We report on the recent High Court decision affecting Section 20 consultations, plus the ARMA conference and other topical issues

Flat Liv ingNews

w h a t ’ s h a pp en in g i n t he l e a se ho ld s ec to r

Calls for reform 9 ARMA Conference 10 ARMA-Q Award 11 Radon risk 13

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.

TribunaL service new property watchdog from may

FromMay2013theResidential PropertyTribunalService is expected to become part of a new firsttierPropertyChamber.Subject toparliamentary approval, on 1 May 2013,thisnew body will take overresponsibilityfor theLVTs, rentassessmentcommittees and residentialpropertytribunalsthat arecurrentlyadministeredby the ResidentialPropertyTribunal Service.TheChamberwillalsotake overthe functionsofthe Agricultural LandTribunals andthe Adjudicator ofthe Land Registry whichwillbe wound up on 1 May. Theregional structuresofthe RPTS will remain forthepresentalthoughitwillno longerhavea statutorybasis.The three bodies will become part of the new Chamber, andtheir headswill become PrincipalJudges, with the Chamberheaded by a newChamber President.All currentjudicial office holders (legal andnon-legalmembers) willtransfer across to become judges andmembers of theFirst-tier Tribunal. Serviceand administration chargesappealswillcontinuetobe madetothe UpperTribunal. The changesapply to Englandonlyand havenotbeenmadeinWales.

evenT freenetworking eVent forflatownerS

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

reguLaTion callS for reform are getting louder

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.

more than 550 delegates attended the 2012 conference

EvEnt ARMAcoMes of AgeAt sell-outconfeRence

The Association of Residential Managing Agents (ARMA) seventeenth annual conference was held in October at the Queen Elizabeth 11 conference Centre in London. Sold out in three weeks, the event was attended by more than 550 delegates including property managers, RMC Directors, solicitors and accountants.

A varied programme of presentations on the theme of Success in a consumer-focused future was followed by a champagne reception to celebrate ARMA’s twenty-first anniversary. Speakers included a number of well-known leasehold experts including lawyer Justin Bates, LEASE chief executive Tony Essien, chair of ARMA’s technical committee Martin Perry and past chairman Andrew McKeer. Topics ranged from technical issues such as the right to manage and Section 20 notices to the softer skills needed by property managers such as conflict management and customer communication via social networking.

During the conference ARMA chief executive Michelle Banks introduced the proposed framework for the new ARMA-Q self-regulation regime as well as unveiling the organisation’s new logo.

Other highlights of the conference included the welcome from new ARMA chairman Ben Jordon, the announcement of Keith Hill’s appointment as ARMA’s new Independent Regulator and the announcement of the winner of the 2012 ARMA-Q Award.

consultAtion public consultAtion on RegulAtion of MAnAging Agents

Members of the public are being given the opportunity to shape the way that managing agents are regulated. A public consultation has been launched by ARMA on a new self-regulatory regime for its members, known as ARMA-Q. This will set stringent standards of service for managing agents who are members of ARMA, with the aim of significantly improving the lives of people living in managed blocks of flats.

ARMA-Q will address issues around corporate conduct of managing agents, how service charge money is dealt with and transparency over insurance premiums and associated companies. It will also set out clearly what consumers can expect from their managing agent via a new Consumer Charter.

Significant changes are also proposed to the way that standards are enforced, with the appointment of an independent regulator and panel to oversee the new scheme. ARMA members will be scrutinised both by industry experts and by representatives of people living in managed blocks – a first for the sector and a welcome improvement in protection for leaseholders. The Rt Hon Keith Hill, former Minister for Housing & Planning, is the newly-appointed Independent Regulator for ARMA and will oversee the new scheme.

Views are being sought by ARMA on its new self-regulation arrangements not only from people living in managed blocks but from all those involved in the leasehold sector. This includes landlords, estate agents, surveyors, solicitors and accountants as well as property managers and flat owners. The deadline for responses was 31 January.

AppointmEnt Keith hill Appointed As ARMA’s independent RegulAtoR

The Rt Hon Keith Hill, Minister for Housing & Planning under Tony Blair and the former MP for Streatham, will lead a new selfregulatory regime for residential managing agents. It will be the first time that managing agents have been subject to independent regulation and marks a welcome improvement in protection for leaseholders.

