by Bruce Maunder Taylor

The ARMA Surgery

Bruce Maunder Taylor, a chartered surveyor and member of ARMA’s Council, provides answers to readers’ questions. If you have a question,

email it to info@flat-living.co.uk. (All names and addresses are withheld).

Question: I am the chairman of a resident management company (RMC). We have a long-running dispute with a leaseholder concerning the causes of damp in her flat. According to our surveyor the problem is caused by condensation but according to the leaseholder’s surveyor it is caused by penetrating damp. In your article on page 45 of the spring issue of the Flat Living magazine you say that “It is important to reliably tell the difference between condensation and penetrating dampness”. But if two members of the RICS cannot agree on this matter, it seems that there is no reliable way of telling the difference. Do you have any suggestions on how we might resolve this problem?

Answer: Whatever judgment a professional or expert makes, it is the reasons for the judgment that are important. If you take the example of a court case, judges do not accept expert testimony on the basis of “I am Mr Know It All – I’m Right”, they want the supporting evidence and reasons. When they have looked at that supporting evidence and reasons they will decide which of the experts they believe to be right.

My advice is to ask the RMC surveyor why he says it is condensation and to ask the leaseholder’s surveyor to say why he believes it to be penetrating dampness.

Penetrating dampness does not come from nowhere. If the surveyor blames rainfall, then he will be expected to have monitored the dampness in relation to rainfall patterns. If he blames a defective water pipe then he should be able to identify the location of the pipe and demonstrate the point of escape, exactly if the pipe is exposed, within a reasonable area if the pipe is encased.

If there is condensation then humidity levels can be measured (if it really comes to that) or a dehumidifier can be installed for a temporary period. If the dehumidifier dries out the dampness it is likely to be condensation. If there is penetrating dampness, then that penetration is likely to continue, despite the best efforts of the dehumidifier.

Two sensible surveyors who genuinely want to find the reason for the dampness should not have difficulty in devising appropriate tests for the precise circumstances of the case in question to establish which one of their opinions is correct. Please bear in mind that it is quite possible for both of them to be correct and for the dampness to be caused by more than one source.

Any opinion from any advisor that is not supported by evidence and reasoning is of little or no help or value to anyone.

In the circumstances of your particular case it should not be difficult for each surveyor, having different opinions, to set out in a report their evidence and reasoning for coming to their conclusion that it is condensation, on the one hand, or penetrating dampness on the other hand.

If that does not resolve the issue between them, there should be no difficulty for two surveyors, both of whom want the problem to be resolved, to meet on site and agree what tests or observations should be made in order to establish evidence and reasons with which both of them can agree.

The possibility of more than one cause contributing to the dampness should not be overlooked: it is possible that both surveyors are at least half right! Q: I am a director of an RMC. Our block has not been well maintained for some years and, at our AGM, the lessees asked for a 10-year major works programme to assess reasonable reserve fund needs. We obtained a report from an experienced chartered surveyor and if we followed the advice we would bankrupt some of our lessees. It seems that the surveyor has followed a new-for-old policy. What are our obligations and what do we do?

A: Your lease probably requires you to “repair and maintain”. In interpreting that obligation, the Courts have long taken account of the age, character and location of the property: a modern luxury prime location block would be treated differently to an old building of basic quality in a modest value location. The instructions given to any surveyor asked to prepare a 10-year forecast should carefully set out the basis of the advice to be given or, yes, you may find that the report you receive will cause anxiety and merely shift the problem from unknown repairs to unknown financial resources of individual lessees.

The standard approach is what you have done: instruct a competent surveyor to inspect the whole building and its services, report to you and suggest a 10-year major works plan with costings based on current building prices. The surveyor should be instructed to be concerned only with major works and not ordinary repairs which will be paid for from the annual service charge payments, and to take account of the age, character and location of the building.

An alternative instruction, which is sometimes followed, is along the lines of: this is what we can afford to collect in the reserve fund each year, prepare a costed 10-year plan with that in mind.

Yet a third option is to instruct the surveyor to identify those major items which will require some work over the next 10 years and place them in order of priority with a cost indication. The intention will be for the lessees to then have a meeting and agree amongst themselves what will be fitted into a 10-year programme and when.

A 10-year programme should never be regarded as “writ in stone”. Bouts of extreme weather tend to speed up the rate of deterioration of some components; long periods of mild weather tend to slow it down. Circumstances can change: different lessees may be appointed to the board of directors with a different agenda either to raise repair standards or reduce repair costs.

