ARMA surgery

ARMA

A SK T HE P RO FE S S IO N A L S

A RM A SURGERY

BRuCe MAuNdeR TAyLOR, a chartered surveyor and member of ARMA’s Council, provides answers to readers ’ questions

TAcklINg UNSUITAblE TENANTS

QUESTION I live in a mansion flat. Our block has 80 flats with ten separate entrance halls.We collectively own the freehold. A buy-to-let investor owns a few flats in one part of theblock, lets them to unsuitable tenants and our company has been suing him for breach of lease. Just before our case came to Court, he bought another flat so that he now owns 50% of the flats in one part of the block. He served a Notice underthe Leasehold Reform Act claiming to buy the freehold of that part of our block, told us we cannot continue with our case now that his Notice has been served, and when he’s bought out that part of our block he’ll be able to do as he likes. Our solicitor has checked everything, I mean absolutely everything, and tells us this investor is right and we cannot stop him. Is there anything we can do? ANSWER I am starting to receive a few letters on a similar theme to this. I have not seen any of the documents in this case, your solicitor has, and you have received specific legal advice. Let’s look at it in general. Some buy-to-let investors are a real pain: late payers, unsuitable sub-tenants, unauthorised alterations and so forth. They don’t live there, so as long as they receive their rent, they sometimes do not have the same level of care as you do. You do not like the bad effects of that so you decide to take action. You’re not really sure what action you can take, or what reaction you might provoke.

You ask for advice from a professional adviser who earns his living by charging fees: the more advice he gives you, the more fees he charges you. Your rights are investigated, you are advised what you can do and a slow-burning fire is ignited. The buy-to-let investor takes advice, he is told about his rights and what he can do. The fee-earning professional advisers encourage both parties to chuck plenty of combustible material on top of the fire, sparks fly and a small campfire becomes a rampant, out-of-control forest blaze. Someone has to pay to douse the flames and clear up the mess.

Sound familiar? Let’s set out some basic, commonsense techniques to put fire checks in your procedures. Lots of people living in one building will inevitably lead to confrontation of one sort or another at some time. It cannot be avoided. Every board of directors, and their managing agents (when employed), should have

Lots of people living in one building often leads to confrontation

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 almost 300 firms in membership, ARMA also campaigns for improvements in the legislation governing the leasehold sector. Find ARMA at www.arma.org.uk

Ifyou havea query, emailitto info@flat-living.co.uk All namesand addresses are withheld

a procedure (written or in their mind) for handling nuisances, neighbourly complaints, alleged breaches of lease, etc.

Always the first step is to confirm the facts. You cannot ever make good decisions if you have partial facts, wrong facts or only one person’s side of the story. Do not just check them with the people directly involved, check with neighbours, passers-by, etc. Step two is always to listen and talk to the people involved: be objective, impartial and fair. Those two steps will lead to many confrontations being resolved. When a problem grows to the point where you need outside advice, you want two things: advise us what to do, and advise us what advice would be given to your opponent if you were acting for him.

If you are told that your opponent has a hopeless case, perhaps you need to change your adviser. As a general rule, work on the assumption that if you try to harm the interests of a person with a valuable investment to protect, he is going to vigorously defend his investment and that might lead to a full-frontal attack against you. You may win, but recognise that it’s not possible to win every fight you take on and the person with the deepest pockets has a statistical habit of winning more often than he loses.

There is evidence emerging that, just as you and your fellow lessees collectively bought your freehold, so investors are acting collectively to manage their investments. When they come under attack from an RMCo for doing what they see as reasonable, they have three choices: (a) argue it out; (b) sell up; (c) acquire a majority and take control. If there is long-term development potential, the investors are more likely to start to acquire a majority in order to take control.

We are all familiar with lessees of a block falling into two factions: (i) proper management at reasonable cost; (ii) minimum management at minimum cost. Lessees of blocks of flats at war with themselves are unattractive to owner/ occupiers, so price levels in the market for flats in that block fall. Cheap flats attract buy-to-let investors. You ask me if there is anything you can do. My advice is to stop spending money on fee-earning professional advisers. Instead, spend the money on maintaining the block and its services thereby creating a community which is attractive to purchasers who care (whether they be owner/occupiers or buy-to-let investors).

Surgery 36 Guidance 38 Directory 40 Find an agent 42

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QUESTION I live in a flat below a large balcony belonging to thebelonging t penthouse flat above mine. For two years I’ve had leaks in several different places, bad enough to need buckets to collect the drips. My ceilings are damaged, my wife has anxiety whenever she switches on the lights in case they blow or give her an electric shock, and it seems no-one can solve the leaks. A year ago, the penthouse owner renewed the balcony surface and the waterproof membrane. The managing agents have had a specialist roof leak firm in, it still leaks. How do we get this sorted? ANSWER There is a tendency to assume the obvious (in this case the balcony flat roof), a failure to look for the not so obvious: defective parapet walls, pipes built into the concrete, water percolating from elsewhere, all sorts of other possibilities. If a specialist is instructed to report on a roof, that’s probably what he will do. Roofers will quote for a new roof, plumbers will quote to renew the water storage tanks, damp specialists will quote to damp proof the surrounding parapet walls, and someone is bound to say it is only condensation - I kid you not. It might be merely that the rainwater outlet occasionally gets blocked up!

So far as you are concerned, it is the landlord’s job to protect your flat from water penetration. For two years your landlord has failed.

You have a few choices: (a) serve Notice under the Pre-Action Protocol for Housing Disrepair Cases requiring them to erect a temporary roof until they’ve sorted it or face legal action; (b) start the process of asking the LVT to appoint a Manager, especially if this problem is typical of other bad management; (c) get a competent surveyor, agree access to the penthouse and all other roof areas so that you can get your own report, serve the report on the landlord and claim costs with damages as appropriate. Do not shout, scream, throw a tantrum, get involved in the blame game, or withhold service charges: it might make you think you’re doing something positive, you are not. The defect must be properly identified, and then it will be resolved.

It is the landlord’s job to protect your flat colating from elsewhere, all penetration. For two years your landlord has failed.

You have a few choices: (a) serve Notice under the Pre-Action Protocol for Housing Disrepair Cases requiring them to erect a temporary roof until they’ve sorted it or face legal action; (b) start the process of asking the LVT to appoint a

Battling Big Brother

QUESTION lessees. Our Board of Directors is dominated by one person. A few years ago she was really great at getting things done but, if one of the other Directors disagreed, it was her way or no way. It’s now her and two poodles, we only ever get the basic statutory consultation, we haven’t had an AGM for two years, and if anyone challenges her, the managing agent contacts the complainant for an appointment to inspect their flat to see if there is any disrepair, unauthorised alterations and who is living there. It’s now like living in a Big Brother society. What can we do? ANSWER It is very disappointing when a group of lessees find that the dialogue which ought to exist between Directors and lessees is so absent

QUESTION Our block is owned by the lessees. Our Board of Directors is dominated by one person. A few years ago she wa things done but, if one of the other If matters are so bad that even those sorts of tactics do not work, an application can be made for the appointment of a Manager by Order of the LVT for a short period, say two years, while the company sorts out its problems and reconstitutes its Boards of Directors, or, when a company has been struck off the Register and no longer exists, while the lessees get the company reconstituted or replaced. An LVT Order is a desperate, last resort process, but there are a few cases in which it has happened, and a few others where it has been threatened in order to break down an otherwise impenetrable dialogue barrier. ●

that they feel they have to provoke what ought to be an unnecessary LVT application or go on An LVT Order is a serv If ice charge strike. matters are so bad desperate last resort