Flat Living Issue 8

industriAl cHic get the look

Insurance

Spotlight on

rebuilding costs

cAn i extend my leAse?

service cHArges?

What do they really mean?

all you need to knoW

Planning ahead

T HE M AGAZINE FOR L EASEHOLD A DVICE

STUNNING! Life at

Highbury Square

is just pitch perfect

Win

£50

rs Vouche of M&S word r Cross u o r e t En ition compet e see pag

62

A utumn 2011

£2.50 I 8 ssue

flat-living.co.uk

Specialist residential block management servicing London and the South East

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

contents 7

maintenance schedule for your block could save you time and money says Julian Davies.

Welcome

New Editor Lesley Davis introduces your new-look Flat Living, with a bold, bright design and a fresh approach to leasehold life.

25

NEWS 8

We report on new fire safety guidance, a landmark ruling in the Court of Appeal and events for leaseholders.

lifEStylE 13

16

ADViCE 19

28

ProPErty Cracking down on subsidence

John Williams

30

letters

32

interview

Richard Ayton-Robinson explains what to look out for and how to lower your risks.

20

23

4

tEChNoloGy Are you ready for digital?

Don’t risk losing your TV reception warns Jason Weller.

Have your block surveyed now.

MAiNtENANCE A man with a plan Developing a planned

Bob Smytherman

In his first column for Flat Living, Bob explains how he got involved with the FPRA and points to the benefits of forming an active Residents Association.

29

Get the look

Interior designer Emma Smith describes how to find the right furniture, lighting and accessories to give your flat just the right balance of vintage industrial chic.

10

oPiNioN

Back on home turf

Every football fan imagines living close to their club’s home ground and at Highbury Square in North London, architect Allies and Morrison has made that dream a reality.

iNSurANCE rebuilding costs – what do they really mean?

Belinda Thorpe tackles the issue of index-linking and explains what your sum insured should cover.

Standing up for the professional managing agent and arguing the case for the added-value services they can provide to residents.

Setting up resident’s Trust Accounts; Deajan Investments Ltd v Benson; your right to insure; and a response from Peverel.

Lesley Davis talks to ALEP honorary secretary Alex Greenslade about the organisation and the way it works on behalf of members and leaseholders.

16

32

ArMA 35 36

ArMA Surgery

Bruce Maunder Taylor answers your leasehold questions.

ArMA Maps

Members advertise their services.

47

Autumn 2011

Flat Living

A UTUMN 2011

WIN

£50

rs Vouche rd of M&S rosswo C r u o r Ente ition compet e 62 See pag

13

42

ARMA Guidance

44

ARMA Directory

Tackling noise in your block, ARMA’s Lessee Advisory Note offers tips and advice for long-suffering residents.

ARMA member listings.

FEATURES 47

Why extend your lease?

53

Service charges in the spotlight

If you are a leaseholder, the chances are that at some point you will want to extend your lease. In this feature, we look at all the issues surrounding lease extensions, from valuation and working out the cost, to choosing the best adviser and getting the process right.

Always a contentious subject, all the problems thrown up by service charges are examined by our expert contributors.

We take a look at forward planning and sinking funds as well as resolving disputes, and following the RICS Service Charge Code.

We also provide answers to your most frequently asked questions.

EnD noTE 61 62

Company news and appointments

Find out who is doing what and with whom.

The Flat Living crossword and competition

Your chance to win £50 of Marks and Spencer’s vouchers

Flat Living

Autumn 2011

5

Professional property management services for residential blocks in central London.

To discuss your property management needs, or any of the services we offer, please contact: Wayne Savage - 020 7629 1533 waynesavage@astonrose.co.uk

integrity • passion • performance

A UTUMN 2011

Issue 8 flat-living.co.uk

Advertise And subscribe

For advertising enquiries call 0845 257 6374 or visit www.flat-living.co.uk lesley Davis Editor editor@flatliving.co.uk Warwick Smith Consultant Publisher warwick@flatliving.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

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

Autumn 2011

Welcome to the Autumn issue of Flat Living and my first as Editor.

This is our eighth issue and to celebrate two years of keeping readers up-to-date with the highs (and sometimes lows) of leasehold life, we have given Flat Living a makeover. The magazine now has a fresh, bright new look with a bold, easy-to-read design and new regular features. We are delighted with the positive feedback we receive from our readers and hope you continue to find the articles, news and comment entertaining, useful and informative.

This issue is packed full of fabulous flats and exciting interiors, with every Arsenal fan’s favourite development, Highbury Square, featured on our Lifestyle pages, plus major features on lease extensions and service charges. Our new Advice pages offer plenty of tips and expert guidance on property, maintenance and insurance issues in a new section starting on page 19.

Opinion on page 28 includes the first of a regular column from FPRA Chairman Bob Smytherman and Aston Rose’s John Williams gives us his take on professional block management. We also talk to ALEP’s Alex Greenslade about what his organisation is doing to help leaseholders get a better deal both from professional advisers and the Government and we publish your news and views in Letters on page 30.

ARMA now has its own pages, with all advice and information from the Association in one, easy-to-find section of the magazine, starting on page 35 of this issue.

Lease extensions and service charges are two aspects of leasehold life that crop up time and time again. So we have tackled both in this issue , giving readers plenty of information, links to useful websites and some tips for getting the best from the professionals. If there is one thing leaseholders should know about extending their lease, as ALEP’s Alex Greenslade points out on page 33, it is that it is never too soon to start thinking about it. On pages 47-51, we explain the process, identify the advisers you will need to help you extend your lease and we even do the maths, to work out how much extending your lease is likely to cost.

The thorny issue of service charges is in the spotlight on pages 53 – 58. The message for readers here is plan ahead – don’t be caught out by unexpected bills and if you do get into a dispute with your freeholder, the experts explain what to do next.

Finally, don’t forget to enter our crossword competition on page 62 – you could win £50 of Marks and Spencer’s vouchers.

We hope you enjoy this issue of Flat Living. We are always pleased to hear from readers so drop us a line or send us an email and let us know what you would like to see in your magazine. lesley Davis

Editor

7

News Flat Living

Fire safety 8 ARMA conference 10 Energy 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 New guidance aims to improve safety in purposebuilt blocks

New NatioNal fire safety guidaNce is published A new guide to fire safety in purpose built blocks of flats has now been published by The Local Government Group, aiming to bring consistency to fire risk assessments and help keep residents safe

N

ew guidance titled Fire Safety In Purpose Built Blocks of Flats is published by the Local Government Group and sponsored by the Communities Department and the Electrical Safety Council. It is intended to fulfil the need for a clear and consistent message to enable flat owners to comply with the relevant legislation and provide some definitive standards of fire safety.

By law, fire risk assessments must be carried out and a fire policy established in the communal areas of blocks of flats. The responsibility for these duties falls on the party with ultimate control of the management of the building: the freeholder, landlord, Residents Management Company or Right To Manage Company.

However, confusion often arises over what is required as part of a fire risk assessment, its precise scope and how frequently one should be carried out. This has led to widely varying outcomes, with excessive action being taken in some blocks of flats and in others none at all, potentially endangering lives.

ARMA has welcomed the publication of the first, and much needed, national

8

fire safety guide for purpose built blocks of flats. “The importance of this new guidance cannot be overestimated,” comments chairman Peter Dening.

“ARMA have pushed long and hard for some national guidance on fire safety in purpose-built blocks of flats and we hope this new document will finally provide specific and practical advice to those responsible for carrying out fire risk assessments. As an indication of the significance and demand for this guidance in the leasehold sector, ARMA recently devised a dedicated training courses in anticipation of its publication they sold out within days”.

Launched in July, the 192 page document covers guidance on a range of topics including ‘stay put’ policies, alarm systems, requirements of a fire risk assessment and the law relating to fire safety in these buildings. The document also includes relevant case studies that focus on some of the common issues found in blocks of flats with suggested fire safety solutions.

ARMA was part of an industry group established to help produce the guidance, which also included the Federation of Private Residents Associations along

with a variety of industry professionals.

FPRA Chairman and member of the reference group Bob Smytherman said: “Ever since The Regulatory Reform (Fire Safety) Order 2005 was approved by Parliament on 7th June 2005 and came in to law on 1st October 2006 those of us responsible for fire safety in blocks of flats have been calling for clear, comprehensive and unambiguous fire safety guidance and I am delighted that we have been able to inform the new guide.

“The previous advice covered most types of property, but it was never sufficient for common parts of blocks of flats and some landlords and residential management companies which are often run by volunteer directors were unsure of their legal responsibilities in such buildings. This was also compounded by fire risk assessors being unclear about the level of investigation required when carrying out risk assessments, which often led to confusion over the need for things like firefighting equipment, alarm systems and emergency lighting in the common ways.” ● The guide is free to download from www.arma.org.uk and from www.local.gov.uk/fire-safety-guidance

Autumn 2011

Flat Living

Time is running out

% 50 Save at least

on a Shared Dish solution from Sky Get the right digital solution for your block Whatever size your block or portfolio, we have a cost-effective digital solution to suit you, whether it’s our Shared Dish or Integrated Reception System (IRS).

And the great news is, with our Shared Dish, you could save a minimum of 50% on the total installation cost.

Simply make sure your free survey is complete by 30 November^ to claim this fantastic subsidy.

Shared Dish –

a single dish to support the entire block Minimum 50% subsidy on the total installation cost No need for individual minidishes We’ll remove any existing minidishes as part of the service

Integrated Reception System –

our platform-neutral solution

Flexible financial leasing options available Residents can choose their TV provider CCTV option for added building security

Here’s how we’ll get your flats ready Whichever solution you choose, we have a team of dedicated specialists that’ll provide expert advice and support throughout the installation process. They will: Assign a personal Account Manager to help you provide your portfolio details Arrange your free survey(s) within plenty of time to have them completed so you’ll qualify for our great offer Liaise with your residents’ management committee if necessary, and help with decision making Offer competitive subsidies – starting from 50%* of the total installation cost, only until 30 Novemberˆ

The sooner we get the go-ahead, the sooner your blocks will be ready We’re all set to make your blocks ready for Sky TV. But there are quite a few steps to go through, so the sooner we start, the quicker your residents can enjoy fantastic Sky TV entertainment. Simply register today so we can get the process underway. And don’t forget, we can provide the perfect solution for all your flats, no matter how many you have.

Don’t delay – go to sky.com/managers to register or call 08442 411 678

Hurry

offer ends 30 Novemberˆ

Believe in better ^A survey will take five working days between booking and completion dates. All surveys will need to be booked a minimum of five days before offer expiry date. *Shared Dish Subsidy: Only available on a Shared Dish system. This subsidy is based on a standard externally cabled system design and is inclusive of earth bonding. Sky will contribute towards the cost of materials. There could be other factors that could impact the cost of installation in your particular block, such as internal cabling costs. For certain blocks we will need a minimum of four residents to register before we go ahead with the install. 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 12.5p connection fee) for BT customers. Calls from other providers may vary. Information correct as at 15 August 2011.

News eVents

looking forward to the arma conference 2011

Flat Living will once again be attending the ARMA Conference on 5 October which sold out in record time this year. The conference is set to address some of the major issues affecting the leasehold sector and will focus on improving professionalism in property management. One of the speakers will be an RMC director who is going to be letting 500-plus property managers know what the service is like from his perspective and what he expects of managing agents! Other issues will include: n Updates on the latest legislation n Service charge accounting n Parking, clamping and towingaway n Understanding the ombudsman process and the LVT There will be a full report in the next issue.

LegaL

plasterwork is part of structure, court rules A recent case heard in the Court of Appeal means landlords may have to pay for internal repairs, says ARMA

An important decision has been made in the Court of Appeal in the case of Grand v Gill. The case revolved around the question of whether or not internal walls class as part of the structure of flats. The Court ruled that “plaster forming part of or applied to walls and ceilings is part of the structure of the relevant premises” and unanimously agreed that an obligation to repair “structure” (such as the obligation contained in section 11 of the Landlord & Tenant Act

Block and apartment managers join forces to offer rtm service Young Group and block managers

aDVICe

leasefunding agreeduntil 2013

For more information go to www.lease-advice.org

10

in the ownership and repairing responsibilities of the lessee, then the landlord cannot be held liable.

If the lease is not explicit and simply states that the landlord is responsible for structure and exterior then the responsibility for repairs could be his. And what if the damage to the plaster work was caused by an external leak from the structure? That would be classed as ‘consequential’ damage that the landlord should be responsible for.

agents

For more information and to download a conference brochure go to www.arma.org.uk

Good news for the Leasehold Advisory Service. Despite rumours it would be part of the bonfire of quangos, its funding has now been agreed until 2013. There have been fears that LEASE would fall victim to the coalition government’s clampdown on bodies that are funded by the government but not run by it. However, the service now appears to have saved – at least for the foreseeable future.

According to chief executive Anthony Essien, funding has been placed on a “firm basis” by the government for 2011 and 2012. After that LEASE will have to re-apply. However, Anthony remains optimistic that the advice service will continue to receive government backing “because we have a good case”.

He adds: “All we can do is try and assist [leaseholders]. It is up to government to make the right decisions”.

The Leasehold Advisory Service offers free advice on issues relating to leasehold property.

1985) included plasterwork. This decision is important to local authorities, social landlords and housing lawyers as well as leaseholders, because the issue of whether landlords are liable to repair damage to internal plasterwork has been unclear for a number of years.

So what does this mean for leaseholders? ARMA says that, despite the judgement in Grand v Gill, if the lease clearly puts the internal plaster on walls of flats

All we can do is try and assist [leaseholders].

