximum of £85,000 compensation to cover the loss of their individual proportion of the deposited funds. Your readers might be further reassured to know that all ARMA members are required each year to submit proof from an independent accountant that they hold service

Flat Living

Summer 2012

Flat Living

Opinion

If you have a question or would like to share with other readers your ideas or experiences of living in a leasehold block, we want to hear from you. Address your comments or queries to the Flat Living team at info@flat-living.co.uk a risk assessment and they referred me to the local council. The council replied to say that we were no longer regarded as an HMO so basically didn’t need it. I have prepared the assessment using forms I downloaded but our company have not officially agreed to adopt it. I’m now completely confused as to whether we need it or not. Please can I have some guidance.

BloCk MAnAgeMenT I am one of the four directors of an RMC. We have a managing agent who only does very little as we chose to run the building and company ourselves. A director has been asked to step down by the residents which she has. The managing agent is now telling me that although this director has resigned she is still a member of the block management team and can take part in the running of the building, make decisions and have voting powers on certain issues (which the managing agent does not clearly define.) but has no legal liabilities. They also say members of the management team are appointed and removed by the directors. We are quite surprised by this information. Can you please give us your opinion on this?

Name withheld

Helen Christie, ARMA Technical Officer replies As a lessee, you are likely to be a member of the Residents’ Management Company (RMC) if the company is limited by guarantee, or a shareholder if the company is limited by shares. You therefore have two hats: that of a lessee and that of a member of the company. There are both legal and practical reasons why these two identities are separate and distinct from each other even though they may be the same person. As a lessee you are contractually bound under your lease to abide by the covenants to the RMC or landlord and your rights are not fettered by the fact that you are also a member of the RMC. As a member of the RMC you will be entitled to take part in decision-making charge monies in trust as required by law. Michelle Banks Chief Executive, ARMA

Bob Smytherman also corrects his previous article in his column this issue. Turn to page 30 for more.

Dee Paice

How many hats are you wearing? (albeit probably restricted to voting for the removal of the board) and will have a say at company meetings. Your liability to the RMC and its creditors is limited to the extent of your shareholding or guarantee (commonly £1). As a member of the company, you have no responsibility for its day to day running and your rights and obligations are those set out in the Articles of Association of the company. As a director of the RMC, you are responsible for the day to day running of the company, have personal liabilities and your rights and obligations are those as set out in the companies Act 2006 and any service contract. To help lessees better understand the differences between their roles as residents and as members/shareholders of their RMC, ARMA has produced an advisory note which can be downloaded free from www.arma.org. uk (see also pages 40-41 of this issue for more on this subject).

Fire safety

I’m a subscriber to Flat Living and I’ve been looking at your web site on Fire Safety. Please can you offer clarification on our situation. We have 5 flats in a converted Victorian Listed

building that is part of a large terrace. Between us we own the freehold and we self manage. Some months ago when I became aware of the change in legislation I contacted the Fire Service about needing

Kevin Boreham, fire safety and compliance specialist with Mainstay Property Managers replies Article 31(10) of The Regulatory Reform (Fire Safety) Order 2005 states “premises includes domestic premises other than premises consisting of or comprised in a house which is occupied as a single dwelling.” Put simply any property with communal areas, be it a single stairwell, plant room or storage rooms, requires a fire risk assessment to be completed. From the property description you have provided I have made the assumption that there are communal areas used by all residents. Therefore your thinking would be correct and a fire risk assessment would be required. The fire safety pages of the ‘Department for Communities’ website (http://www.communities. gov.uk/fire/firesafety/ firesafetylaw/) makes it very clear as to the types of properties affected and who the responsible persons are. They also have a number of forms and guidance documents which will help you complete an assessment for simple premises. A word of warning: the listed status of the building needs to be taken into account when considering any fire safety improvements.

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Coles Miller Solicitors LLP

INTERVIEW

Seeing the

Opinion

BIG PICTURE

leSley DaviS

talks to Jonathan Smith, Managing director of one of the UK’s largest property managers, Trinity Estates Jonathan Smith iS a relative newcomer

to the leasehold sector. A professional background in accountancy brought him to property via insurance, contract cleaning and IT, where he worked for a range of mediumsized companies turning over between £15m - £60m per annum. “This gave me the benefit of being involved in the overall structure of companies and an insight into how they operate both within their own industry and the wider market,” he explains. Having worked briefly for Christie & Co, Jonathan’s first real exposure to the property industry was when he joined Trinity in 2004. Initially responsible for developing the accounting and operational functions - which soon expanded due to rapid growth he was appointed managing director in 2008. “I steadily became involved in all areas of the company and soon realised that residential management was very much a developing industry where we as a company could make a positive contribution and so could I by steering that company.” Trinity was very much in its infancy when Jonathan joined, with just over 3,000 units under management. Eight years later the company is managing 40,000 homes. So to what does Jonathan attribute Trinity’s success to-date and what has driven its exponential growth? “Our success is down to hard work and actually listening to client requirements” he says. “We have made some big mistakes but we were quick to realise them, learn from them and prevent them happening again. We were also big enough to admit to those mistakes, which goes a long way in this market.” Trinity’s directors also realised that property management was their core business. “Unlike some others we took the commercial decision not to diversify into other disciplines and so have avoided distractions from the job of providing a professional management service,” Jonathan explains. A recent change within the structure of the company has been for Trinity to merge a number

of sites previously managed by London-based property managers Chainbow into a Trinity Chainbow brand soon to be rebranded as ‘Trinity London’. The thinking behind this decision was that although Trinity has a very strong regional presence elsewhere in the country, there was a need to strengthen the client base in London. “This enables us to attract more proficient managers and provide a better service to our residents and developer clients, fully tailored to life in the capital,” Jonathan explains. In some instances property management can be a

Jonathan Smith: property is our core business

numbers game and the more sites you have in a given area the more cost effective and responsive you can be, he says. “By acquiring the Chainbow sites we have a greater capacity to deliver an improved service more effectively.” Trinity is one of the largest managing agents in the country but Jonathan Smith doesn’t regard it as operating like a big company and is keen to provide a friendly and professional local service to clients. “Although we deliver a service to 600 sites across England and Wales and run a back office function from our head office in Hertfordshire, we actually operate seven regional business units which allow us to

Seven business units...allow us to deliver our services at a local level deliver our services at a local level,” says Jonathan. This enables Trinity to employ local staff who operate from a home office and can source local contractors. Despite this focus on ‘localism’, there are instances when Trinity is able to use its

inTerVieW consolidated position to great effect, particularly in the procurement of services. “Due to our size and annual spend with some contractors, we are able to negotiate preferred terms and rates which are to the benefit of both our service and our residents,” he says. One of these benefits is the service provided by Ottimo, which is a facilities company established by the Trinity shareholders to complement and enhance the levels of service on offer. Ottimo works alongside Trinity in reviewing the work undertaken on site by contractors and looking for areas of improvement and cost savings. To-date, says Jonathan, this has worked “incredibly well” and levels of efficiency and reaction times have improved significantly. With the number of households in the UK increasing there is an expectation that the leasehold sector is likely to expand in future. So what opportunity does this present for companies like Trinity? Jonathan outlines the company’s plans to continue working closely with existing developer clients and hopefully new ones too, with a view to providing a comprehensive service across the multitude of complexities which are now being encountered in new builds. “It is not just a case of managing bricks and mortar and people’s expectations anymore; managing agents now need to have a complete understanding of the innovative new methods used for sustainability such as CHP units and Photovoltaic systems,” says Jonathan. “More and more complex developments are being built and we have had to gear up our expertise to cater for them.” Trinity employs a wide range of specialists including surveyors, solicitors and accountants but one of the most important teams is the handover team which works with the client months before Trinity takes management of a scheme to ensure that everything is in place. Jonathan explains that in order to offer an exemplary service, it is vital that his property managers develop a full and thorough understanding of what

is to be managed. They are also able to offer advice during the build with regard to fit-forpurpose equipment. “This has been of great benefit to Trinity and its clients for a number of years now,” he says. Jonathan believes that one of the most important aspects of a property manager’s role is to build up a relationship with clients that engenders trust. “There is a great deal of mistrust throughout the industry and especially among residents who believe that managing agents are making huge sums of money at their expense. In reality some agents still are but the larger professional companies who take much of the flack are not. It is perceived that agents receive money from contractors for works or commission on insurance or charge unreasonable management fees.” The truth,

There is an expectation that the leasehold sector is likely to expand in future according to Jonathan, is that some earn from contractors, some earn from insurance and some do simply overcharge. He believes that what is now needed in the industry are clear auditable guidelines which protect leaseholders but also allow agents to operate a professional, successful business. “We need to ask questions and find solutions to the difficult issues. If an agent has a fee earning arrangement with a supplier under a bulk buying contract and is providing the most efficient service at the most beneficial cost to the residents, is it right? At what level do we deem the earnings to be reasonable and how do we determine that the service is the most efficient and beneficial to the residents?” he asks. Jonathan is working closely with other large agents and with ARMA to find a solution to this and many of the other contentious issues that plague the leasehold

Who are TriniTy esTaTes? Trinity Estates was established in 2000 by four shareholders who saw a gap in the residential market for a management company that was able to offer a professional management service both to developers and their purchasers. The founders all had complementary skills and several years experience with other firms. They brought together the four main disciplines of a property management business: finance, new business, management and

Flat Living

Summer 2012

Opinion

legal. Within two years the company was managing 3,000 units with another 5,000 committed. Today, Trinity is possibly the largest privately owned residential agent in England and Wales employing 140 staff. The company now manages 40,000 units over 600 sites with another 13,000 units committed to management on completion. Sites range in size from 10 to 1,200 units and are managed by locally-based estate

managers who live no more than 30 miles from their farthest site. This means that an efficient support and management service can be provided. These managers are supported by a regional manager and surveyor. The main supporting functions of accountants, solicitors and customer service are based in Trinity’s head office in Hemel Hempstead but each member of staff is equipped with the latest communication technology to allow open dialogue between offices.