Due to be introduced from May this year, ARMA-Q aims to set high standards of service among ARMA members. This includes commitment to a new Consumer Charter and Standards which are specific to the managing agent sector. Members will be required to follow the best practice and ethics set out in the Standards and will be scrutinised by an independent regulatory panel.

The announcement of Keith Hill’s appointment was welcomed by ARMA members at the 2012 Annual Conference where incoming Chairman, Ben Jordan said:

“Keith Hill brings a wealth of knowledge about housing and leasehold issues to this important new role. His commitment to improving standards in the sector together with his unquestionable skills and long-standing experience as a policy maker make him the ideal person for the job.”

Keith Hill is a long-standing advocate of tighter regulation in the sector and said he was “delighted” to be taking on his new role.

“It will be my job as the regulator to be an advocate for the responsible managing agent and a vocal opponent of wrongdoers. I want leaseholders and the public to know that this is an organisation where the majority of members are doing the right thing and that we are determined to crack down on those who bring the industry into disrepute,” he said.

Keith Hill: advocates tighter regulation

Victoria smith accepts the ArmA-Q Award for Base estates

AwArd Base estates scoops first arMa-Q award

North West property managers Base Estates were awarded the first ARMA-Q Award, which recognises best practice in residential property management, at ARMA’s 2012 annual conference.

The award recognises an ARMA member firm which has succeeded in improving the quality of life for people living in managed blocks of flats. The award was independently judged by a consumer-focused panel comprising representatives from the Federation of Private Residents Associates, Leasehold Life and Flat Living magazine.

The judging panel found that Base Estates demonstrated “a high degree of professionalism” in managing a block with serious crime problems and numerous health and safety concerns, as well as correcting many years of mismanagement. This included spending a substantial amount of time helping, educating and communicating with the leaseholders, who appear thrilled with the changes made and the plans prepared for the 18 months ahead.

Established in 2004 by brothers Chris and Simon Neill, Base Estates is a residential management company, which has over 3,000 properties in its portfolio.

Speaking about the award win, Chris Neil, managing director of Base Estates, commented: “Base Estates was born out of the frustration we experienced when dealing with block management companies. As experienced property owners and service charge payers ourselves, we have a genuine empathy with leaseholders. We have always been focused on providing our clients with an open and transparent service and this award is recognition that this approach works. We were absolutely thrilled to have been chosen to win this award, especially as it was the only award given out on the night.”

Runners-up in the awards were Essex-based PMS Leasehold Management and Amax Estates & Property Management in Gravesend. Both companies impressed the judges but ultimately Base Estates were considered to have made the biggest difference to the lives of the flat owners in the block they entered for the award.

HeAltH & sAfety fragile roofs – watch your step

The Health and Safety Executive estimates that seven people are killed each year after falling through a fragile roof or roof light. To help prevent these tragic accidents, HSE has published a new leaflet titled Fragile roofs – safe working practices aimed at building owners and occupiers, construction businesses and workers in the construction refurbishment and building maintenance sectors. The leaflet outlines which surfaces present a particular risk and what building owner or occupiers should do to reduce the risk of an accident occurring. It also explains what a safe system of work is and gives some examples. For more information, go to the HSE website at: www.hse.gov.uk

Appointment North west provides NatioNal chairMaN for arMa

Ben Jordan, Managing Director of Cheshire based property managers Premier Estates, has been appointed as the national chairman of the Association of Residential Managing Agents (ARMA).

Speaking to more than 550 delegates at ARMA’s annual conference in central London last autumn, Ben explained how he plans to bring his passion for raising standards of professionalism within the property management industry to his new role:

“I am very proud to have been asked to chair our national trade association. From our base in Macclesfield, Premier Estates manages approximately 16,000 flats throughout England and Wales. We pride ourselves on providing the very best standards of service to our customers by ensuring that their homes are managed and maintained to the highest possible standards. I am really excited that my appointment as chairman of ARMA will give me a national platform to drive up standards for all flat owners. I am honoured to be involved in such worthwhile work.”

Look out for an interview with Ben in a future issue of Flat Living.

new ArmA chairman Ben Jordan takes the stage

Maintenance Are you reAdy for winter?

Flooding hit many home owners hard at the end of last year, but with winter upon us the key threat now to UK homes is damage caused by freezing weather. New research commissioned by Sainsbury’s Bank reveals that four in 10 homeowners haven’t carried out any checks in preparation for this winter. In response, Sainsbury’s home insurance is urging homeowners to protect their property by carrying out as many basic maintenance checks as they can. In the last two years, Sainsbury’s estimates that 37% of homeowners have been affected by easily preventable problems that could have been avoided by simple maintenance tasks, such as having their boiler serviced or checking and bleeding radiators.