It is up to government to make the right decisions

anthony essien Chief Executive Leasehold Advisory Service

Chainbow Limited have joined forces to offer a Right to Manage service to leaseholders, allowing them to appoint the managing agents of their choice. Both companies believe that RTM is an effective way to improve both the investment value of blocks and quality of life for residents.

Since 2009, the companies’ joint work has improved the quality of blocks including, most recently, MyBase in SE1. The four-year-old development, built

by Buxton Homes, comprises 155 apartments (102 private and 53 social housing), eight houses and seven commercial units. RTM was the only option available for changing managing agents and Young Group CEO, Neil Young, approached Chainbow to initiate the process after receiving feedback from tenants, clients and neighbouring owner occupiers that raised concerns over the maintenance and management of the development.

Neil Young, CEO of Young Group, pointed out; “MyBase was a newly built development but within a short period from completion, the fact that maintenance issues were not resolved as they occurred, meant that they became more significant – creating more damage and becoming costlier to repair.”

One MyBase landlord, Richard

RtM is welcomed at MyBase Houltby, commented on the process and stated, “I had heard about Right to Manage legislation previously, so when Young Group approached me to say there were concerns over the current block management and that they wanted to use RTM to make a change, I was pleased to see them continuing to take an active role in managing my property asset.

“Good block management is an added selling point for my investment – it’s great in terms of the marketing of the property.

No one wants to live in a poorly maintained property and good block management can give an apartment an edge over one in a rival development. I am sure it will provide a better long term return on my investment.”

The Young Group is now working on other RTMs with Chainbow.

Autumn 2011

Flat Living

INSURANCE

RIotClaImS RepoRtINglINeS

New luxury flats in Hackbridge AGENTS

HaCkbRIdge IS aRea to watCH SayS JJneighbourhood,” HomeS says JJ Homes JJ Homes have recently been

instructed as managing agents

by Taylor Wimpey to manage the Centrale mixed use development in Hackbridge. The large site, including residential and commercial buildings, was selected by Taylor Wimpey as an up and coming area close to the Croydon and Sutton borders with fast links into London but in green, tranquil surroundings.

“There is the usual mix of luxury flats, Housing Association homes and commercial property here, giving the development a welcome balance needed in the

Managing Director, Anthony Tokatly. “We are totally delighted with the appointment, the development is close by, enabling us to keep the strict pro-active management approach that we deliver as standard to all our new build properties”.

He goes on to say “Hackbridge is soon to become the area to watch in South London – there are many other large developments in the pipeline which will see this area redefined as a desirable alternative to its overdeveloped, pricier neighbours.”

AGENTS

New RICS qualIfICatIoN IN pRopeRty maNagemeNt Do you know what your managing agent’s credentials are? Now there is a new qualification to look out for: Associate RICS in Residential Property Management.

Anyone gaining this qualification will not only have at least four years experience as a managing agent but will also be subject to the same exacting ethical and professional standards as full corporate members of the Royal Institution of Chartered Surveyors.

Georgiana Hubbard, Associate Director, Residential at the RICS explains why the new designation has been introduced.

“It was felt that there were a lot

Flat Living

Autumn 2011

of very good property managers out there, who because they were specialising in a small area of professional practice, were not in a position to gain full chartered surveyor status but still could meet the high standards expected of RICS membership in their specialist field”.

She adds: “RICS is all about raising standards and with the increase in the amount of leasehold property now under management, the RICS considers it important for landlords and leaseholders that good managing agents are recognised as such”.

For more information on RICS-qualified managing agents, go to www.rics.org

Following the riots across the UK in August, insurers are doing all they can to deal swiftly with claims. If your block has been affected you should have been in touch with your insurance company as quickly as possible to ensure your claim is dealt with fast and efficiently. The local police authority also has a legal responsibility to reimburse anyone sustaining damage to property as a result of the riot under the Riot Damages Act 1886.

Don’t forget though that if you are claiming compensation for riot damage, you must be able to provide evidence of any loss.

For future reference, in the event of any similar disturbances, insurer Residentsline advises that if you have a policy with them, you should refer to the claims section of the website for relevant telephone numbers and notify your claim within 7 days of any incident occurring.

EVENTS

fpRa CelebRateS 40yeaRS This year, the Federation of Private Residents Associations (FPRA) is celebrating four decades of representing the interests of leaseholders and campaigning on their behalf.

The organisation offers its members impartial advice on a range of legal and other problems concerning their lease and the management of their blocks, whether their tenancy is Long Leasehold, Rent Act, or Assured Short-hold. The FPRA will be holding an anniversary event at the Victory Services Club in London on 9 November, which will include the annual AGM, plus invited speakers and a leaseholder surgery where experts will be on hand to offer help and advice.

Anyone who is interested in attending should contact the FPRA or go to the website at www.fpra.org to register online

ENERGY

lIttleHamptoN bloCk ReaCHeS New HeIgHtS IN INSulatIoN Residents at Kingmere, a 13-storey

high-rise block in Littlehampton can look forward to lower energy bills this winter thanks to the West Sussex Flats Insulation Project which has provided them with cavity wall insulation.

The two-year project, set up in 2009 by the West Sussex Partnership, was designed not only to offer practical help to residents wishing to insulate their homes but also to provide financial assistance for work that can prove prohibitively expensive for flat owners. Access issues, together with the fact that freeholders, short-hold rental tenants and managing agents as well as long leaseholders all have an interest in a building, often make it difficult to get the goahead for improvements.

At Kingmere, the high cost of access equipment to 13 storeys meant all the residents of the block needed to contribute to costs, despite grant funding for the project. Avalon Abseiling were chosen to carry out the work, which was completed at a total cost of £24,600 – around 60%

Abseiling saves money for residents cheaper than comparative quotes for using scaffolding. It took just over a year to get all 53 residents at Kingmere to agree to the insulation project but according to Jo Brooks, the energy efficiency officer with Arun District council who has been overseeing the project, ultimately not a single leaseholder protested to paying their contribution. Roy Scrivener the Kingmere freeholder, reports that he is delighted with the work. “Residents living in the most exposed top floor flat have already noticed the difference,” he says.

11

Lifestyle Flat Living

Highbury Square Industrial chic

13 15

At h o me w i t h l e A s e h o l d

HIGHBURY SQUARE

Back on

home TURF If you are an Arsenal fan, then a flat in Highbury Square has to be the home of your dreams

Flat Living

Autumn 2011

*

DESIGNED BY architect Allies and

Morrison, the 700-plus development of luxury apartments at north London’s Highbury Square is built within the walls of Arsenal FC’s famous former stadium in North London. The Capital’s newest garden square has deftly scored a hat trick of its own by providing prospective homeowners with three major selling points: a stunning living environment; high quality sustainable homes in the heart of the city; and the chance to live – literally – in a football stadium.

The former football ground is still clearly visible, despite the redevelopment, which took three years to complete. The architects have cleverly designed the apartments within the confines of the former stands. On the east and west sides of the old pitch the stands have been converted into flats, retaining original architectural features such as the beautiful art deco glazing at each end. New metal roofs match those on the original stands but now penthouse flats occupy the roof space. What was once the pitch has been turned into a series of gardens by Gold Medal-winning landscape designer Christopher Bradley-Hole, well

13

Lifestyle HIGHBURy sQUaRe known to visitors to Chelsea Flower Show.

Most notable of these is a Memorial Garden, where the ashes of more than 500 Arsenal supporters are buried. The scale and shape of Highbury Stadium has been lovingly retained and the end result is a perfect example of what can be done with care and expert design, to preserve our built heritage while creating something new and exciting. Londoners obviously agree because now fewer than 10 of the 728 flats remain unsold.

With a £700,000-plus price tag, apartments at the former home of Arsenal don’t come cheap but apart from the obvious attractions of the development, you do get plenty for your money. Located opposite Arsenal tube station, Highbury Square is well connected by the Piccadilly line to central London; only a 15 minute ride to Piccadilly Circus and 11 minutes to the City. And whether you live in an inward or outward facing apartment, the views are worth paying a premium for. Also included are: n Two acres of landscaped gardens on the site of the former Arsenal pitch n 24-hour concierge n Terraces or balconies to most apartments n Secure underground parking n Fitness centre with swimming pool (yet to be completed) The flats that are still to be sold range from £775,00 to £950,000 for the last remaining penthouse and are being sold with 254 year (less six days) leases. Ground rent is set at £400 a year and service charges are estimated at between £2000-3,500. The development has excellent environmental credentials and has one of the largest solar heating installations in Europe. A Combined Heat and Power (CHP) system at basement level provides the heating and hot water for the whole development and the electricity generated powers the external lighting and communal areas. So even if the flats are a little pricey, at least the bills won’t leave residents feeling sick as a parrot.

John Baldwin from Pembertons Property Management is the man with day to day responsibility for managing Highbury Square, and he describes the building as the “crown

The size and scale of the stadium has been retained

Highbury square is well connected by tube to central london jewel” of the properties he has managed over a 15-year career. All developments present their own challenges, and the modern high-specification design of Highbury Square certainly keeps John on his toes.

“It is a wonderful development,” says John “but with a design that does require us to keep on top of all maintenance issues. With a modern building this means managing a number of specialist firms who look after individual aspects of the development.

We use DMG Delta to maintain all the mechanical and electrical issues, Willerbys to look after the soft landscaping and Acescott for the windows. The windows have to be cleaned externally every three months, and it is a specialist job due to both the height of parts of the development, as well as the immense surface area that needs to be cleaned. The site includes some wonderful

water features, which were installed by OCMIS.” Dealing with the numerous contractors is just half the job for John, with the demands of the residents occupying the rest of his time.

“We get between 30 and 40 emails a day” he says, “which all need to be dealt with promptly.” John and his colleague, Louise Sterling, make sure that the residents are looked after by holding Bi-weekly surgeries, as well as using a monthly newsletter to keep leaseholders abreast of communal issues.

The inhabitants of Highbury Square are, primarily, younger professional people. But, as you would expect, there are also a number of Arsenal supporters who could not resist the opportunity to live in the iconic Highbury stadium.

“One gentleman, an Arsenal Season Ticket Holder, discovered that there was an apartment positioned exactly where he had had his seat, so he bought the flat,” says John.

That, in a nutshell, explains the unique appeal of Highbury Square. It may have gardens designed by Christopher Bradley Hole and spectacular architecture by Allies and Morrison, but that is insignificant compared to the unique location….what true Gooner could resist living in the historic home of the Arsenal? ●

Red letteR days Highbury. A name that has fired the imagination of football fans since 1913 when Arsenal FC – then known as Woolwich Arsenal – moved to its new stadium in Highbury, North London.

The scene of some of English football’s most exciting moments, Highbury stadium is one of the best-known buildings in north London and its iconic red-lettered frontage is familiar to fans the world over. Designed by renowned football

14

architect Archibald Leitch, the original stadium had a single covered stand and three open terraces.

In the 1930s new Art Deco east and west stands were built and a roof added to the North Bank terrace, which was bombed during World War Two and only rebuilt in the 1950s.

At its peak, Highbury Stadium had a 60,000-fan capacity but the tragedies at Heysel and Hilsborough in the early 1990s saw the advent of new regulations

and Highbury was converted to an all-seater stadium reducing capacity to just 38,419 spectators.

Surrounded by housing and with its East Stand Grade ll listed, expansion was out of the question and Arsenal FC had little choice but to look for a new home.

In 2006 the club moved to a new 60,000-plus ground at Ashburton Grove - the Emirates Stadium - and Highbury was turned over to the developers.

Highbury’s iconic facade Autumn 2011

Flat Living

Lifestyle INDUSTRIAL CHIC

Get the

look Creating an industrial interior is easy and fun says emmA smith

*

As the obsession with vintage continues, a more masculine industrial style has taken hold.

This look, often incorporating metal, wood and stone, looks great in both a traditional or more contemporary setting. It works fantastically well in an open plan loft space but can also be adapted for a smaller apartment.

Furniture A trestle table made

from wooden planks or stainless steel immediately gives you a central focus. If you then put this together with metal chairs in either galvanised steel or a bright primary colour you have created a look which is not only stylish and timeless, but also practical and hardwearing. The Model A Tolix chair originally designed in the 1930s by Xavier Pauchard, can be purchased for about £200. To get the look at a more affordable price, check out the Tolix-inspired chairs available from www.cultfurniture.com at half the price of the original. It is easy to get carried away with the industrial look and be too harsh with

16

the decor. You can soften your interior and bring in some comfort with a French style upholstered armchair in a contemporary Toile de Jouy. Have a look at Timorous Beasties for a fantastic collection of modern Toiles inspired by cityscapes and everyday activities.

Distressed painted furniture is another way of softening this look. The two styles of shabby chic and industrial work well together by complementing the vintage feel of both.

Both looks are great for those who are not too precious about their homes and prefer to have a practical and functional space without worrying about the odd paint chip or scratch.

Lighting

Ships lanterns or 1930s factory lighting are perfect for this look. Often in polished steel, painted enamel, glass or copper, you can easily find something to fit your space both in proportion or age. Genuine vintage lighting will often be a one-off, giving your look its own individuality. Take a look at www.skinflintdesign.co.uk for some truly wonderful vintage pieces. Iconic lighting such as angle poise desk lamps are now being

manufactured as huge standard lamps. This addition to your decor immediately brings an industrial feel to the space while being incredibly practical and functional.