Formerly a keen runner, after an injury Jonathan has now taken up cycling in his spare time. always looking for a challenge, he and collegue angus Cooper recently took on the three peaks – Ben nevis, scafell Pike and Mount snowdon – cycling the whole 538 mile route to raise money for Neuroblastoma. if anyone would like to make a donation for this very worthy cause, go to: http://uk.virginmoneygiving.com/team/ nevis2snowdon

market. “We are all fully aware of the common issues and we are all determined to push for stronger legislation to stamp out malpractice and work toward a licenceto-trade system,” he explains. “Legislation needs to be imposed but it needs to be imposed correctly. With representation from both leaseholders and agents we should be able to find a workable solution. This will eradicate a lot of the mistrust and perception of unscrupulous dealing,” he adds. Ultimately Jonathan would like to see managing agents communicate better with leaseholders so that customers understand the industry is doing its best to deliver the service they require within the constraints applied to agents. The property management industry also needs to work on setting up a carefully planned training programme leading to a recognised qualification specific to the sector. ● JoNaThaN smiTh

is managing director of Trinity Estates Tel 0845 345 1584 Email jonathan.smith@trinityestates.com Web www.trinityestates.com

ARMA A S K T HE P R O F E S S I O N A L S

ARMA SURGERY Bruce MAunder TAylor, a chartered

surveyor and member of ARMA’s council provides answers to readers’ questions

CLAIM FOR WATER DAMAGE

QUESTION I live on the second floor of our block of flats and my washing machine overflowed while I was at work causing damage to the flat below. An insurance claim has been made by the managing agent but I have been told that there is a £1,000 excess and I will have to pay the lessee of the flat below that amount as it is only the sum over and above that which will be paid by the insurance company. I don’t have that sort of money and it’s going to cause me great hardship. What can I do? ANSWER The buildings insurance policy on a block

of flats normally covers water damage subject to the insured party (usually the landlord or the management company) paying the first amount of any claim, called the excess, and the insurance company paying only for the amount of damage which is more than the excess. Water damage claims are probably the most persistent claims from which insurance companies suffer when insuring blocks of flats (see also page 23). I have not seen a copy of your lease but, assuming it has relatively standard terms, then it is the obligation of your landlord or management company to insure the building. It is unlikely that the lease has any clause about that obligation being subject to an excess, or who pays the excess when one arises. There is probably a landlord or management company obligation to reinstate the damage with the money received from the insurance company. If that money received is less than the cost of the works there will be a deficiency, and it is likely to be about £1,000. The question is who pays? The landlord’s repairing obligation is probably limited to the structure, exterior and common parts/common services. It is therefore unlikely that remedy of the damage falls to them. The repairing obligation of each lessee is probably to repair their own plasterwork, flooring, decorative finishes etc. Your downstairs flat therefore has the repairing obligation for the damage within their flat. There is unlikely to be a clause which obliges you to pay towards the cost of repairing the downstairs flat. It is unlikely that the managing agent or the landlord (or RMC/ RTMCo) can oblige you to compensate the downstairs flat unless you have some unusual clause in your lease to that effect. The downstairs flat might try to claim the money from you in a Small Claims Court, or might try to use what is called the mutual enforcement clause to insist that the landlord (or RMCo) takes action against you.

If there is persistent leakage then action can certainly be taken against you under the normal nuisance clause, but if this is a one off event and you properly remedy whatever fault occurred with your washing machine then there is no continuing nuisance over which action can be taken. For most leases this is a very difficult problem for which few modern leases make adequate provision. Old leases generally make no provision at all for such problems. When you have two owner occupiers who recognise that they have

Water damage claims are probably the most persistent claims from which insurance companies suffer when insuring blocks of flats

The Association of Residential Managing Agents (ARMA) is a trade association for firms that manage private residential leasehold blocks of flats in England & Wales. ARMA promotes high standards of leasehold management by providing advice, training and guidance to its member firms of managing agents. ARMA also produces guidance materials for leaseholders and Residents Management Companies. With over 270 firms in membership, ARMA also campaigns for improvements in the legislation governing the leasehold sector.

Summer 2012

Flat Living

Surgery Guidance Directory Find an agent

If you have a query, email it to .uk info@flat-living.co d an All names addresses are withheld

36 38 40 42

If the lease requires consent to sub-let, you have a problem

References required? QUESTION Our agency has been

instructed to let a property in a block of 15 and on doing the final checks yesterday we were accosted by a member of the residents association who said they wanted to see the references of the tenants and they would check those references out and interview the tenants before they moved in. I have never come across anything like this before and I don’t think it’s right. He said that it was written in the lease and that if we moved these people in without their approval that they would evict them. They had done it before apparently. I asked to see the lease but they said it was too big for us to see. Our Landlord is abroad so I have emailed her and await her response. On what grounds would they be able to evict our tenants?

ANSWER This problem of sub-tenants

to continue living together in the same building, the problem usually gets resolved by some form of agreement. When water damage comes from a rented flat owned by somebody who does not live in the building, then some unpleasant disputes can occur. As to your question: regularly check your washing machine and all your water fittings to make sure that they are well maintained and will not give rise to water damage in the future. With regard to the present claim, my advice is that you go to see your neighbour and see what agreement can be reached. Most people would take the view that it was your washing machine at fault, therefore you pay. Do you have a contents insurance policy which would cover the matter? You will either make an agreed payment or become an unpopular person in the block.

Flat Living

Summer 2012

in leasehold flats can lead to extreme problems if the sub-tenants behave in a manner which constitutes a nuisance or the landlord/management company is unreasonable or aggressive. An immediate threat of “comply or we will litigate” is a most unfortunate aspect of modern practice in flat living and management, one which the Courts regularly speak out against and which I frequently advise against. Both parties must (mandatory word) read the lease and know the proper procedures. For you not to have a copy of the lease and know the relevant parts is as unfortunate as the residents association declining to help you by providing a copy to you and explaining their established procedures, in accordance with the terms of the lease. A residents association is unlikely to have any legal position in this matter but may well have influence with the landlord or management company about how and when they enforce the terms of the lease. Only the leaseholder of the flat can evict the sub- tenant, the landlord (and possibly the management company) can only seek to enforce the lease terms against the lessee. If the lease requires consent to sublet you have a problem: if not, then you do not have a problem.

Before we leave the law, let us remember that the early stages of litigation are rarely about the law, and are more frequently about litigation tactics and money. Few residents associations have any money to litigate, most management companies have to use service charge money to litigate, and most landlords have already found that litigation, even if they “win” leaves a very nasty taste in the mouth and a big hole in the pocket. Now let us turn to the Uncle Arthur advice. Read the lease and be sure of both your sub-letting rights and responsibilities as well as the landlord’s/ management company’s rights and responsibilities. At all times conduct your communications with the relevant person from a position of being well informed and courteous. Be ready to provide copy documents if asked. For your own benefit, as well as theirs, take reasonable steps to ensure that your proposed tenant is suitable for this flat and lease terms. If you need consent, comply with their reasonable terms for considering your application. If they are unreasonable, make sure you have all your paperwork in order for the forthcoming bust-up. Be well informed on the rules about landlords waiving breaches of lease for the reason that many ill informed landlords/management companies are very quick to claim a breach, threaten forfeiture but continue to demand and collect ground rent or service charges, thereby, often, waiving the breach. Occasionally, once they realise the difficult position they’ve started, they stop demanding and collecting service charges to avoid the risk of compromising their claim of a breach. If the law takes a long time to turn its wheels (as it often does) the landlord/management company might find that it has been more than 18 months since it last notified you of service charge costs and liabilities, thereby giving it a huge recovery problem because of s.20B of the Landlord and Tenant Act 1985. Like I say: it’s all about tactics and money! Try to resolve your issues by discussion. Fee earning professional advisers love people who naively believe that law is about justice. ●

ArmA GUIDANCE

Lessees and Resident ManageMent CoMpanies

lan 23

Many blocks of flats are owned and/ or managed by companies made up of the leaseholders. These are usually known as Residents’ Management Companies or Right to Manage Companies (RMCos). The role of lessee and the role of a shareholder or member of an RMCo is not the same and directors of RMCos need to keep a clear distinction between the two because problems may arise if the roles are confused.

WHAT ARE THE DISTINCTIONS BETWEEN A ‘SHAREHOLDER’ AND A ‘LESSEE’?

There are both legal and practical reasons why these two creatures are separate and distinct from each other, even though they may be the same person(s). A shareholder or member of the RMCo will be entitled to take part in decision-making (albeit probably restricted to voting for the removal of the board) and will have a say at company meetings. If they think that the board has wrongfully exceeded its powers, they may take the company to court under the Companies Act 2006. Their liability to the company and its creditors is limited to the extent of their share-holding or guarantee (commonly £1). They cannot otherwise be forced to participate in the company. A lessee however is contractually bound under his lease to abide by his covenants to the RMCo or landlord, including the payment of service charges. Any breach of covenants renders the lessee liable to court action (possibly forfeiture of their lease) and/or an application to the LVT. These can be ignored (and often are) but the lessee cannot escape the consequences at the end of the day.

This Lessee Advisory Note points out the importance of the distinctions between the role of lessee and shareholder or member of an RMC

Meanwhile, if the lessee considers that the RMCo is in breach of its covenants, or has acted or charged unreasonably, they may take the RMCo to court or to the LVT under landlord and tenant legislation. The lessee’s rights are not fettered by the fact that they are also a member of the RMCo. This all makes sense in practical terms because the requirements of a shareholder and a lessee can be entirely different – even opposite on occasions. From a legal point of view, the fundamental issue is that a shareholder’s or company member’s interest is entirely personal, whereas holding a lease vests the flat in the lessee for the time being. So an RMCo board or AGM should not (and has no legal right to) take a decision that is against the terms of the leases for the block, even if there is complete unanimity. Nor should any agent advise an RMCo to do so. Indeed to protect its position the agent should give strongly worded written advice to the directors that any such decision is incorrect and may lead to severe problems for the directors. Even if a lessee/shareholder voted for a course of action at the RMCo meeting it does not prevent them from changing their mind at a later date and asking an LVT to overturn that decision. As has been commented by LVTs, evidence of agendas and minutes of

The requirements of a shareholder and a lessee can be entirely different – even opposite...

RMCo meetings are not relevant to the issues of reasonableness and payability of service charges. What is relevant are the terms of the leases and compliance with landlord and tenant legislation.

DUTIES TO LESSEES OWNED BY RMCOS

The duties to the lessees will be set out in the leases, and can take two forms: either the RMCo is a party to the leases with its covenants set out expressly; or the RMCo will be directly responsible for performing the landlord’s covenants (at least insofar as they relate to management matters). Either way, the fact that lessees are also shareholders or members provides the RMCo with no excuse for failing to perform its obligations under the leases. In any event, there may well be lessees who are not members of the RMCo. Contractual duties (such as to repair, maintain, insure and account for service charge funds) are combined with statutory duties (including restricting service charges to reasonable amounts and consultation) and are owed to all lessees by the RMCo as though it were an institutional landlord; the law recognises no difference. Consequently, it is essential that the RMCo’s directors and those advising them are familiar and up-to-date with landlord and tenant legislation as well as the Companies Act 2006.

DISTINCTIONS BETWEEN SERVICE CHARGES AND COMPANY EXPENDITURE

Just as the same person can be two separate legal entities, a similar situation can arise with money. The RMCo will have control Summer 2012

Flat Living

Companies House - then these costs should be paid for by the RMCo from funds it has as a company, not from service charges paid by lessees.