Q: We are a small block of eight private flats, post-war bomb damage, in an otherwise 19th century square, designated a conservation area. Recently a gas leak was traced to an underground pipe in the road outside. The utility company said that the pipe-work both in the road and leading to the flats would have to be replaced, and that it was no longer their policy to replace pipes inside multiple occupancy buildings. We had no consultation on the possible sitting of such pipes. Internally the supply pipe that ran upwards through the kitchen of each flat was cut off, and the gas meters were relocated near the front wall. We now have vertical and horizontal pipe-work running across the façade.

We appreciate that the leak had to be made safe and the gas supply restored. But do gas companies really have the right to bypass planning consent, ignore aesthetic considerations, and possibly reduce the value of our property? Even to put us in the position where the Conservation Section of the local Planning Department may ask us to relocate the pipes at our expense? Can you suggest, please, any possible redress? Have there been any other instances of this?

A: There have been many occasions over the years when gas companies have refused to reconnect to internal gas pipes, insisted on the external location of gas meters and then individual pipe from each meter to each flat. Indeed, there are many blocks with other cables pipes and wires on the outside, often introduced when communal supplies have been replaced with individual supplies. It is a widespread problem.

Some blocks of flats accept external pipes and conduits and nothing further develops. Other blocks take great exception to this multiplicity of individual external surfaces (individual satellite dishes are possibly the most notorious) and great difficulties are created.

Most leases provide that the individual supply pipe or cable is part of the demise as it supplies only that individual flat. Few leases provide that the lessee (or anybody else working for the lessee) can unilaterally put the pipe on the outside of the building where it is technically trespassing. That is often the route by which managing agents or landlords oblige individual lessees to reroute external pipes, cables satellite dishes etc.

Your complaint is against the gas company, but you represent the directors of the RMC and not the individual lessee. It is each individual lessee who is in the contractual position of being able to take issue with the gas company, and the RMC is in the contractual position of being able to take action against the individual lessee. As no steps were taken at the time to stop them whilst the workmen were on site, you now have a situation of acceptance or rectification. It is probably unlikely that the gas company will willingly rectify what they have done. Situations like this often come down to managing peoples expectations: if you expect rectification, you are likely to have to engage in time effort and expense in pursuing remedial works or, arranging for the lessee to remedy the matter, quantify the cost, and attempt recovery action. A lawyer will tell you that neither party has a cast iron case (nobody has a cast iron case at law) and an assessment will have to be made of your chances of winning and the costs (both money and emotional) of fighting. A gambler will tell you that you have better odds in a bookmaker’s office where it is certain that you will not loose more than your stake before the race is run!

Q: The section on your website on “Trees” is extremely interesting, whereby you state that it is the owner of The Trees who is responsible for the maintenance, inspection of the trees.

Try as I may, over a period of days, including reading your article, I cannot find any actual legislation which states the liability and responsibility of these owners, and I would appreciate any advice and information.

A: If you plant a tree on your land, or one grows on your land, it is your tree and is as much within your ownership as is your garden or the rest of your site.

If the tree grows beyond the boundary (either the roots under ground or the branches over ground) then there are a whole series of court cases that establish that those parts of the tree are trespassing on your neighbour’s property. If they cause damage then your neighbour (or other person who suffers damage) is likely to try and recover financial damages from the tree owner.

The many court decisions on that difficult point leave some uncertainty. For instance, when a court judgement finds that tree roots have caused subsidence damage to a neighbour’s building, before a court assesses whether damages are payable, it will often look to see if the neighbour served notice on the tree owner that the tree might cause damage, if the tree owner is someone (e.g. a surveyor/builder/architect) who ought to know that the tree might cause damage, or whether the tree owner does not have such specialised knowledge and genuinely had no idea that his tree might be causing trouble. These are all matters on which the court will need to make findings of fact, possible liability and, if there is found to be liability, damages.

It is for that reason that tree owners should periodically check their trees and maintain them appropriately according to their age, condition, proximity of buildings or other structures which may be damaged etc. Unusual problems include a tree that is growing on a boundary and it is difficult to tell whether the tree belongs to the owner on one side of the boundary or the other, or is on the party line and therefore something for which both owners have some responsibility. Problems sometimes arise when a neighbour decides to cut back overhanging branches (which he is entitled to do because they are trespassing) and returns those branches to the property of the tree owner. Problems sometimes arise because trees are allowed to grow to a height that cuts out light from a neighbour’s property, and sometimes a tree owner returns from holiday to find that his trees, on or near to his boundary, have mysteriously been cut down while he was away!

The reliability and responsibility for trees is largely a matter of common law and court case authorities rather than statutory law, but the general advice is please, do everything you can by agreement with your neighbour, and do everything you can to avoid litigation over trees.