Flooring

It really is important to consider the noise created by your choice of flooring when living in loft apartments or flats. Living underneath someone with wooden floors and a tendency to wear big heels is not fun and the continual clipclopping across a stone or ceramic floor can be torturous to the neighbours. With this in mind, steer away from flag stones, slate or exposed floor boards unless you are able to mask some of the noise with rugs and some carpeting in heavy traffic areas. If you can achieve some neighbourly sound proofing, natural flooring is the way to go with industrial chic. If the cost is prohibitive to your budget, there are some excellent laminate options available at a more cost effective price. Engineered oak is easy to lay and maintain at a fraction of the cost of oak floorboards.

Autumn 2011

Flat Living

Let your imagination loose and spend some time at reclaimation yards.

Decoration Leave stone or brick

work exposed, or paint with muted colours such as putty, stone or off white. Use an eggshell finish on wood work which is less reflective than traditional gloss finishes and can be rubbed back to give that vintage feel. Bright accessories or a 1950s style Smeg fridge in pale blue will liven up an industrialinspired kitchen. Stainless steel appliances in your kitchen are the perfect accompaniment.

A top tip to keep them finger print and smudge free is to apply a very thin layer of baby oil with a lint free cloth.

If space is really limited, it is worth considering a compact kitchen such as those supplied by Space Savers. Traditionally for use in office spaces, they can also be adapted for the home. The kitchen is concealed within a cupboard which can be painted to go with the scheme. By bringing the office feel to your home you have created a functional look which is completely in keeping with industrial chic.

Do not be afraid to add brighter fabrics or wallpapers in retro or more traditional

Flat Living

Autumn 2011

designs to keep your look current. There is now a trend for animal and bird designs which work fantastically well. Lewis & Wood (www.lewisandwood.co.uk) have a wonderful collection incorporating, birds, fish and horses.

These designs are influenced by traditional paintings and books but also work perfectly in a modern environment. The contrast between industry and nature softens industrial chic to make it work in any age of property from an Edwardian conversion to a city loft apartment.

Accessories This is where your

imagination and creativity can be let loose.

Using items not for their original purpose is the key to the industrial look. A US Mail Box as a bread bin, used tin cans for herbs pots, old army ammunition boxes for coffee tables and storage, municipal trolleys for storing your

vegetables or as book cases; the choices are endless. Oversized accessories such as huge wall clocks and lamps work well as do enamel signs and vintage posters (see www.duckthree. com for inspiration). Another way to complete this look is to use exterior accessories such as statues, sculptures or carvings in materials such as concrete, marble or wood as interior decorations. It is the incongruous items which make this look so appealing for both professional and amateur designers and it is almost impossible to get it wrong.

Getting this look right is easy and fun.

Spend time at reclamation yards – www. wellsreclamation.com is a brilliant website for ordering original and reproduction salvage items direct to your door. Visit your local auction for some inexpensive unique finds or you can even rummage through a few skips with permission of course! Once you have found some items you love, use a little imagination to restore and ‘up-cycle’ your finds. ● Emma Smith is an interior designer and can be contacted at Emma Smith Interiors Tel 01749 675644 www.emmasmithinteriors.com

17

Welcome to Earl Kendrick Associates, an experienced and approachable firm of Chartered Building Surveyors specializing in the residential block sector.

Whether you are a managing agent, a landlord, or a representative of a residents’ association or management company, you will face the same issues with the repair, maintenance and refurbishment of your block. This is where we can help and we can demonstrate excellent long-term relationships with many people in your position.

We fully understand where your priorities lie, and the best ways achieving solutions to suit all parties, even in the most delicate of situations.

At the heart of our philosophy is the belief that this is a relationship-driven business. Unlike many others in this field, we guarantee that you will be able to deal with the same senior, qualified member of our team throughout every stage of your project. Our experience suggests that this is the best way to get the job done perfectly every time.

We pride ourselves on our flexible approach and will try to attend evening and weekend meetings when required. We will also carry out inspections at times that suit the residents.

Typically, our services for this sector include: –

Major Projects (Design and Specification)

–

Defect Diagnosis (Building Pathology)

–

Leak Detection / Damp Diagnoses

–

Contract Administration

–

CDM Coordinator

–

Reinstatement Cost Assessments (RCA) for Insurance Purposes

Director: Julian Davies

–

Schedules of Condition

www.earlkendrick.co.uk

–

Dealing with Licenses on behalf of the Freeholder

julian@earlkendrick.com

–

Strategic Maintenance Plans/Advice

Tel 0207 284 1438

Please call us at any time to discuss your requirements in more detail.

4th Floor, Linton House, 39-51 Highgate Road, London NW5 1PB

earlkendrick

Advice Flat Living

Property technology maintenance insurance

19 20 23 25

AT h o ME In y o UR bl o C k

Low rise blocks are most at risk from subsidence

a stitch in time...

Identifying a potential problem at an early stage can avoid an expensive bill later. Here are some simple things that leaseholders or block managers can do to minimise the risk

n Jargto r e Bus The

ence subsId ing in or v l ca gradua an area of g in k sin to sink d n of la ; er or w to a lo al norm level.

PrOPertY

cracking down on subsidence Could subsidence be a problem for your block? rIchard ayton-robInson explains what to look out for and how to lower your risks

Insurers are speculatIng that we may see an increase in subsidence claims this autumn after one of the driest summers in years. A combination of hot weather and dry ground means that properties are more likely to suffer movement, especially where homes are built on soils that are susceptible to shrinkage.

All buildings suffer movement over the years as a result of bedding down, thermal and moisture changes within construction materials and ageing. This often results in cracks in the internal or external surfaces. It normally has no structural significance and can be dealt with by normal maintenance.

Some buildings are at greater risk of subsidence than others, but there are simple measures that you can take to minimise or avoid the risk.

Medium and high rise blocks present the lowest risk as their construction will incorporate a steel or concrete frame and the foundations are likely to be designed and engineered to suit the site conditions. Low rise blocks of up to five floors are more likely to be built of traditional methods and with traditional foundations. These buildings are at greatest risk from subsidence particularly in those parts of the country such as London and the South East where the subsoil is clay.

Flat Living

Autumn 2011

Complex geotechnical failures such as landslip, mining, and loss of support, due to excavations or retaining wall failures are thankfully rare. The most common cause of subsidence is trees growing too close to buildings in clay subsoils, or leaking drains.

Both these problems can be avoided by developing a maintenance programme which includes periodic inspection and cleaning of drains and tree management. Of course not all trees will be within the ownership of the freehold and gaining the cooperation of neighbours can be problematic. Many trees will also be protected by preservation orders.

However, managing the vegetation near the building and within the boundary of the block will reduce the risk considerably.

If you are in doubt as to the cause of damage, instruct a competent surveyor or structural engineer as soon as possible. If subsidence is suspected, let your insurer know straight away and they will investigate. ● richard ayton-robinson Product Development Director Cunningham Lindsey Cunningham Lindsey’s Specialist Subsidence Team can be contacted on 01473 716123 or e-mail sst-hub@cl-uk.com

n Inspect the outside of the building annually, paying particular attention to any cracks in the brickwork or rendering. Take photographs to provide a reference point if repairs are not deemed necessary at the time. Where the subsoil is known to be clay, the best time to do an inspection is during September. n Prepare a sketch of the principal trees and vegetation and note their height and distance from the building.

Use this as a reference point for vegetation management. n Make a visual inspection of the drains around the building by lifting manhole covers and ensure the drains are free running. Pay particular attention to gulleys and the base of soil stacks, where these are adjacent to the building, to ensure they are not cracked and leaking. n Encourage tenants to promptly notify the building manager or RMC of any new cracks in wall and ceiling surfaces. n Deal promptly with leaking overflows. n Where water supplies are metered, promptly investigate any abnormal consumption which might indicate an underground leak. n Where works such as replacement windows are planned, make a detailed inspection prior to the works to record any external cracks. Movement in brick lintels, following the works, may appear to be a subsidence problem. n Inspect following the replacement or laying of underground services near the building.

cunningham lindsey is a leading provider of claims management services to the insurance market. The company’s expertise is deployed 24 hours a day, 365 days a year across a wide range of disciplines, from risk management to the handling of subsidence claim portfolios, as well as technical loss adjusting.

19

Advice Technology March 2012 is the Digital deadline for homes in the South East

are you

ready for digiTal? Don’t risk losing your TV reception next year, warns JASoN WeLLeR. Have a survey done now

You get to the ‘doof, doof’ cliffhanger on

‘Eastenders’ and then the TV goes off – the switchover to digital has happened and your system doesn’t work! Can you imagine the phone calls you, as a property manager or RMC director, will start receiving – a lot more than the number of channels a fully working communal aerial system will receive that’s for sure!

The switchover of the transmitters in the south of England and home counties takes place on 12 March 2012, with London being left to last, from 4 April 2012 onwards.

As someone responsible for managing a block of flats, hopefully you will have already completed, or at least begun the process to ensure your property or the blocks you manage that have communal TV aerial systems are set up to receive digital TV. If your building is not yet prepared for the switchover, it is not too late, but you do need to get going. The decision making process required on multi-tenanted blocks can easily delay things simply due to the number of interested parties and their different requirements or expectations of a TV system and the need for a bit of juggling to ensure all the respective needs are met in the most costeffective and simplest way.

First you will need to have a survey undertaken on the existing system to ensure it can receive and distribute a digital TV signal.

The survey will involve checking the head-end distribution box and one of the flats in the block.

It will also check that the cables are earthbonded – important but often overlooked. If all is OK with the survey then a certificate will be issued confirming the system is compliant to the UK digital suggested parameters after 2012 switchover. The initial survey should typically cost between £150-£200+VAT per block.

20

Where a survey report shows the need for an upgrade or replacement this will require consent from all interested parties to a newly agreed communal aerial system, and then some organisation to get the installation completed. Access will be required to the head-end box and rope access for cabling and access to each individual flat will be needed. There will be several options available for upgrading an old system or installing a new one and undoubtedly tenants and leaseholders will have differing views as to the choice of digital TV options

The survey will involve checking the head-end distribution box and services they deem necessary. Bear this in mind, as well as the long term maintenance costs of any systems when obtaining quotations. Costs will vary from system to system depending on the property size, type, location, landlord agreement and the actual works required. You also need to check over any existing contracts for the aerial systems and their future maintenance.

For both the survey work and any further installation works, please always use a member of the Confederation of Aerial Industries (CAI) – the recognised body for the aerial and satellite industry (www.cai.org.uk).

Although a bit of a generalisation, any aerial system provided by a registered CAI installer within the last five years should be

absolutely fine and any building with a system dating prior to 1997 will definitely need to be upgraded.

Throughout the whole consultation process with the lessees, it is important they understand that while the aerial system may need to have some money spent on it, the digital switchover does not mean the occupants have to buy new television sets – an analogue set WILL continue to work as long as it is connected to a digital receiver and digital aerial system.

The importance of television should not be underestimated. It is still considered to be our most effective means of communication and, for some, it is their only lifeline to the outside world. ● Jason Weller Director, Aerial Systems tel 01248 653805 Website www.aerialsystems.co.uk

Established in 1969, Aerial Systems supply, install, connect and commission digital television, radio and satellite systems for both domestic and commercial clients across London and the South East. Aerial Systems also has considerable experience and expertise in the design and installation of commercial systems. The company is fully registered and a founder member of the Confederation of Aerial Industries (CAI).

Autumn 2011

Flat Living

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

service charge arrears? ground rent arrears?

Nationwide award winning legal recovery services for; self-managed RMCs managing agents freeholders developers

PROFESSIONAL

SERVICES FIRM OF THE YEAR

no recovery no fee

0845 1 700 700 slcsolicitors.com servicechargearrears.com groundrentarrears.com

easy to instruct

no upfront charges

free outsourcing subject to lease

MaintenanCe

a Man With a

What are the benefits? n Ongoing compliance with statutory obligations. n Greater control over expenditure and reduced risk of future cost. n Maintaining the underlying value of the property. n Maintaining the standard and presentation of the block. n Minimising the need for emergency and reactive maintenance. n Avoiding disputes, since all parties can contribute to the plan.

PLan

A planned maintenance programme could save you time and money says JuLian Davies The vagaries of The English weather together with day-to-day wear and tear mean that all buildings deteriorate over time. Changes to legislation and statutory requirements also affect the standards by which properties are judged. For leaseholders, it is vital that these changes are effectively managed and their block kept safe and sound, while avoiding major disruption and financial cost. If they are neglected, even the most beautiful buildings can - quite literally - fall apart, as demonstrated by the sad demise of Brighton’s West Pier.

The best way to avoid significant deterioration in the state of your building is to not wait to correct and repair serious faults, but to organise planned maintenance.

That doesn’t just mean keeping the property clean, but setting out a clear, long-term set of measures to keep it in prime condition.

Plan ahead

A Planned Maintenance Programme (PMP) should cover everything from structural checks to re-decorating and gutter clearing.

And although not dramatic, its effects can be hugely beneficial. Also, when there are a group of leaseholders collectively responsible for repairs, a comprehensive PMP can avoid disputes, which often require expensive resolutions.

The key to getting planned maintenance right is to develop a programme of maintenance work that is comprehensive, well-organised and affordable. A PMP is a vital tool to help managing agents or property owners set reliable levels of service charge expenditure or reserve funds for the cost of future repair and maintenance of a building.

Who can helP?

To put an effective PMP in place for your block, you should commission a professional – preferably a chartered building surveyor – to draw up a costed schedule of works for you that will identify any work that needs to be done urgently and pinpoint future maintenance issues.

Flat Living

Autumn 2011

Advice

Don’t wait to repair faults or you could face bigger bills further down the line The first step is for the surveyor to produce a detailed survey of your building so that any necessary work on the building can be prioritised and to ensure that any initial structural work is carried out at the same time to create economies of scale in terms of fixed costs like scaffolding.