These two creatures are separate and distinct from each other, even though they may be the same person

CONSULTATION ON MAJOR WORKS AND LONG TERM AGREEMENTS

The fact that lessees are members of the company and may well have agreed to various proposed schemes at the company’s AGM does not exempt the RMCo from complying fully with the statutory consultation requirements in S.20 of the Landlord & Tenant Act 1985 (as amended by the 2002 Act). Neither can it be said that the RMCo equates to a recognised tenants’ association for the purposes of S.20, or that any individual lessee can be prevented from exercising their rights under the Landlord & Tenant Acts by having voted in favour of proposed expenditure at the AGM. Failure to comply with the consultation regime is likely to render substantial expenditure irrecoverable and may make the directors personally liable for the costs.

TAXATION

PREPARATION OF ANNUAL ACCOUNTS

The requirement for an annual statement of account for service charges will be set out in the lease. This is not the annual account of the RMCo which is required by Companies House. Best practice for the service charge account is set out in guidance issued by the Institute of Chartered Accountants in England and Wales (ICAEW) and ARMA, downloadable from the ARMA website (see further information below). The approval of

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Summer 2012

ADMINISTRATION COSTS OF RUNNING THE RMCO

It is rare that a lease will allow for the administration costs of the company to be recovered from the service charge. If the RMCo is a Right to Manage Company then it will certainly not allow for this. Many RMCo company secretaries (and indeed some managing agents) have failed to appreciate the significance of this. If the lease does not expressly allow for the costs of running the RMCo to be recovered as a service charge cost - examples are the directors & officers liability insurance, annual returns to Companies House and preparation of annual accounts for

HOW IT ALL WORKS Shareholders OWN

The Management Company APPOINT THE LEGAL RELATIONSHIP

the service charge account is not something for the shareholders or members of an RMCo. The lease may require the statement to be certified or audited or otherwise but it should be issued to all lessees - not just those who are shareholders or members - without approval of the shareholders of the RMCo. The annual account of the RMCo for Companies House purposes is a requirement of company law. This statement may need an audit or not - this depends not on leases but on the Articles of Association of the company. The approval of the annual accounts for an RMCo is something that must be done by the directors of that company. Again it is not a matter that requires the approval of the shareholders of the company at an AGM. The requirement for the directors to approve is set out in the Companies Act 2006.

ARE ALSO

over two separate funds: the service charge and the company’s own money. The company’s funds derive from its share capital and subscriptions or levies from members. If it owns the freehold the RMCo may also charge ground rents or receive income from the sale of lease extensions. The service charge fund is made up of contributions from lessees in accordance with the terms of their leases. The RMCo is a statutory trustee for these contributions (S.42, Landlord & Tenant Act 1987) and the beneficiaries under the trust are the lessees. One of the trustee’s fundamental duties is to account for all funds received and disbursed. Service charge monies are not ‘owned’ by the RMCo and should not be accounted as assets of the company as such. The leases will (hopefully) set out clearly how service charge monies may be spent. Both contractually and by statute, service charge monies can only be spent on items authorised under the leases and further such expenditure must be reasonable. It is good practice to keep the company and service charge monies separate.

Taxation of any interest earned from service charges received is taxable as trust income the current rate is 20%. Service charge monies paid to RMCos are deemed by statute to be held in trust as explained above. Any monies held by the company that are not service charges, including ground rents, are taxable at the rate for corporation tax.

Board of Directors APPOINT

Managing Agents RUN THE MANAGEMENT

Lessees

FURTHER INFORMATION

Residential Service Charge Accounts Guidance is downloadable from www.arma.org.uk ● For more details and links to specialist information, go to the ARMA website at www.arma.org.uk Association of Residential Managing Agents Limited (ARMA) Tel 0207 978 2607 Fax 020 7498 6153 Email info@arma.org.uk Website www.arma.org.uk

ArmA MANAGING AGENTS DIRECTORY North East

Adair Paxton LLP  0113 2054190 Appletons  01642 675 555 Atlantis Estates Ltd  0800 612 1515 Avoca Estate Management Ltd  0191 212 5030 Countrywide Estate Management  01482 215 545 Eddisons Residential Ltd  0113 243 0101 Goldsborough Estates  0800 731 6237 GVA Grimley  0113 280 8018 Inspired Property Management LLP  01302 729 500 Omnia Estates Ltd  0114 2792840 Premier Property Management & Maintenance Co. Ltd  01226 770088 Town & City Management Limited  01325 389689 Town & City Management Limited  0191 404 6822 Town & City Management Limited  0113 251 5044 Watson Property Management  01904 782 022 Watson Property Management  0845 458 1228

North WEst

Atlantis Estates Ltd  0800 612 1515 Base Estate Management Ltd  0843 2160 333 Braemar Estates (Residential) Limited  0161 929 2300 Casserly Property Management  0161 787 6197 Countrywide Estate Management  01942 825 959 Homestead Consultancy Services Ltd  01253 640040 Livingcity Asset Management Ltd  0161 274 1400 Manchester Residential Management Ltd  0161 707 4873 P R Gibbs & Co Ltd  01942 844100 Portland Block Management Ltd  0161 799 6288 Premier Estates Limited  0845 491 8899 Realty Management Limited  0161 474 7677 Revolution Property Management Ltd  0161 850 0022

Royle Estates (Lancaster) Ltd  01524 36311 Scanlans Property Management LLP  0161 236 8888 The Guthrie Partnership  01565 755390 West Kirby Property Management Limited  0151 625 3344

WalEs

Atlantis Estates Ltd  0800 612 1515 Compton Property Management Ltd  01792 315457 Seel & Co Ltd  02920 370100 Western Permanent Property  029 2023 5151

MidlaNds

Atlantis Estates Ltd  0800 612 1515 Bennett Clarke & James  0121 308 6461 Centrick Property Management  0845 6800 981 Cottons  0121 247 2030 Countrywide Estate Management  0121 454 9167 Countrywide Estate Management  0116 254 8364 CPBigwood  0121 233 0500 CPBigwood  01789 294 444 D & B Property Management Company Ltd  0115 979 2794 Freehold Property Services Ltd  0121 551 5988 Hadrian Property Management Company Limited  01543 410922 HLM  01743 271 432 Lambert Smith Hampton  0121 236 2066 Lloyd Property Management  01509 503600 Mainstay Residential Ltd  01905 357777 Metro PM  0121 428 4747 Michael Laurie Magar Ltd  0121 456 6503 Nock Deighton  01746 766998 Orchard Block Management Services Ltd  01604 620 422 Pennycuick Collins  0121 665 4150 Philip Laney & Jolly  01684 575100 Regalty Estates  0845 456 4980 Robert Oulsnam and Company  0121 445 2499

Stiles Harold Williams

 0121 351 4716

Watson Property Management  0845 675 5676 York Laurent Ltd  0121 236 5757

EastErN

Amber Management  0845 2713300 Atlantis Estates Ltd  0800 612 1515 Banner Property Services Ltd  01628 522888 Boydens  01206 762244 Broadlands Estate Management LLP  01908 555 888 Bush Property Management Ltd  01603 614004 Carringtons Residential Management Ltd  01279 408740 Consort Property Management  08451 947044 Countrywide Estate Management  01442 242726 Countrywide Estate Management  01268 245 553 Countrywide Estate Management  01702 221000 Covenant Management  01993 847 601 CS2 Residential Management LLP  01908 507787 DJC Property Management Limited  0870481 0110 Francis Butson & Associates  01480 226740 Hillcrest Estate Management Ltd  01277 356231 Homes & Watson Partnership Ltd  01277 355200 Hurford Salvi Carr Property Management  01992 515576 Jakes Property Services Ltd  01277 651432 Lucy Block Management Limited  01865 559973 Marlborough House Management  0845 450 6022 Maunder Taylor  01707 871710 MCS  01920 466500 Norwich Residential Management Ltd  01603 670 050 OM Property Management  01582 393700 Peerless Properties (Oxford) Limited  01869 331198 PMS Leasehold Management Ltd  01206 835350

Qualitas Residential

 01923 211331

Qube Property Management  0871 200 1992 Red Brick Management Ltd  01438 303 333 Residential Management Group Ltd  0845 002 4444 Rounce & Evans Property Management Ltd  01485 544740 Rumball Sedgwick  01727 854516 Sheridan’s  01462 814087 Sorrell  01702 342225 St Andrews Bureau Ltd  01223 352170 Touchstone  01908 633918 Trinity Estates  01442 437655

GrEatEr loNdoN

Abbott Management  020 7495 5085 Adelaide Jones  020 7725 5800 Alliance Managing Agents Ltd  020 3328 1950 Allsop Residential Investment Management Ltd  020 8675 7046 Amber Management  01992 769143 Andrews Letting & Management  0800 032 3772 Arkleygate  020 8731 4577 Aspect Property Management Limited  020 7581 7900 Aston Rose  020 7629 1533 Atlantis Estates Ltd  0800 612 1515 Bells Chartered Surveyors  020 7228 4470 Blenheims Estate and Asset Management Limited  020 7368 4150 BLR Property Management  020 8905 8345 Bowood Commercial  020 7223 6940 Buckingham Management Services  020 7839 2347 Capital Property Management  020 7328 4001 Carringtons  020 8960 0001 Castlebar Management Ltd  020 8991 2564 Castlereagh Management Limited  020 7258 9670 Chainbow  020 7928 9944 Chelsea Property Management Ltd  020 7584 7850 Chesterton Humberts  020 3040 8481

City Estates

 020 8809 5051 ext 0022

CJ Delemere International  020 8444 9914 Cluttons LLP  020 7647 7196 Colin Bibra  020 8566 3333 Colin Cohen Property Management  020 8959 6870 Countrywide Estate Management  020 8686 7773 Crabtree PM Limited  020 8371 7070 Crabtree Property Management LLP  020 8371 7070 Craig Sheehan  020 7385 5020 Crescent Estates Management Ltd  020 7352 0761 Dauntons Soar Management Limited  020 7834 1032 Defries & Associates Ltd  020 8202 0759 Dillons  020 7561 5230 Douglas & Gordon  020 7963 4650 Drivers & Norris  020 7607 5001 E A Shaw Chartered Surveyors  020 7240 2255 ERA Property Services Ltd  020 7837 6186 Esskay Management Services  020 7331 8888 F W Gapp (Management Services) Ltd  020 7221 8838 Farebrother  020 7855 3500 Farrar Property Management  020 7341 0220 Fifield Glyn  0207 629 6457 Fresson & Tee Ltd  020 7391 7100 Fry & Company  020 7821 0099 Galleons Point Management Ltd  020 7511 8585 Gordon & Co (Property Consultants)  020 7724 4477 Grace Miller & Co.  020 8944 9889 Granville & Company  020 8995 5284 Hallmark Property Management Ltd  01992 761 419 Harrods Estates Asset Management  020 8479 5260 HML Hathaways Ltd  020 8492 1111 HML Hawksworth Ltd  020 7802 0000 HMR London Limited  020 7591 0931