“QLTA-Quite Likely To Annoy”

QLTA means qualifying long term agreements and is part of the regulations about consultation, known as S20 regulations. They are quite likely to annoy resident management companies, lessees and managing agents, writes John Mills, Technical Consultant ARMA.

s directors of a self-managing rMC you may have

afound a good gardener at last. he is willing to give you a better price if you offer him a two-year contract. But that would be a QlTa and you should stop and consult all lessees with at least two official notices before you can go ahead. You do not want the hassle and the paperwork.

Or your RMC has held the AGM that everyone in the block attended. A unanimous vote was carried in favour of continuing with the current managing agent and you could get better terms if you agree to two years rather than a one-year extension. But that would be a QLTA and you should stop and consult all lessees with at least two official notices before you can go ahead. You would have the silly situation of having your current agent sending notices asking if any lessees want to nominate another agent, and your current agent being asked to work without a contract until the consultation period was over.

Your managing agent wants to tender a lift maintenance contract for all the blocks that it manages. If it offers a three-year contract it will get a better price and the benefit would be passed on to lessees. But that would be a QLTA and the agent should stop and consult all lessees across every block with at least two official notices before it could go ahead. Notices will have to be specific to each block because the landlord or RMC is different for each one. The agent decides that the extra administration is not worth the bother.

What is a QLta?

A QLTA is any contract or agreement relating to service charge matters entered into by a landlord for a period of more than 12 months. And consultation under what are called S20 procedures is required for QLTAs if the amount payable by any one lessee exceeds or would exceed more than £100 in any one year.

So a contract for two years for gardening for 10 flats, where every lessee pays an equal share of the service charge costs and each lessee pays £90 per year is a QLTA, but does not require consultation. But if the same contract is for a block of 10 flats where the penthouse pays 20% of the service charge requiring the penthouse to pay £180 per year and consultation is then required.

VAT must be added to any figures before deciding whether the consultation threshold has been reached.

What sorts of contracts could be QLTAs? • Managing agents’ contracts • Lifts • Door entry systems • Cleaning, window cleaning & gardening • Electricity for common areas

What contracts are not QLTAS?

Contracts of employment are specifically excluded by regulations.

What consultation is required for QLTAs? • A notice of intention with at least 30 days for lessees to make comments upon the proposed contract and to nominate possible contractors. • A notice of proposals including at least two estimates from contractors with at least 30 days for lessees to make observations upon them. • Unless the landlord chooses the lowest price for the contract, a notice of reasons to each lessee.

What if I ignore the consultation requirements?

You may get away with it but why take the chance. If any lessee challenges the contract then they have the right to refuse to pay no more than £100 per year towards that contract.

Can’t I get dispensation from tribunals?

LVTs can dispense with the whole or part of them S20 consultation procedures and dispensation can be given before or after the event. There is no prescribed dispensation procedure or set of letters or notices to follow.

LVTs can dispense with the whole or a part of the S20 procedures so if you can comply with part of them you should always do so. The LVT may not give dispensation of the whole if you could have followed parts of the consultation procedures.

The following have been found not to be good reasons to give dispensation:

• An honest mistake • Compliance with the spirit of s20 • The landlord was an RMC that took the decision to go ahead • The lowest quote was chosen

Surely the consultation requirements do not apply to RMCs?

Just because an RMC has decided to enter into a long-term agreement does not excuse it from the legal requirement for S20 procedures. Even if a majority or all the lessees in a block vote to go ahead does not mean that S20 can be forgotten about. A disgruntled lessee after the event can refuse to pay more than the threshold figure of £100 per year. If the chosen contractor makes a mess of things then lessees may refuse to pay.

Managing agents should always advise RMCs that they must follow S20 procedures for QLTAs in full. Failure to do so may mean they cannot recover the expenditure incurred and the directors may be open to claims for negligence.

What about contracts we inherited on new developments?

We have just taken over the management company on a new development and the developer has locked us into a 15-year contract for an entry phone system and a five-year contract with managing agents we would like to get rid of. There are special rules for QLTAs for new developments. A contract entered into for a period of less than five years that was entered into at a point when there were no lessees at all in the block is not a QLTA. So a developer may for good reasons need to get things arranged before selling any flats, but the contracts should be for no more than five years. If the contracts are for more than 5 years then they are not illegal but lessees can refuse to pay more than £100 per year towards the costs.

At a time when the government does not think it important enough to introduce regulations to protect service charge monies, QLTAs are an example of regulations that produce mostly bad outcomes for lessees.