What Will it cost?

Once this work has been carried out, the surveyor should be able to put in place a plan to demonstrate the best way to maintain the building in that condition, avoiding any spikes in expenditure. Depending on the size of the property, the detailed plan and cost schedule should only cost between £500-£2000. This is a small price to pay for the reassurance and issue-avoidance that it creates. Once this framework is in place, RMC directors will be able to monitor and update the PMP regularly and a review by a surveyor should only be necessary once every two or three years.

I recently visited a small block in very poor condition, with a backlog of maintenance spanning 20 years. Many significant defects could have been easily avoided by regular maintenance. When I explained the collective cost of all the work that would

now be required, the residents were shocked.

Particularly as there was no sinking fund to cover them.

My advice is to avoid that worry and unnecessary expense and invest in a PMP. Your property may not currently look or feel like the West Pier, but it’s worth ensuring that it stays that way! ● To download a sample of a PMP report and cost schedule, go to the flat Living website at www.flat-living.co.uk Julian Davies Director, Earl Kendrick Associates Tel 0207 284 1438 email julian@earlkendrick.com

earl Kendrick associates is a firm of chartered surveyors specialising in the residential block sector, with offices in London and the South West.

For more information go to www.earlkendrick.com

23

the flats insurance experts The Number 1 solution for Blocks of Flats Insurance Insure your buildings with us and get contents insurance for only £25 *Introductory offer to owner occupied flats that have been claim free for three years where 1st Sure insure the buildings for the block of flats. Offer can be claimed online.

Up to £55,000 of contents cover with new for old replacement (except clothing and linen) and accidental damage to home computer and entertainment equipment.

For full terms and conditions visit our website.

0845 370 2842

www.1stsure.com

email: info@1stsure info@1stsure.com com 5 Martinbridge Estate, Lincoln Road, Enfield EN1 1SP 1st Sure Ltd is an appointed representative of Midway Insurance Services Ltd who are authorised and regulated by the Financial Services Authority

INSURANCE

Advice The risks faced by RMCs continue to increase

rebuilding

COSTS– What do they

REALLY Mean?

Many insurance products for flats and apartments in the UK have evolved over the last twenty years, originally designed by insurers from commercial policies, says BelInda thorpe

n Jargtoer s Bu

Insurance protectIon has been enhanced over the years but the risks faced

by Residents’ Management Companies (RMCs) and their Property Managing Agents (PMAs) continue to increase due to environmental and governmental changes, changing weather conditions and a more litigious society. In the the first of two articles we aim to help you ensure that your insurance cover extends to the risks you and your RMC may face in 2011.

Why you should not rely on index linking to stay adequately insured…

Following a recent survey, we found that the majority of RMCs rely on index linking to ensure their building’s sum insured remained adequate. Some RMCs that we questioned had not had an insurance valuation for more than 10 years!

Premiums are not altered during the period of insurance, but are recalculated for the following year by applying the “current” insurance rate to the adjusted sum insured.

This appears suitable to safeguard your property until you look in to it a little deeper.

We approached four insurance companies who provided us with their index linking percentage for August 2011:

Flat Living

Autumn 2011

onthly g is a m latest In k In l e Index nt based on th lly e ua adjustm ge change us e ta percen produced by th dices in mation m o fr st Infor o C g in Build ice (BCIS), a Serv of the division tution sti Royal In rtered of Cha ors.

Survey aviva axa uk Zurich rsa

4% 4.5% 4%

so Why the variations?

7%

According to the insurers’ policy documents, the figures quoted are derived from “the general house building index from the Building Cost Information Service (BCIS)”, or “use of suitable or alternative indices” to cover inflation in rebuilding costs during the period of cover!

Joe Martin, Executive Director at BCIS, which has been the principal source of

rebuilding cost information and house rebuilding cost inflation statistics in the UK for the last 30 years, comments “there is no single index that is completely right for updating the rebuilding cost of a block of flats - each of the indices available have their advantages and limitations”. The use of different indices by insurance companies could quickly lead to quite extreme discrepancies in accuracy of your buildings sum insured.

Joe comments “This uncertainty could be overcome if, starting from a reliable reinstatement cost assessment, the sum insured is updated consistently from year to year. Even if the RMC were to choose a

25

Advice INSURANCE Does your sum insured reflect residents’ home improvements?

whAT ShOULD yOUR SUm INSURED INCLUDE? Apart from the obvious cost of rebuilding your property to its current condition and repair, it also needs to cover these points Architects, surveyors and other professional fees In the event of a complete loss, the services of architects, surveyors and other professionals will be required to ensure the rebuilt property complies with legislation and regulation.

Planning permission Although your property is currently “in situ,” did you know that if a complete loss occurred, planning approval would need to be sought to comply with latest planning legislation?

Building Regulations Should your building burn to the ground, not only would you require it to be built to the same specification, as existing, but it would also have to conform to current local and national Building Regulations.

Greener Homes Does your current insurance valuation include the latest requirements to comply with “Greener Homes” in terms of energy conservation? This is about reducing CO2 omissions and building energy performance in terms of solar gains, heating, ventilating, insulation and air tightness. After a complete loss you would be required to comply with current regulations.

Demolition and debris removal costs These also need to be included in the sum insured and costs can be substantial following a large claim.

suitable index, indexation should not be relied on for more than a few years. The RICS Guidance Note Reinstatement Cost Assessment and Insurance Claims states that “Surveyors may wish to consider that the Reinstatement Cost Assessment is undertaken from first principles every three years or at lesser periods dependent on the circumstances”.

The cosT of improvemenTs

One of CHU Residentsline’s main concerns is the problem of overlooking the value of lessees improvements, fixtures and fittings.

Most leases require the building sum insured to be equal to the full reinstatement cost and to include specific items such as kitchens, bathrooms, fitted furniture and the like contained within individual flats. The quality and cost of these fixtures may vary from flat to flat. With more flat owners choosing to improve rather than move, can you be sure that the value you have placed on your block is adequate, without viewing and valuing all your flat owners’ improvements?

Are you responsible for deciding the sum insured for your block when you may not have been inside many of the flats? Recently we were made aware of a claim for a flat owner who had suffered considerable fire damage in

26

a block that was only 5 years old. Following investigation it turned out that the flat owner had £50,000 worth of home networking, wiring and cabling installed for his IT, Hi-Fi, speakers and digital equipment which the RMC was unaware of.

A recent survey showed in excess of 77% of all the building valuations handled by Barrett

The use of different indices... could quickly lead to discrepancies Corp and Harrington Ltd (BCH), involving billions of pounds worth of property, were underinsured. This outlines the danger of not having reinstatement costs assessed, with regular updates by a company that specialises in this area.

Remember that insurers leave the responsibility to provide a “correct and current” rebuilding cost with the policyholder. ● Belinda Thorpe Commercial Director, CHUResidentsline

VAT The sum insured on blocks of flats doesn’t need to include VAT. on its rebuild cost. However it should allow for VAT. on the cost of demolition and fees. Did you know that if you suffered a major, but partial loss and insurers elected to repair rather than rebuild, that VAT would be applicable to the total repair cost? We would all agree that 20% is quite a chunk of your sum insured.

CHU Underwriting Agencies Pty Ltd (CHU) has been a market leading force for insurance products for flats and apartments over the last 30 years throughout Australia, the USA and in the United Arab Emirates. CHU, which is part of the QBE Insurance Group has recently acquired Residentsline to bring their innovative insurance solutions for the flats market to the UK

Autumn 2011

Flat Living

Management Problems?

Service charge and management disputes?

No effective procedures for collecting service charge arrears?

Rebel lessees and a failure to achieve a harmonious approach to managing the block?

Major works project under-funded and out of control?

Problems with sub-lettings?

Unauthorised alterations?

Unresolved and repetitive repair problems?

Accounting information out of date or just plain wrong?

Dodgy insurance claims and high premiums?

provide all the solutions 1320 High Road Whetstone London N20 9HP 020 8446 0011 Brosnan House 175 Darkes Lane Potters Bar EN6 1BW 01701 665 666

For over 30 years Maunder Taylor have solved all these problems any many, many more.

We are a company of qualified and skilled professionals, providing a first class service for our clients in Central, North or North-west London.

We are friendly, efficient and, most importantly, trusted.

Contact us at

www.maundertaylor.co.uk Chartered surveyors • Managing Agents • Estate Agents

Opinion Flat Living

w h At t he e x P e R t s t hink

Bob Smytherman introduces the FPRA and explains how the organisation works on behalf of leaseholders

I am the current Chairman and a voluntary committee member of the Federation of Private Residents Associations. The FPRA is the only national body representing long leaseholders and our members include residents associations, resident management companies, right to manage companies and other similar groups. Established in 1971 as a voluntary, nonpolitical, non- profit making organisation, this year the FPRA celebrates its 40th anniversary.

We operate as an organisation that aims to share knowledge and help our fellow leaseholders and we rarely come across any problem that is completely new. Among our experienced committee, someone has usually dealt with an issue before and has sought a solution to it.

My involvement with the FPRA began when I purchased a flat on a long lease in a very attractive block in Sussex that was poorly run by a managing agent. There was little or no maintenance and within a few months I had received an additional bill of over £2000 on top of the normal service charge to replace the flat roofs installed hurriedly by shoddy workman after the 1987 hurricane. Like

many leaseholders from whom we now receive queries, I could not understand why my solicitor had not made me aware of this when I was buying my flat.Our residents association directors then decided that we could do a better job than our managing agent and we decided to selfmanage. As we felt we needed some advice and support to help us with our new responsibilities, we joined the FPRA and within a few years I agreed to volunteer for the organisation in order to give something back in return for the help and support I had received.

Through my involvement with the FPRA and my own experience of living in a block of flats, I have gleaned a greater understanding not only of the legal and legislatory aspects of leasehold life but also of the way in which residents can work together to deal with all the myriad of issues that result from living in close proximity to other people.

Government proposals to ban wheel clamping are proving a sore point for many leaseholders

I have gleaned a greater understanding... of the way residents can work together

Don’t thInk the challenges ever

end, they just change. There is always something new to tackle whether you are seeking to take over management, work with your existing property managers,

purchase the freehold or have other objectives.

Over the next few issues of Flat Living, I will be looking at the many new issues facing leaseholders as the Coalition Government introduces a variety of new laws that will impact all of us living in blocks of flats. These include the Green Deal as government tries to insulate the housing stock; proposals to ban wheel-clamping which is major issue for blocks with limited parking spaces; and the roll out of new fire safety guidance for blocks of flats (see news, p7) after pressure from organisations like ourselves. ● 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

MAKING YOUR BLOCK A BETTER PLACE TO BE n If you haven’t already done so, form a Residents Association. We have a well respected booklet available that explains exactly how to go about it. n Communicate well with all leaseholders as well as all residents – the success

28

of dealing with almost everything you do in your block relies on good and repeated communication. n It is essential to have an active committee and make certain that you continue to get new people involved as flats

change hands so that you always have fresh ideas and fresh people rather than relying on just one or two. My own committee succeeds by having six directors sharing our responsibilities over a glass or two of wine every month.

n Join the FPRA for ongoing support membership includes access to a free easy-touse website for your block to enable you to store all your documents in one place with secure access for residents of your own block.

Autumn 2011

Flat Living

Bob Smytherman John Williams Letters Interview

28 29 30 32

John Williams

Even if you’ve had your fingers burnt, don’t dismiss the idea of using an agent NOBODY LIKES TO spend money unnecessarily, especially when times are tough and every penny counts. It is in such times that we look to downsize, cut out unnecessary expenditure and generally seek more cost-effective ways to achieve the same results.

However, in some areas this can prove to be a false economy and one of those areas is in paying for the services of a professional property manager.

For some, self-managing a property might seem an appealing way to try to reduce service charge costs. For others this route might appeal because they have had a bad experience in the past and simply do not want to jump from the frying pan into the fire with another managing agent. However, certain matters or complications can and do arise when managing residential blocks and without doubt the best way forward for an RTM company is to appoint a professional property management company. Of course I am going to say that, I work for one, but let me explain.

Not only does the managing agent deal with the day-to-day affairs but also potential ‘political’ problems within a building – something it is often better off dealing with one-step removed and without any emotional attachment.

A good managing agent does not only understand the way a building works, but will give advice on what is necessary to sustain and add to the investment value of the development. This will include general pro-active management whereby problems are dealt with before residents are even aware of them, such as dealing with security issues, ensuring parking arrangements are effective, being ‘ahead of the game’ (for example smooth transition with the digital switch-over) and planning preventative maintenance to keep on-going running costs at a minimum (reducing the risk of nasty surprises). Nor should residents underestimate the importance of having someone around who is up-to-date with

Flat Living

Autumn 2011

This summer’s riots have taught us that involvement engenders a sense of community

...certain complications can and do arise when managing residential blocks...

and understands the impact of government legislation and can disseminate the information in an efficient and easily understandable way so all residents derive maximum benefit. A good example of this is the ‘Green Deal’ introduced by the Coalition Government to save leaseholders money while helping the environment.

IN ADDITION to the ‘technical stuff’ outlined above, a managing agent should also help lead the way in sustaining healthy relations between leaseholders and, in some cases, even help build a sense of community spirit. Facilitating good two-way communication is vital and technological innovation has played a key part in bringing people together with some agents now investing heavily in custom-made websites, text messaging updates, live forums and smart phone apps, all aimed at bringing leaseholders together and keeping them in touch with what’s going on at their property.

Last, but probably one of the most important elements for an RTM company which cannot be overlooked, is understanding the impact of ever-changing legislation.