Summer 2012

Flat Living

MANAGING AGENTS DIRECTORY Houston Lawrence Management Ltd  020 7801 9009 Ian Gibbs  020 8370 4810 Investment Solutions  020 8286 9285 Islington Properties Limited  020 7812 0480 Kensington Flats  020 7589 6699 Kinleigh Folkard & Hayward  020 8739 2150 Knight Frank LLP  020 7861 1140 Lamberts Chartered Surveyors  020 7278 8191 Lewis & Tucker  020 7323 2321 London Block Management Ltd  020 7870 4000 London Residential Management Ltd  020 7438 1080 M H Associates  020 7737 2552 Mainstay Residential Ltd  01905 364 007 Managed Living Partnerships Ltd  020 7117 6611 Management Accountants Ltd  020 7224 5678 Martyn Gerrard  020 8343 4340 May & Co Management Ltd  020 7376 3726 Michael Laurie Magar Ltd  020 8492 9850 Moonstone Management  0208 269 3031 My Home Surveyor  020 7183 9020 Parkgate-Aspen Property Management  020 8732 8888 Parkwood Management Company (London) Ltd  020 8368 8111 Pembertons Residential Ltd  0207 483 8429 Pinnacle Housing  020 7017 2000 Premier Management Partners Ltd  020 8457 2955 PRESIDE  020 7224 0011 Qbit Property Management Ltd  0208 320 2718 Quadrant Property Management Limited  020 7386 8800 Rendall & Rittner Ltd  020 7702 0701 Residential Block Management Services Ltd  020 8318 5544 Ringley Chartered Surveyors  020 7428 1976 RMC (The Residents Management Co.)  020 8748 1229 RMD Properties (London) LLP  020 7723 2111

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Summer 2012

Roger McMillan Properties Ltd  01932 576444 Salter Rex  020 7267 2071 Scotts  020 8789 1200 Sears Morgan Property Management Ltd  0844 257 2222 Sinclairs Block Management  020 7221 4935 Smith Waters LLP  020 7839 3950 St Anselm Property Management Ltd  020 7495 3599 Stiles Harold Williams  020 7389 1501 Stonedale Property Management Limited  020 3117 2600 Sutton Heights Management Services Ltd  020 7585 2202 The Management  020 7231 3545 The Robinson White Partnership Ltd  020 8255 6298 TMS South Ltd  0844 800 7931 Urang Property Management Limited  020 7751 8356 Woollens of Wimbledon Ltd  020 8542 9551 Y & Y Management Ltd  0208 211 1550

South EaSt

Acorn Estate Management  020 8315 5533 Allsop Residential Investment Management Ltd  01273 322037 Amax Estates and Property Services Ltd  01474 564444 Arko Property Management Limited  01424 439786 Atlantis Estates Ltd  0800 612 1515 Ayling & Strudwick  01444 415222 Bartholomews  020 8546 9441 BBM - Burkinshaw Block Management  01892 501100 Belgarum Property & Management Ltd  0845 330 0727 Blake Property Management Ltd  01296 614882 Bourne Estates Ltd  01202 784280 Bridgeford & Co  01590 677725 Bridgeford & Co  01424 439242 Broadleaf Management Services Limited  01425 403 767 Burns Property Management  01202 391663 Campsie  01753 410705

Canbury Management Ltd

 01784 466501

Castleford (Poole) Ltd  01202 682299 CastleKeyes  01420 566860 Caxtons Commercial Ltd  01474 537733 Cleaver Property Management Ltd  0844 499 3411 Clifford Dann LLP  01273 407 900 Concept Property Management Ltd  020 8916 2468 Countrywide Estate Management  01329 285858 Countrywide Estate Management  01273 608 746 Denfords Property Management  023 8038 6970 DMA Chartered Surveyors  02380 629823 DMG Property Management Limited  01622 831017 Edgerley Simpson Howe LLP  01932 860 505 Estate & Property Management Ltd  01444 410069 F & S Property Management (So’ton)  02380 226686 Fell Reynolds  01303 850 125 Fortune Management  020 8905 1621 Foxes Property Management Limited  01202 299099 Frank Bailey & Partners  01256 473400 GCS Property Management Limited  01932 254090 Graves Son & Pilcher LLP  01273 321 123 Gray Property Management Ltd  02392 597567 Hamilton Townsend  01425 877 900 Hamways Ltd  01883 730890 Hazlett Cox  020 8891 1601 Heritage Management Limited  01737 850260 HML Andertons Ltd  0845 177 8800 HML Andertons Ltd  0330 300 0004 HML Andertons Ltd  0330 300 0005 HML Shaw Ltd  020 8948 3211 Hobdens Property Management Ltd  01903 724040 Homecare Property Management  01425 270751 House & Son Property Consultants Ltd  01202 244824

Housemartins Property Management  01323 896418 Huggins Edwards & Sharp  01372 455246 Hydehead Ltd  01273 579796 Itsyourplace Limited  0845 094 0854 Jacksons  01273 204401 JH Property Management Limited  01795 599 010 JJ Homes (Properties) Ltd  020 8296 0181 John Mortimer Property Management Ltd  01344 823650 Jordan & Cook Ltd  01903 820740 Kent Gateway Block Management  01634 814867 Leasehold Management Limited  01903 238909 Leasehold Management Limited  01403 251 570 Minster Property Management Limited  01202 883360 / 01202 842812 Omnicroft Ltd  01634 362097 Owens & Porter Limited  01202 522012 Oyster Estates  01243 586939 Parsons Son & Basley  01273 274063 Parsons Son & Basley  01243 868600 Peter Overill Associates  01273 820202 Pinnacle Property Management Ltd  01189 320180 Prior Estates Limited  020 8676 3020 Priors  01273 737586 Rayners  01883 742690 Rebbeck Brothers  01202 780 780 Ross & Co Property Management 01323 642 426 Stiles Harold Williams  0239 229 0229 Stiles Harold Williams  01323 437 900 Stride & Son  01243 813760 Sweetings Property Management Limited  020 8941 7799 Watson Property Management  0845 675 5541

South WESt

Andrews Letting & Management  0117 929 4400 APA Management & Lettings Ltd  01803 214861

ArmA Atlantis Estates Ltd

 0800 612 1515

Belmont Property Management  01872 260606 Blenheims Estate and Asset Management Limited  01626 779200 Blenheims Estate and Asset Management Limited  0117 973 0041 BNS Management Services 0117 9570 809 Carrick Johnson Management Services Limited  01803 389211 Chilton Estate Management Limited  01225 442431 CMG Leasehold Management Ltd  01452 331 289 Cotswold Property Management Services Limited  01453 825694 Countrywide Estate Management  01392 824430 Countrywide Estate Management  01793 420400 Crown Leasehold Management  0117 9596507 Crown Property Management  01803 324405 ETC Block Management Ltd  01395 275223 Hamilton Townsend 01202 765 404 Hillcrest Estate Management Ltd  0117 973 0600 Hillsdon Management Ltd  01395 517950 HML Andertons Ltd  0330 300 0003 Initiative Property Management Ltd 01202 309 569 Napier Management Services Limited  01202 314511 Napier Management Services Limited  01425 650656 Peter Haddon Property Management Services  01752 256600 Red Brick Management Ltd 0845 8621 823 The Flat Managers Ltd  01242 210 908 TMS South West Limited  0844 800 7931 Tuffin & Co Property Management Ltd  01752 254 222 West of England Estate Mgmt Co Ltd  01225 485910 For more information on aRMa members please visit www.arma.org.uk

WWW.FLAT-LIVING.CO.UK

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Looking for Estate Management 30 years in the business gives us an understanding of what works. Whether we take on an existing property or help out from early in the planning process, our experience can make a real difference. Contact us today for a specification and quotation Call 020 8739 2150 Email propman@kfh.co.uk

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84 Coombe Road, New Malden, Surrey KT3 4QS 020 8605 1200 mail@gracemiller.co.uk www.gracemiller.co.uk

GRACE MILLER & CO LIMITED

Bespoke Residential Block Management Understanding that all properties are diﬀerent is key to our management.

www.blockmanagement.com 020 7870 4000

A Leading Independent Managing Agent

Central London: 2nd Floor 114 Rochester Row London SW1P 1JQ Head office: Marlborough House 298 Regents Park Road London N3 2UU T: 020 8371 7070 E: post@crabtreeproperty.co.uk www.crabtreeproperty.co.uk

Our portfolio covers the South East Region, London & the Home Counties, East Anglia, Wales and more ...

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LONdON BLOCk MANAGEMENT LTd Tel 020 7870 4000 Website www.blockmanagement.com Email info@blockmanagement.com

HML HATHAWAYS Tel 020 8492 1111 Website www.hmlhathaways.com Email info@hmlhathaways.com

STONEdALEPROPERTYMANAGEMENT Tel 020 3117 2600 Website www.stonedale.co.uk Email info@stonedale.co.uk

kiNLEiGH fOLkARd & HAYWARd Tel 020 8739 2150 Website www.kfh.co.uk Email propman@kfh.co.uk

ACORN ESTATE MANAGEMENT Tel 020 8315 5548 Website www.acorn.ltd.uk Email kim.ward@acorn.ltd.uk

GRACE MiLLER & CO Tel 020 8605 1200 Website www.gracemiller.co.uk Email mail@gracemiller.co.uk

GORdON & CO Tel 0207 724 4477 Website gcmanagingagents.co.uk Email management@gcmanagingagents.co.uk

HLM SHAW Tel 0208 948 3211 Website www.hmlshaw.com Email info@hmlshaw.com

HML HAWkSWORTH Tel 020 7802 0000 Website www.hmlhawksworth.com Email info@hmlhawksworth.com

JJ HOMES Tel 020 8296 0181 Website www.jjhomes.co.uk Email info@jjhomes.co.uk

ACORN ESTATE MANAGEMENT

hmlshaw

Specialists In Block And Estate Management Throughout South East London & Kent

Property & Estate Management

Specialist Property and Estate Management in south-west London, Surrey and Berkshire E info@hmlshaw.com W www.hmlshaw.com

• Legislation Compliance • Health & Safety • Competitive Buildings Insurance

• Arrears Collection • Project Management • Year End Accounting • ARMA Member

To Arrange A Meeting Contact Kim Ward On:

020 8315 5548

kim.ward@acorn.ltd.uk

www.acorn.ltd.uk

TW9 1BP

Flat Living

F 020 8948 8734

Online

Surrey

T 020 8948 3211 Contact

Address

9-11 The Quadrant Richmond

In addition to day to day management:

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MERLiN ESTATES (EAST) LiMiTEd Tel 01920 877 458 Website www.merlin-estates.uk.com Email info@merlin-estates.uk.com

PEMBERTONS PROPERTY MANAGEMENT Tel 020 7483 8429 Website www.pembertonspm.co.uk Email customerservices@pembertonspm.co.uk

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Give us a call for advice: 01226 770088

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FIND AN AGENT

casserlY PrOPertY ManageMent tel 0161 787 6197 Website www.casserlypm.co.uk email paul@casserlypm.co.uk