Repairs to your property can be costly. Sainsbury’s research reveals that in the last two years, weatherrelated incidents have cost British homeowners a collective £7.9 billion to repair. The most frequent problems including blocked guttering, leaking roofs and damaged boilers, with the average repair bill being £453.98.

The report also shows that one in 10 of us has suffered from a broken boiler, with the same percentage falling victim to blocked or overflowing gutters. Some 9% have had roof tiles damaged, with 8% suffering leaking roofs. Wind damage to property has affected 6% of Britons and 5% have had a leaking radiator. Frozen pipes have affected 4%, and 2% have had pipes burst in their home. In line with the conditions of most home insurance policies, Sainsbury’s recommends that homeowners should ensure they maintain good upkeep of their property all year round in order to minimise the risk of damage and avoiding the need to make a claim against their insurance.

David Barrett of Sainsbury’s Home Insurance comments, “It’s also worth checking if you have home emergency cover, which comes as standard on our Premier Cover Home Insurance, as this will help you find an approved tradesman in the event of a home emergency, like escaping water or if your heating or electricity fails.”

fire prevention don’t sound fAlse AlArm

Does your block have a fire alarm – and if so does it work properly? If it has a tendency to go off without warning, you and your fellow residents could find yourselves facing a bill from the fire service.

The London Fire Brigade has announced its intention to consult on plans to start charging building owners and managers of premises where fire fighters are called out to false alarms from their automatic systems ten times or more in a twelve month period. The Brigade is currently called out to more than 400 such buildings more than ten times each year. Under the new proposals, these incidents could cost building owners at least £290 for each fire engine that attends. As well as being time consuming for fire fighters, false alarms are also costly - in London, it is estimated that false alarms cost the Brigade around £37 million each year.

The proposal to charge for repeat false alarms will form part of the Brigade’s London Safety Plan, which sets out how it will work over the next three years. The plan is expected to be subject to public consultation in January 2013.

The Brigade said it hopes the new charging scheme, if brought in, will encourage the proper use and management of automatic fire alarm systems to make sure those responsible for them have the right processes in place to reduce the number of false alarms. The Brigade also wants all building owners to introduce arrangements whereby the reason for the fire alarm sounding is investigated before calling 999.

new HoMes AwArd-winning ApArtmentsin londonw1

ridgeford properties and manhattan loft corporation have won the global Award for excellence at the 2012 urban land institute Awards held in denver, colorado for their fitzrovia Apartments development in london. the uli global Award for excellence rewards the highest standards of achievement that go beyond good design. many factors including leadership, contribution to the community and environmental protection are taken into account when selecting the winners. striking features at the 70-apartment development include a glazed reception area with double height ceilings opening onto a courtyard with stunning landscaped gardens, providing tranquillity for residents away from the busy london streets. four state-of-the-art penthouse apartments at the development came on to the market late last year.

HealtH & safety is your block At risk from rAdon?

The risks posed by Radon are being routinely ignored by British homeowners, despite more than 2,500 people dying each year as a result of the poisonous and carcinogenic gas, experts have warned. More people are killed by Radon than die on Britain’s roads, yet a report by leading environmental consultants DeltaSimons shows that awareness remains low. Maps showing Radon hotspots are inadequate, legislation falls short and advice from local authorities is out of date, says Delta-Simons Radon expert Jay Fox.

Radon is a naturally occurring, colourless, odourless, radioactive gas found at varying levels in all homes in the UK and across Europe. People living and working at basement level are particularly prone and those exposed to high readings are more likely to get lung cancer, especially if they are smokers as well. Well-insulated new homes can also cause problems because the dangerous gas has no way of escaping. The problem is unlikely to affect flat owners living above ground floor level. However, as Jay Fox points out “that puts an awful lot of people at risk”.Developers of new commercial and residential premises have an obligation to evaluate for Radon risk and this should be covered under planning requirements. “You can’t see it or smell it but that is no reason for assuming it isn’t there,” says Jay. “People need to get their buildings tested and that is a fairly simple procedure. Solving the problem is straightforward and relatively cheap.

For more information about Radon go to the HSE website at www.hse.gov.uk. Contact DeltaSimons on 0870 0400 012.