Recent reforms mean leaseholders who continue to self-manage must be fully aware of how the changes in law not only affect their building but, if not correctly managed, can have a significant effect on the RTM company from a legal point of view.

For example, being fully health and safety compliant, having proper fire safety provisions and complying with the latest Asbestos Regulations to name but a few. Failure to comply with these regulations or to instruct a suitably qualified assessor to regularly assess or review these requirements may not only lead to a hefty fine but it is not unheard of for prison sentences to be given to those responsible for the upkeep of a building.

Doing all of the above is nothing new; it is what any good professional managing agent should do. Why can we do it better than anyone else? Well, we are experts in property matters, we undertake training, adhere to codes of practice and have to maintain high professional standards. So, use a managing agent, do your homework (ensure they have professional qualifications), tender the work, obtain references and select a company with whom you feel most comfortable working. We can help reduce costs and we do add value.

Managing property well doesn’t just mean keeping it in a good state of repair and adding monetary value, it means improving the living environment too. Now I am not saying that a managing agent can change the world but, if the events of the last few weeks have taught us anything it is that a sense of belonging, care and involvement engenders a sense of community and if that happens in one building, in one area . . . ● JOHN WILLIAMS

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

29

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

Account advice needed

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

Peverel resPonds

I am a recipient of your magazine Flat Living. I manage two flats in a property that has been split into four flats. All the flats are interested in opening a bank account into which the four separate flats may pay in a monthly amount and from which two nominated people may draw/sign cheques. We are having difficulty in finding a bank that can offer these services. Can you recommend a bank or the type of account we should be asking banks to provide us with?

Name withheld

A business adviser can help Bob Smytherman, Chairman of the FPRA replies Your requirement is not unusual neither is the difficulty you face. Many counter staff at banks are not familiar with this type of request and it is often necessary to ask for an appointment with a business adviser to open a business or trust account. All the major banks provide these accounts and we have been informed that the Co-operative Bank has a particular interest in providing these services to community organisations such as Residents

30

Flat Living

I would appreciate the chance to set some things straight following last month’s piece about the administration of our holding companies (Peverel residents face uncertain future, Flat Living, issue 7, p10).

Our operating businesses are responsible for the day-to-day running of over 2,000 developments across England and Wales. As they are not in administration, it has been very much ‘business as usual’ for our residents and frontline staff.

Since Peverel’s holding companies went into administration in March, communicating with our residents, RMC clients and contractors has been our top priority. We have worked hard to reassure customers, and our property managers and customer services teams have continued to work as normal, providing the good level of service customers have come to expect from us.

You also alluded to “fears among Peverel-managed residents they may be in danger of losing service charge funds”. One of the first statements we posted on all of our customer-facing websites explained that bank accounts containing service charge monies belonging to the developments we manage have always been in safe, independent accounts, held under statutory trust.

These funds can only be used for the purposes of the development to which they relate. This has remained entirely unchanged since March and, indeed, is both a legislative requirement and condition of industry codes of practice Associations. It is important to remember that the bank account must be noted as a trust account and you can find a lot of information about this on the FPRA website at www.fpra.org.uk or by contacting LEASE – www.lease-advice.org

Deajan Investments Ltd v Benson & Others

I am writing to thank you for the excellent article regarding the above in Issue 7, which provided

as to when and where the documentation relating to the estimates was available for inspection.

Tim Drew

Right to insure?

Together with my fellow leaseholders, my block has just established a Right to Manage Company. However, our freeholder still wishes to take responsibility for insuring our building. We would prefer to take out insurance ourselves but we are unsure whether or not the freeholder has the right to insist. Can you help?

Bill Smith

Get in touch with your property manager issued by The Association of Residential Managing Agents (ARMA) and The Royal Institution of Chartered Surveyors (RICS).

If any of your readers live in one of our developments and would like to ask about the administration of our holding companies, the way we communicate with residents, or anything else for that matter, I would ask them to get in touch with their property manager or our customer service teams. The contact details are on our websites.

advice in the nick of time and prevented my infringing the terms of the (Section 20) consultation procedure.

I am the company secretary of the landlord company (owned by the lessees) which owns our block of ten flats. We are currently carrying out an internal redecoration programme under which we have to follow the procedure. The article included a paragraph warning landlords not to try to influence lessees.

Luckily, I received Issue 7 shortly before our AGM

Lee Middleburgh Group Managing Director Peverel Property Management

(which was attended by 80% of the membership) at which we chose our contractor on a provisional basis instead of a firm one. When one of the two non-attendees requested a copy of the documentation regarding the successful tender, I was able to tell him that I could not do this until the consultation procedure was over. Had it not been for your article, I might have sent him a copy, even though I was not legally obliged so to do as I had complied with the requirements whereby we had to state

Flat Living replies As a Right to Manage Company, you and your fellow lessees are now responsible for all the management functions for you block. Normally this would include arranging insurance but this could depend on the wording of your lease. Your freeholder may still have control of the insurance for your block if that is what is stated in the lease. If this is the case, your RTM Company would need to seek to vary the lease to enable you to take responsibility for insurance instead.

This would require agreement of all the parties to the lease, which may be difficult as the freeholder might not agree. As we understand it, your freeholder is entitled to arrange his own insurance in addition to any policy that you take out but if this is what he chooses to do, the freeholder must do so at his own expense.

If you cannot come to a mutually satisfactory agreement with your freeholder by negotiation, we would suggest that if you are FPRA members you contact them for free independent insurance and legal advice at www.fpra.org.uk or contact LEASE at www.lease-advice.org

Autumn 2011

Flat Living

RMC Directors Managing Agents Freeholders Developers

making property management insurance easier z z z z z

bespoke apartment block property insurance solutions dedicated secure outsourced online claims handling nationwide loss adjusting and rebuild valuations directors and officers liability cover health & safety guidance

LVT

Legal Expenses Policy

Blockinsure Limited is an appointed representative of John Henshall Ltd which is authorised and regulated by The Financial Services Authority.

A limited company registered in England and Wales number 06908510. Registered office - 1 Brassey Road, Old Potts Way, Shrewsbury SY3 7FA.

Opinion INTERVIEW

ThErE ArE somE ridicuLous AnomALiEs in currEnT LEGisLATion ThAT nEEd To bE TAckLEd LesLeY DAVis talks to

Alex Greenslade to find out more about ALEP and the way it works on behalf of members and the public

The AssociATion of Leasehold

Enfranchisement Practitioners or ALEP was the brainchild of Honorary Secretary Alex Greenslade, who was largely responsible for founding the organisation in 2007. Alex, a project manager and MD of Croydon-based Leasehold Solutions, saw an opportunity to bring together solicitors, surveyors, enfranchisement intermediaries and managing agents to promote best practice and provide networking opportunities for those working in the leasehold enfranchisement sector. Fed up with his clients coming to him having been given poor advice by people “dabbling” in this complex area of leasehold law, Alex saw a gap in the market which he believes ALEP is filling effectively. The organisation now has 115 members who have been vigorously vetted to ensure they have the skills in place that the public need when appointing someone to advise them on their lease extension, freehold purchase or management issues.

For leaseholders, the benefit of using an ALEP member to advise them is that each member has been checked out by a knowledgeable professional and comes backed

by ALEP’s code of practice. If members are found to be operating in breach of the code or are simply doing a bad job, they are taken off the ALEP list of recommended advisers.

“The aim,” Alex explains, “is to give the public confidence that they are dealing with professionals who know what they’re doing”.

For leasehold practitioners, ALEP not only provides a source of leads due to the membership list on the website but the organisation also provides a forum for communication, networking and events.

“Everyone gets to know each other and that promotes knowledge and information exchange as well as a spirit of cooperation among the different professions. Solicitors can

32

be comfortable in the knowledge that they are recommending a competent fellow ALEP member if clients are looking for a surveyor and vice versa,” says Alex.

In order to become ALEP members, firms are asked to submit details of their experience to-date in matters such as leasehold acquisitions and Right to Manage. They also have to provide copies of their professional indemnity insurance (PII) and provide both client and professional references from people who are not related to them either personally or professionally. Telephone interviews are then carried out by ALEP to determine the firm’s suitability for membership. “When practitioners renew their membership we make sure that expertise is still with the firm, checking that the expert or experts in leasehold matters hasn’t left and ask to see their current PII certificate,” Alex explains.

Members are then able to use the ALEP branding on their website and letterheads and are listed on the website so the public can identify a practitioner in their area. However, Alex believes that membership is a two-way process: “You have to put in some effort to attend events and use the ALEP logo to make it work for you,” he says.

According to Alex, ALEP also represents a step in the right direction towards effective self-regulation. “Members are expected to abide by the rules and provide an efficient,

Telephone interviews are carried out by ALEP to determine suitability for membership

Project manager Alex Greenslade saw a gap in the market that he believes ALEP now fills professional service. The public can trust a firm that is displaying the ALEP branding and if that company or individual doesn’t perform well, they have somewhere to go to lodge a complaint and know that it will be dealt with.

We believe we are all part of a group that raises its own game by being part of it,” he adds. He believes self-regulation is preferable to regulatory legislation being enforced on the sector for the simple reason that the industry is in the best position to know what needs to be done. “It shows a level of maturity and reason to put your own house in order before someone else attempts to do it for you,” he says. “We are all well aware that service charges are clearly a big issue: leaseholders are often overcharged and there has been a lot of bad publicity for unprofessional managing agents. They all get tarred with the same Autumn 2011

Flat Living

brush but to the best of my knowledge no one has researched the problem to find out how widespread it is in reality”.

With the future of the Leasehold Advisory Service (LEASE) still uncertain, ALEP has been in discussion with the organisation to determine whether or not it might take on some of the work that LEASE may no longer be able to do. “Around 80% of the enquiries received from the public by LEASE relate to service charges,” Alex explains. “That’s not really our area. Our focus is on the other 20% that relates to enfranchisement, lease extensions and right to manage. When we find out what is happening we are hoping we can take up some of the slack and provide the public with the information they need.”

Unlike LEASE, which is a governmentfunded organisation, ALEP takes a stance on

Flat Living

Autumn 2011

What’s Wrong With leasehold?

A Power of Attorney cannot be used * to sign a Section 42 Notice for a lease

extension or a Section 13 Notice for a freehold acquisition, which causes many problems particularly for elderly property owners; and

Anyone extending their lease is required * to pay a deposit when none is payable when purchasing the freehold.

leasehold issues on behalf of its members.

“There are some ridiculous anomalies in current legislation that need to be tackled,” says Alex and ALEP has drawn the attention of ministers to two points in particular. See box.

“We are only asking for minor change, not

wholesale leasehold reform but there is no will on the part of the government to act on behalf of the leasehold sector,” he says. However, he believes that one good thing that has changed in recent years is that “we have seen the disappearance of the mythology about lease length”. He explains that it is now more or less accepted that if you buy a flat you can’t get a mortgage on a non-central London property with less than 80 years on the lease. Lease length should really be tackled as part of the homebuying process rather than something that is tackled in a panic when you come to sell, he says. “If there is one really good piece of advice that we can offer leaseholders it is to get them to look at the length of their lease at the outset. It makes the process of extending leases less traumatic and people are likely to get a better deal.” ●

33

Bernie Wales BW Residential Property Consultancy

Practical & Professional Property Management � � � �

Managing Agent not listening to your problems?

Feel let down?

Generally unhappy with a lack of service?

Not getting value for money?

Then call BW Residential Property Consultancy today.

We offer a bespoke service individually tailored to your needs.

We specialise in hands-on property management, right to enfranchise, and LVT management.

We will help you manage more easily, more happily, more professionally.

T. 02380 302 022 bernie@berniewales.co.uk

www.berniewales.co.uk International House, George Curl Way, Southampton SO18 2RZ

ARMA

Surgery Find an agent Guidence Directory

35 38 42 44

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

SURGERY Bruce Maunder

Taylor, a chartered

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

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

QUESTION The gardener in our block was

recently replaced for no obvious reason, so I contacted him and he told me that he was not prepared to pay the managing agent 10% of his bill. That so surprised me that I went to see the new gardener and asked if he pays 10% to the managing agent. He candidly admitted that he does and said that it’s the industry norm. I am a little bit shocked. Is that true?

ANSWER Most definitely not.

The way you describe it, a hidden payment was being demanded by the managing agent for awarding a service contract to be paid for from Trust monies (S.42 – 1987 Act). A few managing agents have a contract in which their fee is calculated, in whole or in part, by reference to a percentage of costs, but such payment and its calculation is shown on the invoice and separately charged to the service charge account: it is not collected direct from the service supplier. As of July 1st, the Bribery Act came into effect. Compliance requires that your managing agent has an anti-bribery policy and takes active steps to prevent bribery. What you describe seems to be bribery. You need to establish how your managing agent calculates his fees, ask for a copy of his anti-bribery procedure, confirm in writing to the gardeners what they told you about this 10% payment and, in the first instance, take the matter up with a senior person at the firm of the managing agent.

Depending on their reply, assuming you receive one, you may wish to take the matter further.

The Association of Residential Managing Agents (ARMA) is the only professional body in England and Wales to focus exclusively on the management of residential leasehold blocks of flats. With more than 260 member firms, ARMA aims to promote excellence in the leasehold management sector and to represent the interests of its members, lessees, resident management companies (RMCs) and investor freeholders.

Flat Living

Autumn 2011

35

ArmA SURGERY Residents are now complaining about loss of privacy

If you have a query, email it to .uk fla info@ t-living.co d an es m All na addresses are withheld

Can I resign?