Western PerManent PrOPertY tel 029 2023 5151 Website www.wppmc.com email info@wppmc.com

MetrO PM tel 0121 428 4747 Website www.metro-pm.co.uk email mail@metro-pm.co.uk PreMier PrOPertY ManageMent tel 01226 770088 Website www.pp-mm.co.uk email daniel@pp-mm.co.uk

cP BigWOOD tel 0121 233 7272 Website www.cpbigwood.com email bwilliams@cpbigwood.com

PreMier estates tel 0845 491 8899 Website www.premierestateslimited.com email info@premierestateslimited.com

PennYcUicK cOllins tel 0121665 4150 Website www.pennycuick.co.uk email info@pennycuick.co.uk

JaKes PrOPertY serVices tel 01277 651432 Website www.jakesproperty.co.uk email info@jakesproperty.co.uk

MarlBOrOUgh hOUse ManageMent tel 0845 450 6022 (lo-call) Website www.m-h-m.co.uk email newbusiness@m-h-m.co.uk

Kent gateWaY BlOcK ManageMent tel 01634 814867 Website www.kgbm.co.uk email info@kgbm.co.uk

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APPOINTING A MANAGING AGENT

Your block needs a property manager. What do you do next? On the following pages we look at the benefits and pitfalls of appointing a managing agent and offer some advice about what to do if your agent doesn’t provide the level of service you expect

Appointing a

agent managIng *

The role of a managing agent is complex and requires a professional approach to get it right. To carry out the role successfully requires knowledge of landlord and tenant legislation, an understanding of building construction, familiarity with the health and safety regulations, basic accounting and more. Before you appoint an agent, here are some of the aspects you and your fellow RMC directors should consider. First, draw up a schedule of all the services you need from a prospective agent. The Association of Residential Managing Agents (ARMA) provides a checklist (see website details at the end of this article). Make a shortlist of potential agents - ask other flat owners or fellow residents in your own block for their recommendations as well as going to the websites of local agents to get basic information about their location, services and contact details.

Is my agent properly qualIfIed?

When you are appointing an agent to manage your block, look out for firms that carry membership of an established professional trade body. Appointing a qualified agent offers you protection against negligence and access to an official complaints handling procedure if something goes wrong as well as insurance protection for your service charge money. It also means that the agent you use is likely to offer a higher quality of service than a company that is unregulated.

askIng the rIght questIons

Always invite potential agents to come along to meet you informally before asking for a formal tender. Make sure you have a copy of a standard lease for the block and an annual statement of accounts. Any good agent will want to look at these if they are to tender for the job. At the meeting there are a number of issues that should be raised: n Be upfront about any problems you think will need to be tackled such as current debtors, relations with any existing or former agent

Flat Living

Summer 2012

meet potential agents before asking for a formal tender

“I think the most important services a managing agent can provide are sound financial control/ accounting and independent professional judgement. The position is fundamentally one of trusteeship and if this is always at the forefront of an agent’s thinking then many consequences follow naturally, including the need for best value purchasing, financial transparency and a respect for the interests of the beneficiaries of the trust, who are the lessees.” duncan rendall, chairman, Rendall & Rittner

and the state of the block’s current finances. The agent will ask you a range of questions to determine what he or she might be taking on. n Find out who will be your key contact if the agent in question takes on your property management. Be sure to emphasise that you want to meet that person in advance of making a decision. Also ascertain what will

happen if that person is sick or on holiday. n Find out who will handle phone calls and emails from RMC directors and flat owners. n Who will choose contractors that are used to carry out works on your block? Do you want to retain final approval? If so, make that clear from the outset. n Ask about disclosure of commissions –

APPOINTING A MANAGING AGENT including insurance if this is something you want the agent to arrange for you. Agents shouldn’t take any commissions from service contracts unless they are agreed in advance by the RMC directors. n How often will you get financial reports on service charge income and expenditure? Will you be able to see the invoices and receipts documents at regular intervals? Once you have a shortlist of agents, speak to the RMC directors in other blocks managed by those agents. How happy are they with the service they are getting? Don’t forget to check out any references or testimonials you have been given.

“Comparing managing agents’ charges can be like comparing apples with pears. Many agents will quote a low management fee but derive all sorts of other income from the management of a development, whereas others will charge an all-inclusive fee. Leaseholders should total up all fees received by an agent in order to make a proper comparison.”

Does my agent have the right insurance?

be sure that the agent has the means to pay compensation or damages should the worst case scenario unfold.

It is important to confirm any prospective agent’s professional indemnity insurance. If the agent is a member of a professional or trade association PII will be an automatic condition of membership. However, the existence of the cover – and its scope – should be checked. Where an RMC/RTMCo delegates tasks to a managing agent, the residents’ company will still be legally liable for any neglect, omission or mistake made by the agent. So you must

Ben Jordan, managing director, Premier Estates

Working to coDes of Practice

Any managing agent you appoint should work in accordance with approved Codes of Practice. The government has to-date, approved two codes for use in the residential leasehold market. One is produced by the Association of Retirement Housing Managers (ARHM)

What happens if it all goes Wrong? With the best Will in

the world, sometimes a relationship just doesn’t have a future. If you find that your managing agent isn’t providing the service you need, or you simply don’t get on with each other then it is probably best to cut your losses and move on. But how easy is it to terminate your contract? First, check your management agreement. The terms and conditions should set out the period of notice required for you to terminate your contract. If there is no period specified, you and your fellow RMC directors must decide what period of time would suit you best. Important aspects to consider include: n If it is appropriate, arrange to terminate your agreement on a date that fits in with service charge payment periods or the end of the accounting year to make handover and accounting easier. n What is the current

financial position of your block – is the service charge account in credit or debit? n Are there large, outstanding arrears that will make it difficult for another agent to provide services? If you are not sure, ask the current agent. n Is your existing agent owed any unpaid management fees that may be disputed? n What documents will be handed over to the new agent so that management can carry on smoothly? Draw up a list of what you require or ask the new agent to propose a list. n What

sort of accounting statement will be drawn up as at the date of termination? Do you need an external accountant to check it and if so, who will pay the fee? These practical aspects of property management and service charge accounting are very important and if dealt with correctly will save a lot of time and effort all round. Never simply appoint a new agent and expect him/her to sort out a mess. The RMC directors should try to establish the true extent of any previous or existing problems and be honest with the new agent about these issues and the reasons why they have occurred. Dealing with messy handovers from the previous agent is not part of your new agent’s remit – if you leave him or her literally to pick up the pieces, you may find yourselves with an additional fee before you have started working together.

●

Don’t expect your new agent to pick up the pieces

and one by the Royal Institution of Chartered Surveyors (RICS) and they are to be used by agents working for flat owners paying variable service charges, not on retirement schemes. When appointing an agent, always ask the company to confirm that it complies with the relevant code.

DraWing uP a contract

When drawing up a contract with your agent, you have two choices. Either ask your solicitor to draw up the contract for you or ask the agent to use one of several models developed by the relevant professional bodies. These cover most situations and can be adapted to suit the needs of your block. Make sure you include in the contract a list of documents that will have to be passed on if the contract ends. No agent can work in a vacuum. It is critical to the future success of your relationship with your agent that certain arrangements are established at the outset. These include: n What responsibilities and authorities the agent will have; n How much service charge money they can spend without the authority of the RMC directors; n Response times and other timescales for action; and n The authorised lines of reporting and communication. It is also vital to determine who will be instructing the agent – this sounds obvious but it is easily forgotten. Property managers can’t work if given conflicting instructions from a number of different people. Appoint one or two key contacts and ensure the agent knows to refer to them if he or she is asked to do anything by someone else. It is also important to remember that your agent cannot accept instructions from anyone, whether an RMC director or a flat owner, which would put him or her in breach of any landlord and tenant law, code of practice or other statutory guidance such as health and safety legislation.

ask arma

ARMA produces a very useful guide to Appointing a Managing Agent which provides RMC/RTMCos with plenty of background information on this subject as well as a checklist of useful questions to ask prospective agents, a checklist of services and a sample letter inviting tenders for property management. To download a copy free of charge, go to www.arma.org.uk ● Summer 2012

Flat Living

Do GOOD managing agents really

exist?

PAuL CASSERLy tells

Flat Living why he became a property manager

AFTER APPOINTING SEVERAL managing agents for new residential developments in the North West of England, regional developer Castle Homes North West thought the answer to the question of whether there is such a thing as a good property manager was a resounding ‘No’. Witnessing the frustration that poor management creates and having a sense of obligation to their clients, the company took the decision to manage their own properties. In 2008 Casserly Property Management was established in Manchester, with leaseholder’s needs as its core value. “From our own experience we knew leaseholders did not want to report a problem to a faceless call centre where the person to whom you were speaking had never visited the city you live in, never mind your development,” says director Paul Casserly. “Residents do not want to send an email to customer services@..... they want to contact their personal property manger directly and easily.” Paul is firm in the belief that property managers should know about the development you live in and should have met you at a residents meeting or AGM. His view is that residents also want a property manager whose office is only a short drive away and will therefore visit your development regularly to undertake site inspections, ensuring any issues are dealt with quickly before they become a problem. “Equally, if managers are locally based, they can be called out quickly to resolve a problem anytime,” he says . Would you employ a letting agent in London if you wanted to rent out your apartment in Manchester? The answer is undoubtedly ‘no’. So why would you employ a managing agent based in another city to manage your whole development? Casserly Property Management recently took over an apartment block in

Flat Living

Summer 2012

Locallybased managers can be called out quickly

Manchester that had been managed by an agent from London who, unsurprisingly, had never visited the block during its whole time as managing agent. Paul thinks perhaps David Cameron’s localism agenda has a point after all. It is not only a local service that makes a property manager worth appointing. In Paul’s experience, leaseholders also want an annual preventative maintenance programme that avoids expensive reactive call–out charges, as well as unnecessary inconvenience to themselves such as the lift breaking down or the automatic gate to the car park not working. They also want to know that buildings insurance and contractors’ costs will not automatically rise year-on-year even

A customer servicefocused approach is long overdue in the industry in a recession. “This is the quickest way to give the impression that the managing agent simply does not care how much the service charge cost is,” says Paul. Some managing agents seem to think that if they don’t respond to residents’ problems or questions they will eventually stop contacting them and leave them alone. The end result of this is that leaseholders assume poor service is the norm. “Relying on the apathy of leaseholders seems to be embedded in the values of poor managing agents,” says Paul. So what is the solution?

