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Calls for reform 9 ARMA Conference 10 ARMA-Q Award 11 Radon risk 13
w h at ’s h a p p e nin g in t he l e a s e h o l d s ec t o r
LegaL
Section 20 deciSion ‘unworkable’ The High Court judgement in the recent Phillips & Goddard v Francis case has created huge uncertainty among property managers. The decision in this case has overturned accepted legal views on how landlords and their agents should comply with S20 consultation. The judgement seems to suggest that the costs of all qualifying works to a building must be added together and, in any year, if the total costs of those works are to exceed £250 for any one leaseholder, then S20 consultation must be carried out. If not, the landlord will be limited as to the amount he can recover from the leaseholders. According to the Association of Residential Managing Agents
(ARMA) the decision is likely to have adverse consequences for everyone in the sector. “It is difficult to see any workable solution that agents and their landlord clients can follow arising from this decision. The approach suggested ...of looking at all works in any financial year and applying the S20 threshold to that total, leads to severe practical difficulties as well as extra expense for managing agents which would be passed on to leaseholders in service charges.” Property manager Bernie Wales also believes the decision is unworkable. “If the ‘repairs and maintenance’ section, for example, of our budgets results in any one leaseholder paying £250 or more …
then in theory we have a problem,” he says. “For some blocks we can minimise such repairs for the next year, to reduce expenditure to below £250, while we allow the situation to clarify (hopefully). But for some smaller blocks … I’m thinking in particular of a house split into two flats … we would virtually have to stop repairing altogether – and thus be in breach of the terms of lease, thereby shooting ourselves in the foot”. Bernie believes the answer is to be cautious and weigh up each block’s circumstances honestly and openly with the client and leaseholders. “If managers are seen to be consulting informally about what is right to do, this should avoid legal action – but
if legal action commences, at least we’ll be able to hold our heads up and honestly say we’ve done what seemed best in the circumstances – and we were telling everyone what we were doing,” he says. ARMA has met officials at the Department of Communities and Local Government (DCLG) and a legal advisor from the Leasehold Advisory Service (LEASE) and underlined with them that the implications of this judgement are potentially serious and far-reaching. “At this stage the priority is to understand the full implications of the judgement and we will work with these organisations and legal commentators to achieve that,” said a spokesman.
reguLaTion
TribunaL service
new property watchdog from may
callS for reform are getting louder
From May 2013 the Residential Property Tribunal Service is expected to become part of a new first tier Property Chamber. Subject to parliamentary approval, on 1 May 2013, this new body will take over responsibility for the LVTs, rent assessment committees and residential property tribunals that are currently administered by the Residential Property Tribunal Service. The Chamber will also take over the functions of the Agricultural Land Tribunals and the Adjudicator of the Land Registry which will be wound up on 1 May. The regional structures of the RPTS will remain for the present although it will no longer have a statutory basis. The three bodies will become part of the new Chamber, and their heads will become Principal Judges, with the Chamber headed by a new Chamber President. All current judicial office holders (legal and non-legal members) will transfer across to become judges and members of the First-tier Tribunal. Service and administration charges appeals will continue to be made to the Upper Tribunal. The changes apply to England only and have not been made in Wales.
A debate in the House of Lords earlier in January dealing with amendments to the Enterprise and Regulatory Reform (ERR) Bill provided the leasehold sector with the opportunity to lobby government for stronger regulation of the sector. The Federation of Private Residents Associations (FPRA) and Royal Institution of Chartered Surveyors (RICS) are both backing calls for reform tabled by Baroness Hayter. The RICS, with support from the FPRA, has put forward an amendment to the Bill calling for stronger regulation of letting agents. Baroness Gardner of Parkes used the debate to call for regulation of managing agents. The passage of the Bill through Parliament has provided a timely opportunity to strengthen calls for leasehold reform. Life Peeress Baroness Gardner, who regularly raises leasehold issues in the House of Lords, urged leaseholders at the FPRA AGM last autumn to make their MPs aware of their problems. Housing is an “intensely political issue” she told the 250 strong audience.
Flat Living
issue 13, winter
evenT
freenetworking eVentforflatownerS
churesidentsline are hosting a networking event on 7th march 2013 at malmaison in birmingham. the key topics will be the process of leasehold Valuation tribunals, what makes an rmc director nervous? and risk management. midlands based property managing agents, directors of residents’ management companies and developers specialising in blocks of flats are invited to attend. the event runs from 5:30pm to 9:30pm and is complimentary for those that request a space prior to 1st march. to attend simply contact nick cachia at churesidentsline by calling 0800 281235 or email events@churesidentsline.co.uk
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