QUESTION I own a flat in a block

of six flats, five own a share of freehold and we have created a Ltd management company that we self-manage. For about 10 years, I have taken the responsibility of the accounts and more recently taken on secretarial and administrative duties with service suppliers. I wondered what choice/position I have to resign from all this.

CCTV QUESTION I am a director of a RMCo for a block

of 38 flats. We had a spate of security and break-in problems and, after consultation, installed a CCTV system which each resident can monitor from their own flat. The security problems appear to have been solved but a group of residents are now complaining of loss of privacy, fear that their movements and visitors are being watched, and want the individual monitoring facility to be stopped.

Others feel much safer in their own homes.

What is the Company’s legal position?

ANSWER The service chargeable items in most

modern leases contain a clause to the effect that additional services can be installed from time to time and it is probably such a clause on which you relied to install this CCTV system at a service charge cost.

Having done so, it is one of the common services and the Company now has an obligation to maintain it just like all the other common services. Before you installed it, the Company carried out the statutory S.20 consultation and it was at that time that those concerned with privacy should have raised their objections. I assume that they did not, probably because, at that time, it did not occur to them that there might be a privacy problem.

However, it is not only burglars who are deterred

by CCTV security systems: the risk of immoral or illegal use of flats tends to be eliminated when this sort of security arrangement is installed and unsuitable sub-tenants tend to look elsewhere for accommodation. My point is that CCTV camera

systems do have much wider effects than just deterring burglars.

The Upper Chamber (the appeal body from the LVT) has made it clear in more than one decision that many management problems have more than one solution which is within the brackets of reasonableness and, merely because one answer is reasonable, does not mean that there is no other reasonable answer.

It was reasonable to have given lessees a monitoring facility and, if lessees had objected at the consultation stage, it would probably have been reasonable not to have given lessees an individual monitoring facility.

Either decision could have been reasonable. If the Company now wishes to reverse its decision and remove the individual monitoring facility, some lessees may challenge the original cost and subsequent removal costs, effectively seeking repayment.

There is a further risk of those lessees who welcome the additional security possibly taking legal action to prevent any removal. Legal action is always expensive and risky. The Directors may wish to carefully consider the full impact of the CCTV system on the block, write out a short report to all lessees setting out the experience of advantages and disadvantages so far, put the two points of view, and ask for consultation replies. Not only should such an exercise assist in establishing a majority view and strength of feeling, it would also help to stop any risk of spreading misinformation and reduce the risk of anybody instructing lawyers and commencing speculative but potentially expensive litigation. ●

ANSWER Presumably you are unpaid

and have no contract, in which case you can resign any time you like. If so, one or more other directors will have to take on those responsibilities or employ a managing agent.

For small blocks of this size, there has been a trend for employing outside help with company secretarial and bookkeeping services, keeping other aspects of management in house for the reason that a willing person can often be found for that reduced role.

Definition QUESTION Please could

you tell me what to underlet a flat means?

ANSWER In most cases,

a lease of a flat is held

36

direct from the freeholder who owns the whole building. Some flats are owner-occupied which means that the occupier is the person who owns

the lease. Some flats are underlet, which means that the occupier is somebody who pays a rent to the person who owns the lease of the flat.

Try employing outside help Autumn 2011

Flat Living

No more estimated bills and an end to disputed bills...

Hallmark are the UK’s leading utilities partner for the lettings industry supporting well over 1000 companies with their award winning proven energy solutions.

As part of our fast growing Block Management portfolio, our clients now have the opportunity to install AMR Metering (Automatic Meter Reading) thus bringing to an end all those disputed and estimated bills that have dogged the supply of energy to Blocks.

How our AMR metering can help you...

Your Electricity Meters will be replaced with a new AMR Meter which will effectively mean an end to estimated invoices as the meter sends signals via the mobile phone network to the Data Collector. These readings are then used for accurate invoicing.

AMR Meters are dialled daily and the half hourly consumption is available to view on a web based application or sent directly to the customer for use on their energy management software so clients can view their usage.

The benefits of AMR Metering: • Accurate and Timely Electricity Bills • Improved Budgeting and Forecasting • Tariff Optimisation • Improved Energy Management • Improved Energy Efficiency • Reduction in Carbon Emissions • No more estimated bills

Coming Soon

For further information on AMR Metering, Energy Management or any of our services please contact us on 0800 088 4166 or visit us at hallmarkcorporate.com

Manage and view the status of each meter in your Block M anagement portfolio mor e efficiently.

In additon to our own exacting standards we are delighted that our preferred energy supplier, Scottish and Southern Energy have for the 5th consecutive year, been voted:

Best Overall Energy Supplier Best Value for Money Best for Customer Service

powered by

uSwitch Customer satisfaction Reports 2006, 2007, 2008, 2009 & 2010

e-MAIL

blockmanagement @hallmarkcorporate.com

FREEPHONE 0800 088 4166

VISIT US www.hallmarkcorporate.com

WWW.FLAT-LIVING.CO.UK

ArmA FIND AN AGENT

Professional, friendly and trusted by our many clients Providers of specialist Block Management services since 1996 In addition we provide ✱ Project management of major maintenance work ✱ Advice on, and management of, the ‘Right to Manage’ process ✱ Management of Leasehold Valuation Tribunal applications ✱ Professional, responsive and friendly

1 Birch Tree Walk, Watford Herts WD17 4SH info@qualitas-residential.co.uk 01923 211331

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

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

www.blockmanagement.com 020 7870 4000

38

Autumn 2011

Flat Living

FIND AN AGENT

altrist tel 0808 108 8012 Website www.altrist.co.uk email info@altrist.co.uk

leaseHOld ManaGeMent serViCes liMited tel 01494 464 333 Website www.lmsflats.co.uk email info@lmsflats.co.uk

lOndOn BlOCk ManaGeMent ltd tel 020 7870 4000 Website www.blockmanagement.com email info@blockmanagement.com

kinleiGH fOlkard & HayWard tel 020 8739 2150 Website www.kfh.co.uk email propman@kfh.co.uk

stOnedale PrOPerty ManaGeMent tel 020 3117 2600 Website www.stonedale.co.uk email info@stonedale.co.uk

GraCe Miller & CO tel 020 8944 9889 Website www.gracemiller.co.uk email mail@gracemiller.co.uk

PeMBertOns PrOPerty ManaGeMent tel 020 7483 8429 Website www.pembertonspm.co.uk email customerservices@pembertonspm.co.uk

aCOrn estate ManaGeMent tel 020 8315 5548 Website www.acorn.ltd.uk email kim.ward@acorn.ltd.uk GOrdOn & CO tel 0207 724 4477 Website gcmanagingagents.co.uk email management@gcmanagingagents.co.uk

ACORN ESTATE MANAGEMENT Specialists In Block And Estate Management Throughout South East London & Kent In addition to day to day management: • 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 Flat Living

Autumn 2011

39

WWW.FLAT-LIVING.CO.UK

Merlin estates (east) liMited tel 01920 877 458 Website www.merlin-estates.uk.com email info@merlin-estates.uk.com

qualitas residential tel 01923 211 331 Website www.qualitas-residential.co.uk email info@qualitas-residential.co.uk

JJ HOMes tel 020 8296 0181 Website www.jjhomes.co.uk email info@jjhomes.co.uk

ArmA

ArmA FIND AN AGENT Our promise.

We act for you, not instead of you

Specialist Block Management in the Midlands Highly skilled staff Quality service All types of residential buildings managed

WWW.FLAT-LIVING.CO.UK

Tel 01604 620422 Email info@obmsltd.com

A MERGER BETWEEN BIGWOOD AND CURRY & PARTNERS

When It Comes To Property Management We STILL Place Quality Above All Else.

Regulated by RICS

Residential Service Charge

cpbigwood.com 0121 233 7272

40

Autumn 2011

Flat Living

FIND AN AGENT

ArmA

lOnglEASE Tel 01562 851788 Website www.longleasepm.co.uk Email info@longleasepm.co.uk

HillcrEST ESTATE MAnAgEMEnT Tel 0117 973 0600 Website www.hillcrestestates.co.uk Email info@hillcrestates.co.uk

METrO PM Tel 0121 428 4747 Website www.metro-pm.co.uk Email mail@metro-pm.co.uk

WESTErn PErMAnEnT PrOPErTY Tel 029 2023 5151 Website www.wppmc.com Email info@wppmc.com

PrEMiEr ESTATES Tel 0845 491 8899 Website www.premierestateslimited.com Email info@premierestateslimited.com

cP BigWOOD Tel 0121 233 0500 Website www.cpbigwood.com Email edgbaston@bigwood.uk.com PEnnYcUicK cOllinS Tel 0121665 4150 Website www.pennycuick.co.uk Email info@pennycuick.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

Flat Living

Autumn 2011

OrcHArD Tel 01604 6204 22 Website www.obmsltd.com Email info@obmsltd.com JAKES PrOPErTY SErVicES Tel 01277 651432 Website www.jakesproperty.co.uk Email info@jakesproperty.co.uk KEnT gATEWAY BlOcK MAnAgEMEnT Tel 01634 814867 Website www.kgbm.co.uk Email info@kgbm.co.uk

41

WWW.FLAT-LIVING.CO.UK

HOMESTEAD Tel 01253 640040 Website www.homesteadcsl.com Email enquires@homesteadcsl.co.uk

ArmA guidance

noise

advisory note

06

Tackling noise in your block, ARMA’s Lessee Advisory Note LAN06 Noise offers some useful tips and advice for residents Many coMplaints froM residents of blocks

of flats arise from noise. Loud DIY or building activity, late night music, laminated floors and barking dogs are the main causes. Unfortunately anything your landlord or agent can do to prevent noise will be limited and it is unlikely that a court will evict a long leaseholder for noise problems. The Government advises residents to solve their noise problems by taking a stepped approach. ARMA recommends this too and their advice is outlined below.

There are also help lines and information leaflets available to assist you.

What lessees can do

ARMA recommends taking the following stepped approach: 1 Keep records 2 Start building a relationship with yourneighbour 3 Have a quiet word about the problem 4 Have a stronger word: explain the impact on you and/or your family 5 Employ mediation services 6 Contact your local authority 7 Contact abatement societies 8 Take legal action yourself

Keeping records

Keep a record of the nuisance as soon as it happens eg, date, time, type etc. It is not a legal requirement, but you may need it to back up your complaint and it could be used in evidence if you go to court.

approaching your neighbours

If you do approach them, wait until a suitable time, and although you may feel angry, do not lose your temper. It could be used against you at another time. Plan what you are going to say and keep calm.

42

Before you approach your neighbour, it is important to assess the risk to your personal safety and property. If you feel frightened or intimidated and you are worried that they may respond aggressively, then approaching them to complain may not be the best option for you; you may wish to consider contacting the police in these circumstances.

Most problems can be solved amicably without a need for further action. You may feel anxious about approaching your neighbor, but remember that they may be genuinely unaware that they are the source of a problem. When approached, often they will be embarrassed about the nuisance they have been causing and will be more considerate in future. It is important to do this as early as possible before the problem spirals out of control.

Mediation services

Neighbour mediation is a process in which a third party helps people to resolve disputes between those who live in the same locality or neighbourhood. It is a route that aims to assist both parties in identifying each other’s needs, sorting out any problems, exploring solutions and negotiating an agreement. This often helps preserve neighbourly relations or build better ones and can sort out disputes before they escalate. Most mediation services are registered charities although some are part of other organisations such as local authority housing mediation services departments or the local Citizens’ Advice Bureau.

Keep a record of the noise as soon as it happens

contacting your local authority Your local authority has a statutory duty to take reasonable steps to investigate complaints. Under Section 80 of the Environmental Protection Act 1990, the Environmental Health Officer (EHO) is required to take “all reasonable” steps to assess whether the noise constitutes a statutory nuisance.

If the EHO is satisfied that a statutory nuisance exists, or is likely to occur or reoccur, they have to serve a noise abatement notice.

However, they may suggest other ways forward: n Mediation: many local authorities have independent trained mediators who will offer to mediate between you and your neighbour.

Sometimes, this may work, but other times it may not be appropriate. n A warning letter: some local authorities may send a warning letter. Again, this may work, but it can backfire. It can alert the neighbours that you have complained and therefore the noise may become more intermittent and collecting evidence may be a problem. n An abatement order: ultimately, if the noise persists and the local authority has deemed the noise a statutory nuisance, they have a duty to serve a notice on the offenders. If the offender fails to comply they can face court action. The local authority also has the power to confiscate noise producing equipment.

Autumn 2011

Flat Living

Some local authorities now have emergency response teams to deal with urgent noise problems

Taking LegaL acTion yourseLf If for whatever reasons the local authority does not take action, of if you do not wish to involve them, you can complain about a noise problem direct to a magistrates’ court. The magistrates’ court will need to be persuaded that the noise problem amounts to a statutory nuisance. It is important that you keep a written record of the dates, times and duration of the noise as well as a description of its nature and the distress it causes you.

Before you complain to a magistrates’ court you should seek advice from Citizens’ Advice, a solicitor, or the clerk at the local courts. There is no legal aid for such cases.

LaTe nighT music and parTies

Some local authorities now have emergency response teams to deal with urgent noise problems. They can issue warnings, seize equipment and issue fixed penalty notices of £100 (Noise Act 1996).

Barking dogs

Incessant barking may be classed as a statutory nuisance and so can be reported to the local authority.

Flat Living

Autumn 2011

Local authorities have the power to gain entry... to stop noise BurgLar and car aLarms

Local authorities have the power to gain entry to premises to stop noise which can be used to stop misfiring alarms. The Noise and Statutory Nuisance Act 1993 gives local authorities’ power to disconnect burglar and car alarms.