Paul’s advice to leaseholders is to remember that their managing agent works for them. “The managing agent is often on a yearly contract and hence has a year to deliver a first class service. If they fall below par it is the leaseholders’ prerogative to replace them with a more competent one. This is often delayed or put off because to change managing agents is presumed to be a long arduous process.” In fact contrary to popular belief, it can take little more than a phone call to the right ARMA accredited managing agent who will guide you through what is really quite a simple process (turn to p48 of this issue for more on changing agents). Paul believes that many residents in blocks around the country have put up with poor service from their property agents for far too long and a customer service-focused approach is long overdue in the industry. In answer to the question “Do good managing agents really exist?”, his answer is “Yes, as long as you choose wisely”. ●

Casserly Property Management Manchester-based Casserly Property Management was established as a Managing Agent in 2008. The company currently manages 20 developments. Paul Casserly can be contacted on: Tel 0161 787 6197 Email paul@casserlypm.co.uk Website www.casserlypm.co.uk

APPOINTING A MANAGING AGENT

Getting it right

first time

RMC director alaN WalkEr offers some tips for finding the right manager for your block

First oF all, know what you want when you

plan your search. I have served on two boards, one in a development of 38 flats and one of around 160. On the face of it, these are very different estates, but size is not necessarily important. In my experience, the services and approach required from a managing agent are much more strongly influenced by the history of the block management and the working style of the RMC board than by the size of the block in question. For example, an RMC which has previously self-managed and is looking to take on an agent for the first time may be looking for a partner to provide advice on the increasingly complex legislative environment and offer ‘light touch’ support. It is essential to the smooth running of the search and selection process that the RMC is clear about this, and that they communicate it clearly to potential agents. Where a board is seeking to change its managing agent, they should take time to consider carefully the reasons why they want to make the change. Identify the things which are causing dissatisfaction with the existing agent and which the new agent should do differently. If a board finds it is changing agents on a regular basis, they should not be afraid to take a look at the politics and processes of the board itself - is the common thread of dissatisfaction bound up in the actions or approach of the RMC rather than with the appointed agents? Ask for recommendations from RMCs on other estates which you know to be well-run. Always interview potential agents, and take up references; make sure you see the team who will look after you rather than just the new business team – they may be quite different. Chemistry is vital to the relationship - this is not just a business transaction, this is about people’s homes and lives. It is necessary to commit time and thought to your search – but well worth it to find the right agent for the block.

Building a working relationship

Once you have found the right agent, you then have to work together to ensure your block is effectively managed and that the agent is fulfilling your expectations. The key to this is communication, communication, communication. Make sure the appointment process involves a clear brief – and retain this rigour as you set out and update your aims and objectives for the estate as you work alongside

Laugh a lot, talk often and meet regularly the agent. Always double-check that your agent has understood your requirements and instructions. What is said and what is understood may not be the same thing. Set up formal and open lines of communication – with regular updates from the agent to the board so that it is clear to all members, and indeed to the agent and partners, that matters are in hand and progressing.

potential proBlems and how to Beat them

There are a few common issues that cause problems over and over again in the relationship between RMCs and their property managers. I have listed the ones I have come across most frequently. n Misunderstanding – it is important to remember that people can attend the same meeting and hear the same discussion

Chemistry is vital to the relationship yet come away with entirely different impressions of what was said and what is to be done next. n lack of clear instruction – it is very important for RMC boards to make sure that discussion around topics of interest is always closed with an instruction, whether it be to research the question further or to act. n time-lag - time lost between meetings when a board expects action and the agent awaits instruction is frustrating and unconstructive for both parties. n Not communicating problems quickly enough or in enough detail to enable them to be handled – as with any board of

directors in any commercial company, the motto should be ‘no surprises’. It is essential for boards to have news of problems or of possible difficulties ahead, whatever their nature, in order to plan and act to mitigate or avoid them. All of these problems can be avoided or overcome through clear and regular communication.

getting the Best from your manager

My best advice is to laugh a lot, talk often and meet regularly. Treat the management of your block as a professional working relationship – read what the agent sends you; prepare fully for meetings; listen as well as speak. Make sure you select an agent who understands that this is not just any job, but is about people and their most valuable asset – and thus... a very important working relationship for RMC directors who are personally involved in the estate. ● alan Walker Director, Streatham Manor Gardens Ltd, SW16 Email alan_walker@fastmail.fm

Summer 2012

Flat Living

APPOINTING A MANAGING AGENT

Let me tell you what I Managing agent KiM WArd takes flat owners through the selection process and offers some tips for a smooth working relationship

BEforE stArting thE selection process for a managing agent, the directors of the management company or residents’ association should prepare a clear and detailed brief. This is the best way to establish whether or not the prospective agents they are meeting are best placed to provide the services required. First, draw up a schedule of the services you expect from a prospective agent. Your lease and last year’s actual expenditure will assist with this process. Review the areas where you would like to see improvements and then discuss openly any current problems with your prospective agents. This will give them a clear understanding of the current situation and their suggestions for overcoming these obstacles will either reassure you of their ability to manage your block effectively or take them off your shortlist. It is also important to reach an agreement on selection of contractors and any authorised spend limits. Discuss with each agent their experience of attending the LVT (Leasehold Valuation Tribunal) and court hearings. This will be useful if there are arrears to be recovered or if other disputes arise. To ensure that you will be receiving a professional service, ask about staff training and/or qualifications. If they are professionally qualified agents they should have a formal complaints procedure in place. Check that this is the case and that it offers clear time frames for resolution. Any agent you appoint should have professional liability and indemnity insurance to protect against negligence claims.

Keep on talKing

Want

Once you have selected a firm of managing agents, ask to meet with your property manager. It always helps to put a face to the name and will help your relationship to start on the right footing. From the outset, confirm to your designated property manager your requirements so there can be no misunderstandings at a later stage. Set down on paper or in an email your preferred method of communication, the frequency of updates, regularity of meetings and details of the information you require on a

Confirm... your requirements so there can be no misunderstandings regular basis. Also make sure the agent knows when he or she should be seeking authority from the RMC/RTMCo to carry out works or take decisions on your behalf. You may wish to arrange to meet with your property manager when he or she carries out their periodic inspections of your block. This way you will be able to discuss any particular issues in person and will also be aware of the issues being noted and the action the agent proposes to take. Perhaps most important,

this is a good way to maintain a relationship and it will provide your property manager with an ongoing understanding of your requirements.

tacKle problems early

In order to maintain a good working relationship with your managing agent it is best to deal with problems before they become a cause for complaint. The first step is to call or email your property manager to provide them with details of the problem or query. If it is a more complex query, then email is preferable. Ask them if he or she can look into the matter and then call you to discuss. This would be a good opportunity to discuss the query in more detail as the property manager will have put aside time to concentrate on the query in hand. If you are unclear on any aspect, ask your agent to clarify. Similarly if he or she refers you to a covenant within the lease or section of the law, get them to explain in simple terms what it means. If necessary, request an appointment to discuss the matter in person. Leaseholders and directors can obtain free useful advice from www.lease-advice.org Remember………..Your agent will be as keen as you are to resolve any difficulty. ● Kim Ward MARLA, Business Development Manager tel 0208 315 5548 Email kim.ward@acorn.ltd.uk Acorn Estate Management, 19-23 Masons Hill Bromley BR2 9HD Website www.acornestatemanagement.co.uk

cAsE study the CloCk houSe: under new management Acorn EstAtE MAnAgEMEnt

had managed the Clock House, a listed conversion inBromley, Kent on behalf of the Resident Management Company from initial redevelopment of the 13unit block in 2005. New RMC board directors were then appointed, who decided

Flat Living

Summer 2012

they could save costs by self managing the Clock House but the directors found it difficult to juggle full time work commitments while managing the development. This led to a number of the flat owners becoming dissatisfied and withholding their service charges. The directors were unable to collect arrears so opted to instruct a small maintenance company that had turned its hand to

estate management. The RMC directors instructed the new agent to change the service charge apportionments, but unfortunately these did not correspond with the lease. The arrears situation worsened to the point where the majority of leaseholders were withholding service charges. There were no funds for maintenance or insurance. No service charge or company accounts had been prepared and the RMC was due to be struck off at

Companies House. Two of the leaseholders then overturned the existing directors and took the decision to re-appoint Acorn Estate Management. Acorn quickly stepped in to resolve the situation. The managing agent organised for the RMC directors to make a loan to the service charge account, allowing for basic management to resume. Acorn was then able to: n Resolve issues with Companies House n Work with the out-going

agent to establish facts, figures and calculated funds owed to the service charge account n Arrange for all accounts to be drafted n Collect all the service charge arrears. Within 12 months of taking over, all leaseholders at the Clock House are now onboard and cyclical maintenance works are underway. As Acorn’s Kim Ward points out, changing your agent is not difficult but if you find the right property manager from the outset, it should be unnecessary.

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RIGHT TO MANAGE

BLOCK takeover If you and your fellow flat owners are considering taking on the responsibility for managing your block, first you will need to understand the Right to Manage process

Right to Manage or RTM is a

right granted to flat owners under the Commonhold and Leasehold Reform Act 2002. As long as your block and your fellow residents meet the criteria (see The rights and wrongs of RTM p57 for more on this) you are free to take up the right to manage at any time. As RTM is a formal process that requires specific actions to be taken at the right time, flat owners are strongly advised to use the services of a professional adviser specialising in the leasehold sector to help them negotiate RTM successfully. Both the Leasehold Advisory Service (LEASE) and the Association of Leasehold Enfranchisement Practitioners (ALEP) have lists of suitably qualified specialists on their websites (see p56). The first step for flat owners is to set up a Right to Manage Company (see Getting the most out of RTM, p58 of this issue). Once the

RTM company has been registered, it must then formally invite the rest of the qualifying leaseholders to join using a Notice Inviting Participation. This must be in writing and in the prescribed form (Statutory Instrument (2010 No 825)) which can be obtained from the Stationery Office or downloaded from the website at www.legislation.gov.uk. The form must state that the RTM company intends to acquire the right to manage, state the names of the members of the RTM company

The first step for flat owners is to set up a Right to Manage company

and invite the recipient to become a member of the RTM company. It must also include a range of other information required by law. The notice may be served by post, or by simply delivering it to all the flats. If a leaseholder is living permanently abroad, the secretary of the RTM company should make reasonable attempts to send the notice but is not obliged to serve it outside England and Wales. All of those qualifying leaseholders who respond to the notice and who ask for membership must be enrolled as members of the RTM company and the membership noted in the company records. The way in which the Notice Inviting Participation is served is important, which is why it is vital to take specialist advice. The RTM process is then started by serving the landlord with a document known as a ‘Notice of Claim’. In order to do this, you don’t have to prove that your landlord is at fault or that your block is being badly managed and there is no requirement for approval by

Under RTM the RMC is ultimately responsible for maintenance whether or not a managing agent is employed

Flat Living

Summer 2012

RIGHT TO MANAGE

WhAt diRectoRs need to knoW

RTM companies are governed by company law but what does this mean for RMCs? A Right to MAnAge Company is set up, like any other company in accordance with certain rules and regulations. Under these rules, directors have duties that they must adhere to as outlined by The Companies Act 2006. The Act lists these duties as follows: n To act within the powers of the company – a director must act in accordance with the company’s constitution (i.e. the Articles of Association) and exercise his powers for the proper purpose. n To promote the success of the company – a director must act in good faith in the way he considers promotes the success of the company for the benefit of its shareholders as a whole. If the company is not run for the benefit of its members (e.g. a charitable company) then promotion is for the benefit of the company’s purposes. n To exercise independent judgement - this judgement or discretion can be limited if this is in accordance with the company’s constitution. n To avoid conflicts of interest – a director must avoid situations in which he has a direct or indirect interest that conflicts with or may conflict with the company’s interests. However, there are limited situations where such conflicts can be exempted or authorised or where the constitution/ Articles of Association allow the Board to authorise such situations. n Not to accept benefits from third parties – a director must not accept any benefit (including a bribe) from a third party which is given because he is a director or because he does or omits to do anything as a director. n To declare any interest in proposed transactions or arrangements with the company – a director must declare the nature and extent of any interest (direct or indirect) in a proposed transaction or arrangement with the company (the director need not be a party to the transaction for this duty to apply). n To exercise reasonable care, skill and diligence – a director must exercise the care, skill and diligence which would be exercised by a reasonably diligent person both with the general knowledge, skill and experience that may be reasonably expected of a person carrying out the functions undertaken by the director in relation to the company.

Directors Duties

n All current directors should make it their business to ensure that they are aware of their duties under the Companies Act 2006 (see above). n On appointment, new directors should receive guidance on these duties. n A director should have a service agreement which should specifically refer to compliance with the duties. n Companies should review their internal policies in the light of the new duties e.g. HR, business sector compliance and corporate responsibility. n Decisions made at board level or at committee level should be supported by background information and thoroughly considered. n There should be written evidence of the reasons for decisions made. n Any minutes for meetings should be detailed and should clearly set out the evidence considered and produced. n For a company with a sole member who is also the sole director, written resolutions and evidence should still be produced. Any contract between the company and a sole director must be recorded in writing. n Management and project teams reporting to directors should prepare briefing notes and reports taking into consideration the duties which the directors are required to consider. This is a summary of a longer article first published in Flat Living, issue 7

a court. The prescribed form for the Notice of Claim is set out in the Statutory Instrument (2010 No 825) and a form can be downloaded from the website at www.legislation.gov.uk. LEASE explains that it is the Notice of Claim which brings the exercise of the right to manage into being and sets the date for the RTM company to take over the management. In being able to set their own date, the members of the RTM company are in a position to plan ahead and to prepare for the transfer. While the legislation provides a minimum period of three months (four months in total from the service of the claim, in order to allow for the opportunity to serve a counternotice) this need not necessarily be taken as a maximum; it may be prudent in some circumstances to provide a longer period in order to engage a new managing agent and to put other arrangements in place to ensure that the transfer of the management function is as seamless as possible. The next step is for the landlord to serve a counter-notice, no later than the date specified by the RTM company in the Notice of Claim The counter-notice can do one of two things:

The Notice of Claim... brings the exercise of the right to manage into being either agree to the RTM or allege reasons why the RTM company is not entitled to proceed. If the landlord agrees, the management will pass to the RTM company on the date specified in the Notice of Claim. Where the landlord does not serve a counter-notice, then the acquisition date for the right will be the date specified in the notice. Where the landlord disputes the claim, the grounds for dispute are limited to three issues: n the building does not qualify; n the RTM company does not comply with the legislative requirements; or n the members of the RTM company do not represent half the flats in the building. The counter-notice must specify the reason for the alleged non-qualification and must state that: n the RTM company may apply to the Leasehold Valuation Tribunal for a determination of the issue; n the RTM company will not acquire the right unless the LVT determines in favour of the company or the landlord subsequently agrees. The RTM company must make an application to the LVT within two months of the date of the landlord’s counter-notice. If the application is not made within this time, the claim is considered withdrawn. There is no prescribed form for this but an application form, with explanatory notes, is available from the LVT. ● For a more detailed explanation of the RTM process and a list of leasehold specialists go to the LEASE website at: www.leasehold-advice.org. For a list of ALEP-approved specialists, go to www.alep.org.uk

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The RIGHTs and WRONGs of RTM Right to Manage is not always as straightforward as flat owners expect. Here, neil malOney asks the first and most basic question of all – is it right for your block?

One Of the mOst significant aspects of the Commonhold and Leasehold Reform Act which came into force in 2002 is the creation of the Right to Manage (RTM). This is the right for qualifying leaseholders to establish a company to take over from the landlord the management functions of their block as set out in their leases. This right is limited to premises which contain two or more “qualifying tenants” so excluding houses. It also presents difficulties with mixed tenure estates. Blocks of flats must either be “a self-contained building” (i.e. structurally detached) or “a self-contained part of a building”. The latter needs to show an “earth to sky” vertical division in order to qualify for RTM, which usually rules out buildings with substantial overhanging parts or underground car parks. So assuming your block does qualify and you wish to go ahead with RTM, what rights will you acquire? This is often a source of confusion and the recent case of Gala Unity Ltd v Ariadne Road RTM Co Ltd [2011] UKUT 425 (LC) clearly demonstrates where problems can arise. The case concerned two blocks and two coach houses which made up a single estate. All four buildings shared certain communal areas (the car park). The two blocks of flats each exercised RTM via one company but the issue was whether it now had responsibility for the common areas:n solely (i.e. it owed duties to the coach-houses and the blocks of flats) or n not at all (i.e. the common parts remained with the landlord) or n shared with the landlord (i.e. the landlord remained responsible for the common parts of the coach-houses while the company acquired responsibility for the blocks of flats)? In the event, the Upper Tribunal (UT) held that the third scenario was applicable (although this case is now going to appeal). This is not ideal and the problem was recognised when the UT expressed the hope that the parties would negotiate a sensible solution (although after a bad-tempered and contested claim are the parties likely to want to adopt such a gracious approach?). This situation could also create difficulties for both, for example where one arranges to clean on Mondays and the other on Tuesdays. The duplication of costs surely would be unreasonable and unrecoverable? Apart from issues like these, running an RTM Company also presents its own

Flat Living

Summer 2012

challenges. For example, it is unlikely that the leases will allow recovery of the RTM company’s running costs (secretarial fees, directors and officers insurance, etc) via the service charge, whereas most leases allow the landlord to do this. The LVT‘s view is that these costs would not usually be recoverable. If that is right, then RTMCo members need to know that they will be personally liable for these costs and the company needs to be sure that it has adequate alternative funds to meet its needs. It is important that this concept is understood and absolutely essential that members understand the difference between “company” and “service charge” funds. Problems arise when they see RTM as forming a “club” for the mutual benefit of the residents (and ignoring the contractual rights and responsibilities of the lease). Members often push through “improvements” such as gates, entry phones and so on, even though the lease does not provide for recovery of these costs. Initial funding is required from the RTMCo members, as are future running and maintenance costs which are not recoverable.

Exercising RTM will not necessarily give them access to monies So what money does the landlord hand over to the new RTMCo? Leaseholders need to appreciate that exercising RTM will not necessarily give them access to monies they think the landlord should be holding. Yes, he is obliged to hand over whatever monies are currently held in the bank account once existing commitments have been met, but this is not an obligation to hand over monies which should be there. It is not uncommon to find the company has no cash in hand to take over the management of the building and unless it takes over when a new service charge payment is due, it will find itself unable to raise funds through the lease provisions. Even with these potential difficulties, RTM remains a valuable right allowing dissatisfied leaseholders greater control over the buildings that contain their homes. But it must not be seen as a panacea to solve all

RTM usually rules out buildings with underground car parks

ills. It is one of a range of remedies. Before exercising their right to manage, leaseholders should first consider the landlord’s rights and obligations under the lease as the company will take these on. Otherwise difficulties will arise! For example the company might have to fund expenditure for a considerable time if advanced collection of service charges is not covenanted.

WHaT’s THe alTeRNaTIve?

If RTM is chosen in favour of other options that could equally be used to resolve disputes or offer better service and cost effectiveness in the future, lessees might suffer accordingly. It is wise to review all the available options with appropriately qualified professionals before exercising RTM. Alternatives include: n Appointment of a manager/receiver – a “fault” based right under Section 24 of the Landlord & Tenant Act 1987; this can have very significant benefits through enfranchisement of the property after two years. n Seek an “Order of Specific Performance” for breach of contract (after all, that’s what a lease is) when the landlord’s obligations are not being performed. This is an equitable remedy that grants the lessee what he actually bargained for, rather than awarding damages for not receiving the service. n “Variation” of leases (by negotiation) to provide a Resident’s Management Company “head-lease” – this puts the residents in a management role. n Challenge the reasonableness of the service charge - most appropriate when this is the only issue of concern – under Section 19 and 27a of the Landlord & Tenant Act 1985. n Ensure that full consultation is undertaken for works exceeding statutory financial limits and for long term contracts – see Section 20 of the Landlord & Tenant Act 1985 – respond positively to the Landlord’s notices and use professional assistance to do so, where necessary. If you need help or advice on any of these issues, take professional advice from a chartered surveyor or solicitor specialising in the leasehold sector. ● neil l maloney FRICS FIRPM MEWI is a director of My Home Surveyor tel 020 7183 9020 email neil@myhomesurveyor.co.uk

RIGHT TO MANAGE

whAt Are your rights And responsibilities?

If you are thinking about taking on responsibility for managing your block, first you need to know what’s involved. nicholAs kissen explains if you hAve recently established a Right to Manage (RTM) company, the chances are that you have taken over the running of your landlord’s building from a manager who fell short of the ideal. However, replacing the former manager may not mean the end of your problems. Unless you proceed with caution – and understand the rights and responsibilities that you have taken on - it could be the start of a whole set of new challenges. Taking over the management of a building, whether it is a purpose-built block or a converted house carries with it a number of responsibilities. Right to manage is exactly that – you have the right to manage the block you live in – but whether or not you decide to exercise that right is entirely up to you. Some RTM companies choose to self-manage and others appoint an external manager. However, even if day-to-day responsibility is out-sourced to a professional firm of managing agents, the buck stops with the RMC or RTM company. The responsibilities which are likely to be imposed are the obligation to maintain and repair the building, provide services and generally keep it in good condition. It is also important that any officers of an RMC or RTM company managing the building, should have a decent working knowledge of company law (see p54 for more on this). Over and above that, the menu of statutory rights given to leaseholders, for example challenging unreasonable service charges, and proper consultation over major works, must be addressed by the RMC or RTM company if they are to ensure a harmonious relationship between all flat owners.