WhaT can you expecT from your LandLord or agenT?

Many lessees believe that agents have a big stick to wave at noise nuisance in blocks of flats. This is not so. Most leases will contain covenants which say leaseholders shall not cause nuisance and annoyance to neighbours.

There may be more specific restrictions such as no loud music between, say, 11pm and 7.30am or that floors should be carpeted.

These clauses are all well and good but in practice difficult to enforce for several reasons.

The meaning of the covenant should be clear before considering enforcement. Any benefit of the doubt over the meaning will always be given to the lessee.

The lease may not contain a clause that requires the landlord to enforce the covenants; if it does not there is no obligation on the landlord to take any action. Even if the lease does contain a clause requiring the landlord to enforce the covenants against other lessees (a mutual enforceability covenant) there is usually a catch; the catch is that the complainant leaseholder suffering the noise will have to pay the landlord’s costs of enforcing the covenant.

So how does the landlord enforce a covenant against say noise or one that requires carpets not laminated floors? A reminder letter to the offending lessee may work. If it does not, then the legal remedies open to the landlord are an injunction or forfeiture.

Injunctions are costly but can be applied for with or without forfeiture. Also the aggrieved lessee can apply for an injunction and may well be more successful if he/she does. ● For further sources of help and information, you can download the full version of LAN06 Noise from the Flat Living website at www.flat-living.co.uk Association of Residential Managing Agents Limited (ARMA) 178 Battersea Park Road, London SW11 4ND Tel 0207 978 2607 Fax 0207 498 6153 Email info@arma.org.uk Website www.arma.org.uk

43

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 Eddisons Residential Ltd  0113 243 0101 GVA Grimley  0113 280 8018 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  0845 458 1228 Watson Property Management  01904 782 022

North WEst

Andrew Louis Property Management Ltd  0151 330 5355 Atlantis Estates Ltd  0800 612 1515 Base Estate Management Ltd  01204 498040 Braemar Estates (Residential) Limited  0161 929 2300 Countrywide Estate Management  0161 332 7551 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

44

Royle Estates (Lancaster) Ltd  01524 36311 Scanlans Property Management LLP  0161 236 8888 The Guthrie Partnership  01565 755390 West Kirby Property Management Limited  0151 632 1844

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 Blue Property Management UK Limited  0845 331 3585 Centrick Property Management  0845 6800 981 Cottons  0121 247 2030 Countrywide Estate Management  02476 550303 Countrywide Estate Management  0121 454 9167 Countrywide Estate Management  0116 254 8364 Curry & Partners  0121 233 0500 D & B Property Management Company Ltd  0115 979 2794 Freehold Property Services Ltd  0121 551 5988 Hadrian Property Management Company Limited  01543 410922 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 MITIE Scotgate Ltd  01778 382240 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 Walton & Allen Properties Ltd  0115 924 3304 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  01702 221000 Countrywide Estate Management  01442 242726 Covenant Management  01993 847 601 DJC Property Management Limited  0870 481 0110 Francis Butson & Associates  01480 226740 Hillcrest Estate Management Ltd  01277 356231 Homes & Watson Partnership Ltd  01277 355200 Hurford Salvi Carr Property Management  01992 500040 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 OM Property Management  01582 393700 Peerless Properties (Oxford) Limited  01869 331198 PMS Leasehold Management Ltd  01206 835350 Qualitas Residential  01923 211331 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 St Andrews Bureau Ltd  01992 501752 Touchstone  01908 633918 Trinity Estates  01442 437655 Watson Mitchell  01234 840 555

loNdoN

Abbott Management  020 7225 1995 Adelaide Jones  020 7725 5800 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 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 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 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

Autumn 2011

Flat Living

MANAGING AGENTS DIRECTORY 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 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 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 Northleach Property Management Ltd  020 8315 0050 Parkgate-Aspen Property Management  020 8732 8888 Parkwood Management Company (London) Ltd  020 8368 8111 Pembertons Residential Ltd  0207 483 8429

Flat Living

Autumn 2011

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  020 7723 2111 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 43924 Broadleaf Management Services Limited  01425 403 767 Burns Property Management  01202 391663 Campsie  01753 410705 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  01276 601290 Countrywide Estate Management  01273 608746 Countywide Estate Management  01323 646646 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 854123 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 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 JJ Homes (Properties) Ltd  020 8296 0181 John Mortimer Property Management Ltd  01344 823650 Jordan & Cook  01903 820740 Kent Gateway Block Management  01634 814867

ArmA Leasehold Management Limited  01903 238909 Leasehold Management Limited  01403 251 570 MH Property Management  01795 599 010 Minster Property Management Limited  01202 883360 / 01202 842812 Now Professional Property Management  02380 224189 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 Port Hall Property Management Ltd  01273 504125 Prior Estates Limited  020 8676 3020 Priors  01273 737586 Rayners  01883 742690 Rebbeck Brothers  01202 780 780 Ross & Co  01323 841814 Stride & Son  01243 813760 Sweetings Property Management Limited  020 8941 7799 Watson Property Management  0845 675 5541 Worthing & District Estate Management  01903 212857 For more information on aRMa members please visit www.arma.org.uk

45

LBB CHARTERED SURVEYORS LANGLEY BYERS BENNETT

Chartered Surveyors with specialist Leasehold Reform and Building Surveying Consultancy Departments

Enfranchisement Specialists ● Freehold Purchase ● Lease Extensions ● Houses and Flats ● Valuation and Negotiation Advice ● Expert Evidence at Court or Tribunal Chartered Building Surveyors ● Service Charge Disputes ● Repair and Maintenance Advice ● Specifications ● Building Contract Administration

St Bartholomew House, 90-94 Fleet Street London EC4Y 1DG Tel: +44(0)20 7822 8850 Fax: +44(0)20 7822 8851 Email: info@ibb.org.uk Website: www.ibb.org.uk

LEASE EXTENSIONS

Why extend your LEASE ?

If you are a leaseholder, chances are that at some point you will want to extend your lease. STEWART GRAY explains what you need to know

England and Wales still have a feudal land-owning system ENGLAND AND WALES still have a feudal land owning system inherited from the Normans and, as a result, all English and Welsh land is technically owned by the Crown. The land on which most property stands is held from the crown using a form of tenure called freehold.

This is the nearest thing in law to absolute ownership of land. A freeholder ‘owns’ not only the surface of the land on title but landowner’s rights which extend upwards to the heavens and down to the centre of the earth. When deciding to build a house the freeholder can (with planning permission) build as many storeys as he wishes upwards or downwards and the maintenance of his entire property is his own responsibility. Having built a freehold house the property can be bought and sold with the maintenance responsibility passing along with the ownership in a relatively straightforward manner.

Flat Living

Autumn 2011

The problem arises when a freehold is divided laterally (into flats for example). If a freehold house is converted into two flats, one above the other, then the two flats cannot each be sold freehold as the ownership rights would clash. The question of maintenance also becomes complicated. Who is to be responsible, for example, for maintaining the roof? Perhaps the upper flat - but if this is a small studio in a large building such an

All English and Welsh land is technically owned by the Crown

onerous maintenance obligation would render the studio worthless.

The solution is for the freehold to be retained by one entity who owns the land and is responsible for the maintenance of the commonly held parts of the building. The flats are then given long term leases of 99 years or more which can be sold to independent flat owners. The extent of each flat is described in detail on the lease and each of the flat owners maintains their own property. In addition the leaseholders each pay an agreed share of the freeholder’s service charges. This pre-agreed service charge should (in theory) allow the freeholder to maintain parts of the building not covered by leases without disputes arising over what share of maintenance should be paid by the various flats each time any work is carried out. (see pages 53-58 of this issue for more on service charges).

47

LEASE EXTENSIONS

eXtenDinG YoUr leASe WHAT’S THE COST? AeneAn convAlliS mAurIS mOSELIE NuLLA

Use a professional valuer to calculate the cost of your lease extension and help you negotiate the right deal with your freeholder, says Ben Smith Since the receSSion, banks

have been less inclined to provide mortgages for property with shorter leases and some lenders are now only providing finance for homes with more than 80 years remaining. I have had many vendors come to me who have found a buyer, but the deal has fallen through due to the short length of the lease.

So if you want to sell your flat and it has a short lease, what should you do?

The vital first step is to get a valuation – this will give you the information to explain to your buyer how much a lease extension may cost and that cost can then be incorporated into the purchase price.

Choose a valuer who is a member of the Royal Institution of Chartered Surveyors (RICS). As well as giving you an indication of cost in the form of a valuation report, he or she will also guide you through the legal process and help you negotiate with your freeholder to make sure both parties are getting a fair deal.

Before you can serve notice on the freeholder, forcing them to extend your lease, the law states that you must have owned your property for more than two years. This means that once the property has changed hands, your buyer would not be able to extend for two years, so the thing to do is to serve notice on exchange of contracts and then assign the right of the notice to the buyer.

This allows the buyer to continue the process once the sale goes through.

As well as assessing the total value of your lease extension, a good valuer working alongside a solicitor, should be able to assist with serving notice, receiving a counter notice and negotiating a final premium.

So how much will all this cost and how is it calculated? As an example, consider a flat with 70 years remaining on the lease

48

with a ground rent of £10 per year. The calculation to extend this lease consists of three elements: n ground rent income; n reversionary interest; and n marriage value.

The ‘ground rent income’ is the income stream of £10 for 70 years and the value of this income can be calculated using a capitalisation rate, which estimates future value.

If you do not extend the lease, then after 70 years the flat would ‘revert’ back to the freeholder. The value of this ‘reversionary interest’ to the freeholder is based on the value of the flat and that, given the choice, we would rather be given £10 now than in 70 years time.

To take account of this, valuers apply a capitalisation rate to the value of the flat.

By extending the 70 year lease for, say 90 years (to a total of 160 years) you are essentially ‘marrying’ the existing lease to the new lease. This results in an increase in the value of the flat which is known as the ‘marriage value’ and is the third part of the calculation. By law, the marriage value must be split 50:50 between the leaseholder and the freeholder if there are less than 80 years remaining on the lease, so that both parties benefit.

As far as lease extensions are concerned, 80 is the magic number.

Every leaseholder should be aware that if your lease drops a single day below that 80 year threshold it could DOUBLE the premium payable if you decide you want to extend it! ● Ben Smith is a member of the royal institution of chartered Surveyors and is a Director of Allen & Smith chartered Surveyors, with offices in North West London, South East London and Berkshire tel 01491 875828 email info@ allensmithsurveyors.com Website www. allensmithsurveyors.com

assessing the total value of the lease

From the freeholder’s perspective purchasing a freehold investment can be expensive and building management can be a significant burden. For this reason freeholders expect a healthy return on their investments.

This is where the freehold / leasehold system is controversial because the two are linked and a return to the freeholder means a cost to the flat owners. Often the main source of income for freeholders is in lease extensions and it is this element that is often controversial. It is here that the lessee’s interests and those of the freeholder most obviously clash.

Beware short leases

What is so often forgotten by flat buyers is that it is just a lease that is being purchased not bricks and mortar. The lease is a diminishing asset and as the term reduces so does the value.

The shorter the lease becomes, the greater the cost to the leaseholder of extending and the greater the value to the freeholder. For this

Anything under 80 years will be difficult to sell reason freeholders generally have no incentive to encourage flat owners to extend. Potential buyers of flats and current flat owners must therefore make themselves aware of the length of their own lease and the cost of extending it.

As a rule of thumb anything under 80 years is considered ‘short’ but really even if your lease is approaching 85 years you should start to make enquiries.

There are two linked problems with a short lease: First, anything under 80 years will be difficult to sell and anything below 70 years might not even qualify for a mortgage, limiting the market drastically. The second problem is the cost of extending, which usually runs into thousands of pounds and increases (sometimes dramatically) as the lease term runs down. The key is to make yourself aware of any potential lease length issue and face up to it early before the cost becomes unaffordable. Fortunately leaseholders do now have rights and there is a wealth of advice available, for example the Leasehold Advisory Service which can be easily accessed online at www.lease-advice.org is an excellent resource.

In the past if a lease had fallen below 80 years the freeholder had flat owners over a barrel. Short lease flats could become virtually un-saleable without a lease extension and the freeholder was free to name his price on extensions or refuse to extend at all while the cost rose inexorably.

This was recognised to be inequitable and the Leasehold Reform Act was passed in 1993 giving leaseholders the right to extend their lease for a fair price. Under the same Act groups of leaseholders in blocks of flats were given the right to buy out their freeholder completely by what is known as collective Autumn 2011

Flat Living

enfranchisement. This requires participation by at least 50% of flat owners and there are other eligibility requirements so leaseholders must take professional advice if considering this course.

What’s the benefit?

The benefit of extending your lease under the 1993 act is that the entitlement is for an additional 90 years at no ground rent. This means that once extended, flat owners can have the peace of mind that their investment in their own property is secure for a lifetime and the asset is no longer a diminishing one.

A flat with a lease extended under the statutory provisions should sell for full market value even if it is held by the leaseholder for a generation.

Similarly, collaborating with fellow leaseholders to buy the freeholder out resolves the lease length issue because with the freehold purchase comes the right to extend your individual leases by 999 years at any time.

The collective enfranchisement route also has other benefits, particularly if flat owners are in dispute with their freeholders over maintenance (or lack of it). By purchasing the freehold, blocks of flats become effectively co-operatives managing their own affairs in terms of maintenance and insurance and usually make significant savings in the process. In this respect it is similar to the ‘right to manage’ which has more recently been granted to leaseholders but without the limitations. Right to manage is not a remedy for short leases. However if leaseholders are having management issues and do not qualify for enfranchisement it is another alternative to explore.