Another issue that concerns anyone managing a building is health and safety. The ARMA Leasehold Advisory Note dealing with this subject (go to the ARMA website for more on this) emphasises: “Health and Safety should never be ignored or dismissed because it requires additional expenditure”. Periodic assessments for the presence of asbestos should be considered to comply with statutory regulations. The same goes for fire risk assessments. Electrical equipment should be safe and water systems tested. A professional can advise on the relevant legislation to follow and how to comply with it. Whether or not the cost of commissioning an assessment report and implementing any necessary works is recoverable from the flat owners through the service charge, will depend on the lease terms. Hopefully there will be a favourable provision in the lease such as allowing for the recovery of the costs of complying with parliamentary regulations. However, an inability to recover the costs from the flat owners is not an excuse to skimp on compliance with health and safety obligations and it may be necessary to consider a lease variation to insert a clause allowing the recovery of this expenditure. Other important aspects of building management include insurance, security and maintenance. ● nicolas kissen is an adviser with LEASE www.leasehold-advisoryservice.org

Proper consultation over major works must be addressed by the RMC or RTM company

Getting the most out of

rTM MArk chick looks at the

best way to approach what can be a confusing process

As with Any project, the key to success

where the Right to Manage is concerned is proper preparation. While exercising the ‘right to manage’ itself might sound straightforward, if you have a large number of people in your block it may not be quite as clear-cut as you think. Good communication is vital and you will need to have a clear way of keeping in touch with and informing those involved in the process. This could be by way of using a notice board in the communal hallway, or perhaps by establishing an email circulation list. (If you do this, don’t forget to get consent from everyone to disclose email addresses to everyone else, before you send a group email). You will also need a few ‘leaders’ to act as the channel for communication between you and your advisors.

Be prepared

The best way to get the RTM process off the ground is often to call a meeting. If possible set an agenda beforehand and time limit the meeting. Do not let any one person hog the limelight or the agenda. If there are further questions then these can be dealt with by way of written answers, perhaps circulated by email. You will need to decide who the directors of the RTM company will be. They will need to be available to give direction to the managing agent when required. If there are insufficient interested parties to run the company on day one, then you really do need to consider whether you should be doing this at all, as a poorly managed building and could damage the value of your property.

delivery

The next important thing to do is to select your managing agent. The whole point of taking over the management of the block is to take the decision making power into your own hands. You may need to have a ‘beauty parade’ of the possible managers and the leaders of the process will probably need to meet

Summer 2012

Flat Living

Whatever the new management has planned for the building needs communicating... with them to make sure that they feel happy recommending them to the remainder of the group (see pages 47-51 for more on appointing an agent). Once a manager has been selected (or you have taken the decision to self-manage) you need to consider other matters such as long term contracts (such as lift maintenance) that the current manager has established and which will need to be dealt with as part of the process. As part of understanding the process you will need to get a good handle on your current service charge budget, so that you can understand what the impact of any changes might be, once the management is transferred. Remember, the service charge might not necessarily go down, particularly if the quality of the services improves. Don’t forget that the RTM Company can also serve ‘information notices’ requesting information from the landlord about the current maintenance and other contracts. Once the notice claiming the RTM is served,

the best run blocks are those where there is dialogue between the managers and the residents you need to ensure that the advisors encourage the managing agents to talk to each other in the run up to the handover. You should not assume that all of the contractors who receive notification from the landlord after the determination date will want to renew their services with the RTM company. Often, in a case where there are a large number of contracts to deal with it may make sense to pick a slightly more distant ‘acquisition date’ (the date on which the management functions

will hand over) than the minimum three months after the determination date.

Maintaining ContaCt

Once you have taken over the management of your block, whatever the new management has planned for the building needs to be communicated and this may mean holding another meeting. Regular updates to the flat owners will help with this. The best run blocks are those where there is regular dialogue between the managers and the residents. They also tend to be those where if the RTM Company calls an annual meeting there is not an enormous turn out. This is because if the block is well run, the majority of people will be happy, and also silent! ● Mark Chick is a solicitor and head of the landlord and tenant team at Bishop & Sewell LLP. He is also a committee member and director of ALEP (The Association of Leasehold Enfranchisement Practitioners). Tel 0207 631 4141 Website www.bishopandsewell.co.uk

Your questions answered

The subject of Right to Manage always throws up some interesting queries from flat owners. Here are some of the most frequently asked questions, together with answers provided by the Leasehold Advisory Service. If we exercise the right to manage (RTM), do we have to manage the building ourselves? The RTM company does not have to carry out the actual management itself. You can appoint a managing agent to manage the building on your behalf. We have taken over the right to manage (RTM), but the landlord insists that they continue to insure the building. Is this correct? No. Your RTM company has taken over the management functions

Flat Living

Summer 2012

of the landlord (and any management company that might have been in place). The management functions include the insurance of the building. However the Commonhold and Leasehold Reform Act 2002 specifically provides that the landlord is entitled to arrange additional insurance at their own expense.You are likely to require the services of a solicitor and a managing agent. See the list of Leasehold Practitioners on the LEASE website (see below).

Is the landlord entitled to join the right to manage (RTM) company? Yes, the landlord is entitled to become a member of the RTM company from the acquisition date. How can I resolve a dispute concerning Right to Manage (RTM)? The Leasehold Valuation Tribunal (LVT) has the power to resolve various disputes relating to RTM including; n That on the relevant date the RTM Company

was entitled to acquire RTM n Any question in relation to the amount of the landlords costs payable by the RTM Company n A determination of the amount of service charges to be paid over to the RTM Company. n Application for a determination regarding grant of an approval under a lease. Is the right to manage (RTM) company bound to carry on with existing contracts entered into by the landlord?

It is considered that the RTM process may well frustrate existing contracts, that is to say, the takeover of management responsibilities by the RTM company will bring to an automatic end all existing contracts. The RTM company can then choose whether or not to continue with the contracts. ● For more FAQs and a list of qualified leasehold specialists who will be able to offer you more detailed advice, go to the website at www.leaseadvice.org

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End notes Flat Living

Company news Appointments Crossword answers Competition

A l l t he r i gh t m o v e S

61 61 61 62

ComPanY news

Whether you are a managing agent, a solicitor, a valuer or supply services to the leasehold sector, we want to hear from you appoiNTmENT

appoiNTmENT

Property agent Aston Rose has announced the appointment of Simon Bakewell as chairman of the company. A co-founder of Nelson Bakewell, Simon brings with him a wealth of experience and knowledge of the property market together with extensive operating expertise. These attributes will help the board of Aston Rose define a clear strategy for continued client focus and growth over the next few years.

BSkyB has appointed Brendan Hegarty as its new head of Sky Communal TV Solutions. The department is responsible for the installation of digital communal TV systems into blocks of flats and apartments and is one of the highest growth areas of the business. Brendan Hegarty previously worked in the mobile phone industry, most recently as a senior member of the sales and retail teams at Orange. He says: “My 10 years in telecoms have definitely been great preparation. The mobile sector and Sky both share subscription based business

new Chairman for aston rose

new Communal tV head

models, with similar challenges and targets. BSkyB is a fantastic company that I have followed closely for many years, and I’m delighted to be involved at this exciting time.” One of Brendan’s main priorities across the private and social sectors, is to help property professionals liaise with residents at every level. He says: “We believe it’s important to speak to residents at the outset, consult with them directly to identify what their needs are, explain the options available and keep them informed of progress throughout the installation process. “

If you have moved jobs contact us at info@flatliving.co.uk

EVENTS PeoPle Power in Communities 8 september 2012 university of london This event, organised by Residents Associations in the UK is being held from 10am - 5pm at the Logan Hall of the University of London. There will be a range of guest speakers who will provide information and guidance, plus taster workshops. There are limited spaces available for this event. To book your seat or to sponsor this event, go to www.residentsassociations.co.uk. Chairs of RAs will be able to attend the event free of charge (including refreshments and lunch). Everyone else will be charged £15.00 to cover the cost of refreshments during the day, including lunch.

last issue’s Crossword answers

acroSS 1 Impedes inquiries. (6); 5 Left paper for baby sitter. (8); 9 Arraign a revolutionary redistributor of land (8); 10 Tricky tester for me. (6); 11 British float Green invention. (3-5,4); 13 Occassionally enthusing about ornamental case. (4); 14 Uncle is upset about a lot of silliness. (8); 17 Boundless energy for command. (4,4); 18 When wild, best they land on stoney ground (4); 20 Read about God...miracles, without church, are found at sea. (4,8); 23 A southern madam short of breath. (6); 24 Bakes pie for speech therapist at the; end of the film. (8); 25 Looking down on tin robbery from river. (8); 26 President Assad is malevolent in his; cruel philosophy. (6) DoWN 2 Sounds like an artificially happy greeting. (4) 3 Arranged marriage? (9) 4 Grouse about evil directions. (6) 5 Feisty yearling levered to post. (7,8) 6 Sailor slurs refrain. (8) 7 Courtsides! (5) 8 Me, men, stand around for corrections. (10) 12 Phones sent haywire by renowned Engineer. (10) 15 Blast what you can see! (9) 16 Tweeter’s address. (8) 19 Curtly thank team (Evening Standard) for cruises. (6) 21 Whitehouse refused to attend detox programme. (5) 22 Bust containers? (4)

Flat Living

Summer 2012

end notes

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DoWN 1 4,10’s gentleman rejuvenates hopscotch, missing a turn (6) 2 “Murder the Queen ‘e did” (6) 3 Ill fated, but not deceased, Greek bigwig. (4) 4/10 Breweries toot organised by 21’s favourite. (6,7) 5 Stands up, surrounded by sin, and takes office. (6,2) 6 Winning hand causes William to blush (5,5) 7 Quite costly small driving aid leads to mild exclamation (8) 8 Warm fire, usually American! (8) 14 His finger may have an unfamiliar ring about it (10) 16 See 27 17 Step inside Mowgli’s sad enclave (8) 18 Vigilant MASH surgeon has died (4-4) 22 Red wine, fermented without nitrogen, is wetter. (6) 23 Perfect place for indecent house parties without shears (6) 24 Cooked greenery, without doubt, gives vitality (6) 27/16 21 nobility heard praise for little Emma’s virtue (4,8)

1 Wombles. 2 First and latest winners of The Derby. 3 Old Etonian Prime Ministers. 4 Route 66.

Across 9 Look ill? (4,3) 10 See 4 Down 11 Brave boxer in front and on time (7) 12 Scholar deemed a catholic revolutionary (7) 13 Abolitionists address working girls (9) 15 Cooked by Old Sparkie (5) 16 Lingua franca languishes badly without American input (7) 19 Misbehaved, it is said, every year from 2000 to 2009 (7) 20 Fall off roof in Home Counties (5) 21 Writer, he wooed us amusingly with 1, 4 & 10 and 27 & 16 (9) 25 Keep left wing paper? No, right! (7) 26 Accept salutation (7) 28 Small European may become a vulgar Frenchman (7) 29 Making money by learning to do without Starter (7)

Summer 2012

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Flat Living Issue 11

Articles inside

Company news and appointments

Right to Manage

Appointing an agent

ARMA directory

ARMA surgery

interview

paul Robertson

letters

John Williams

insurance

Come outside

Escape to the country

We report on proposed changes to service charge accounting, the new energy code and the LEASE conference

Bob Smytherman

insurance

young designers

technology