The Leasehold Reform Act 1993 lays down a formula for establishing the price of extending your lease or buying the freehold

What constitutes a fair price remains hotly contested but what constitutes a fair price remains hotly contested. Within the set formula opposite are a number of variables and while one surveyor might put forward a value favourable to flatowners another might take a stance more favourable to the freeholder. For this reason both sides should take independent advice.

Generally a settlement price is negotiated between the two sides’ valuers. Where no agreement can be reached the Leasehold Valuation Tribunal (LVT) can determine the price. Often a price can be privately negotiated but valuation advice is essential to ensure that the terms and price of informal deals are equitable while an awareness of the legal process is useful in case they are not. ● Stewart Gray Principal, Austin Gray, Brighton Tel 01273 201980 www.austingray.co.uk

Flat Living

Autumn 2011

PRICE TO BE PAID FOR PREMIUM OF A NEW LEASE

Valuer John ByeRS shows the calculations involved in assessing the value of a lease and does the maths

basic information

Freehold Value £175,000 Valuation Date 3/4/10 Capitalisation Rate 7.0% Deferment Rate 5.00% LeaSe Commencement 1/8/86 Term 99 years Unexpired Term 75.33 years Ground Rent £80.00 for the first 33 years ie till 1/8/19 £160.00 for the remainder of the term ie till 31/7/85 Relativity 93.5% Uplift 1%

9.33 years 66.00 years

Value of the freeholder’s existing interest

1 Present Ground Rent Income YP 9.33 years @ 7% Future Ground Rent Income YP 66.00 years @ 7% PV £1 9.33 years @ 7% 2 Reversion to Freehold in Possession PV £1 75.33 years @ 5% Value of Freeholder’s existing Interest

£80.00 6.6861 £160.00 14.1214 0.5320 £175,000 0.0253

£535 £1,202 £4,435 £6,172

Value of the freeholder’s interest after Lease extension Reversion to Freehold in Possession £175,000 PV £1 165.33 years @ 5.00% 0.0003 Value of the Freeholder’s Interest after Lease extension

Diminution in Value of the freeholder’s interest Value of Freeholder’s Existing Interest Value of the Freeholder’s Interest After Lease Extension Diminution in Value of the Freeholder’s Interest

£55 £55

£6,172 £55 £6,117

Marriage Value

Value of Property after Lease extension Freeholder’s Interest Leaseholder’s Interest Freehold Value £175,000 Relativity 99.0% Value of Property after Lease extension existing Value of Property Freeholder’s Existing Interest Leaseholder’s Existing Interest Freehold Value £175,000 Relativity 93.5% existing Value of Property Marriage Value Value of Property after Lease Extension £173,305 Existing Value of Property £169,742 Marriage Value £3,563 Freeholder’s share of any Marriage Value 50% 50%

£55 £173,250 £173,305 £6,117 £163,625 £169,742

£1,782

Premium Payable to freeholder for Grant of Lease extension Diminution in the Freeholders Interest Freeholder’s share of any Marriage Value

£6,117 £1,782

£7,898

John Byers is founding director of LBB chartered surveyors Tel 020 7822 8850 www.lbb.org.uk

49

LEASE EXTENSIONS

Making it

haPPen If you want to extend your lease you will need to take professional advice. Graham Jaffe and KaTie Cohen explain what is involved

The lease exTension process starts with the valuer. A valuation report calculation from a qualified and experienced leasehold enfranchisement valuer (see page 48 for more on the valuer’s role) sets out the likely cost of the lease extension. The valuer will also suggest the premium to be inserted into the Section 42 Notice which triggers the statutory procedure for acquiring the new lease. This premium is generally 15-20% below the valuation.

Enter the solicitor. He or she will include the premium in the Notice to be served on the freeholder and any other landlord and which outlines the leaseholder’s claim to extend the lease. This Notice is pivotal to the whole lease extension process and must be prepared by a solicitor specialising in leasehold enfranchisement.

Serving notice

The Notice should preferably be served by hand and proof of delivery requested so that it can’t be disputed at a later date. The Notice must be served on what is known as the ‘competent’ landlord - the person who has the legal right to grant a 90-year lease extension.

This is generally the freeholder, although in some cases there may be intermediate landlords as well. All relevant landlords must be served with a copy of the Notice and this also includes management companies and any other party to the existing lease.

The Notice should give a response date not less than two months (two months and ten

days is advisable) from the date it was served and the registered owners of the flat must sign the Notice personally. It can’t be signed under a Power of Attorney and if the leaseholder is a company, that company must execute the Notice in accordance with its Memorandum and Articles of Association.

The leaseholder’s solicitor will then lodge a ‘Unilateral Notice’ at the Land Registry against the freehold and any intermediate leasehold titles. The fee payable for this is £50. If the property in question is not listed by the Land Registry (ie, it is unregistered), a

The date when the Notice is served fixes the valuation date Class C (iv) Land Charge should be lodged. This provides protection for the leaseholder if the landlord decides to sell the freehold and means that the lease extension process will continue as if the new owner had received the Notice.

Fixing the coSt oF the leaSe

The date when the Notice is served fixes the valuation date. This means that variables

WhAT IS ThE rOLE Of ThE SOLIcITOr? Once you have found a solicitor to act on your behalf he or she will: n Check whether the leaseholder qualifies for a lease extension; n Draft the section 42 Notice and serve it on the ‘competent’ landlord (usually the freeholder) and any intermediate landlord; n Deduce title and pay the statutory deposit to the competent landlord’s solicitor;

50

n Make access arrangements for the valuer/s acting for the landlord/s; n Receive the counter notice and send a copy to the appointed valuer n Arrange for the valuers to open negotiation n Apply to the LVT not less than two months and not more than six months from

the date that the counter notice is served. This protects the Notice and makes sure it is not thought to have been withdrawn; and n Negotiate the terms of the new lease with the competent landlord’s solicitor and agree the costs that the leaseholder will be expected to pay.

such as the unexpired term of the lease, the present value of the flat and its assumed future value are set and any further changes will not affect negotiations. The competent landlord’s solicitor acknowledges receipt – normally without admitting the validity of the claim – and will include current copies of the leasehold title, a full copy of the lease with a coloured plan and a request for the statutory deposit which equates to 10% of the total premium offered in the Notice. The solicitor will then request access arrangements to the flat so that the landlord’s valuer can carry out his or her valuation of the property.

The competent landlord must serve the leaseholder via his or her solicitor with a ‘counternotice’, no later than the response date specified in the Notice. This will set out whether or not the claim for a lease extension is accepted and any other terms of the lease extension which the landlord may want included in the new lease in due course.

The valuers appointed by the leaseholder and freeholder then have the opportunity to negotiate and agree terms acceptable to both parties. It is open to either party to apply to the Leasehold Valuation Tribunal (LVT) not less than two months and not more than six months from the date of the counternotice.

In a minority of cases where agreement can’t be reached by negotiation, the matter can be heard by the LVT who will determine the premium and terms of the lease extension if these can’t be agreed in advance of the hearing.

What Will it coSt?

Leaseholders are liable for their own legal and valuation costs and – where one is needed – the fees of a barrister and/or valuer to represent Autumn 2011

Flat Living

A BArriSter’S role in A leASe extenSion ClAim

When a lease extension claim goes wrong its time to appoint a barrister to work on your behalf, says StAn

gAllAgher

Applying for A lease extension

Get good advice from an experienced solicitor them at the LVT. There will also be Stamp Duty Land Tax to pay if the premium is more than £125,000 (refer to HMRC for current rates) as well as Land Registry fees and other costs such as search fees. The leaseholder is also expected to pay the landlord’s reasonable legal and valuation fees. Legal fees are limited to the costs related to consideration of the Notice; requesting deduction of title and the statutory deposit; requesting access details in order to carry out the valuation and the valuer’s fee; and dealing with all aspects of conveyencing through to completion. The premium paid for extending the lease is established from the outset by the valuer and the way this is calculated is explained in detail on page 49.

GettinG it riGht

Reasons why a lease extension may not be granted are: n If there are inaccuracies in the original Notice; n If the premium offered in the Notice is unreasonably low; or n If the property has not been owned and registered at the Land Registry for a period of two years.

To make sure your lease extension goes through as smoothly as possible it is vital that you get good advice from an experienced solicitor. Leasehold enfranchisement is a complex field of law so make sure you get it right first time and choose a solicitor and valuer with a proven track record in the leasehold sector. ● graham Jaffe and Katie Cohen are Partners with JPC Law email gjaffe@jpclaw.co.uk and kcohen@jpclaw.co.uk tel 020 7644 7260 and 020 7644 7261 Website www.jpclaw.co.uk

Flat Living

Autumn 2011

should be less complex than a collective enfranchisement application. All the leaseholder is trying to do is to substitute the existing lease of the flat for one that is 90 years longer and will usually be in the same terms as the existing lease, save that the ground rent has been extinguished.

What could possibly go wrong? In theory a great deal, though, in practice, particularly in the current nervous property market, most claims complete in a more or less satisfactory manner on terms agreed through negotiations between the parties, usually conducted through the respective valuers.

However, this is not always the case.

It is when (or preferably before) complications strike that it is important to obtain specialist legal advice, whether from a barrister, or from a solicitor with sufficient experience in enfranchisement litigation i.e. in dealing with the Court or LVT/Upper Tribunal fallout from a contested claim.

Specialist advice is likely to be required where the landlord responds to the leaseholder’s notice of claim by denying the right to a lease extension and/or asserting that the notice of claim is invalid.

It is particularly important to ensure that the claim is effective when, as frequently occurs on the sale of a flat with a short unexpired lease term, the flat is sold with the benefit of a tenant’s notice of claim served by the vendor leaseholder. In such cases, if it goes wrong, it will not be possible for the purchaser to serve a further tenant’s notice until the purchaser has owned the flat for at least two years. The resultant delay could be disastrous, particularly if the lease has less than two years to run.

What if the extent of the premises originally demised by the existing lease does not accord with the facts on the ground, say if, over the years, the leaseholder, or a former leaseholder, has incorporated the roof void into the flat, or erected a balcony on a flat roof outside the flat, or taken exclusive possession of land that started out as communal amenity land or parking, or has otherwise encroached upon the landlord’s retained property. Depending on the circumstances it may be that these additional areas should be treated as accretions to the existing lease and therefore fall to be included in the extended lease granted on a lease extension claim.

Pursuing such a claim will require specialist legal advice.

At a LVT valuation hearing (which will be required if the claim is admitted but the parties cannot agree the premium for the new lease) a valuer will often be retained to act in a dual role, as both advocate and expert witness. In a typical low to medium value claim this should be

a cost effective approach (as the LVT only has very limited powers to award costs each side will pay its own costs of the hearing regardless of the outcome).

The factors that point to instructing a barrister for the hearing are first, value i.e. how far the valuers are apart and second, legal complexity. For example if there is a valuation-sensitive dispute as to the terms of the existing lease, such as its rent review provisions, or the extent of its restrictions on sub-letting or alterations.

To this I would add that the role of advocate at a hearing is fundamentally different to that of the expert witness. The advocate’s duty is to promote the interests of the client by making submissions as to the law on point and the factual and expert evidence before the LVT. The advocate cannot give evidence or venture a personal

The role of advocate… is fundamentally different to that of the expert witness opinion as to the law or the facts (unless asked to do so by the LVT, which, generally, should not happen). An expert witness on the other hand owes an overriding duty to the LVT to assist it by giving independent, objective and unbiased expert evidence, in other words, to tell the LVT what the expert’s true opinion as to the disputed values is.

An expert witness doubling up as advocate necessarily involves trying to wear two quite different hats. As a fashion statement this is fraught with danger and it is unlikely to be practical in rough conditions. ● Stan gallagher is a Barrister at Tanfield Chambers, London, specialising in landlord & tenant law

51

Service chargeS

Plan ahead to avoid SurPriSe chargeS

Some leaseholders may pay a higher service charge than others in their building

Service charge arrangements for your flat are determined by your lease, as CHRIStopHER LASt explains

*

A SERVICE CHARGE is an amount of money paid by leaseholders for services provided by their freeholder or management company. The obligation to pay service charges should be set out in the lease; if not there will be no requirement to pay.

The service charge covenants in a lease may provide for leaseholders to pay an equal share of the total cost of the services provided for the building or estate, or instead set out a formula for calculating the individual leaseholder’s liability such as floor space or rateable value.

This means that some leaseholders may pay a higher service charge than others in the same building.

Service charges must be ‘reasonably incurred’ and be of a reasonable standard.

There are ways to hold your freeholder or manager to account. You can request from the freeholder a written summary of costs incurred during the last accounting period.

They must send it to the leaseholder within six months of the end of the last accounting period or within one month of the request whichever is later. If you wish, you can then send a written request to the freeholder asking to inspect the accounts and receipts within six months of receiving the summary.

Failure to comply with either request is potentially a criminal offence and the freeholder risks being prosecuted and fined up

Flat Living

Autumn 2011

to £2,500. Local authorities are exempt from these provisions but can bring a prosecution.

If you believe your service charges are not reasonable and you wish to challenge the amount you are being charged, the Leasehold Valuation Tribunal (LVT) can determine the amount of any service charge demand you are liable to pay. However, do regard applications to the LVT as a last resort and first consider negotiating with your freeholder or inviting them into mediation on a dispute.

Should you require any advice on service charges, the Leasehold Advisory Service (LEASE) is able to assist. A range of advice guides and FAQs are available to download from the website at www.lease-advice.org.uk ● CHRIStopHER LASt is a legal adviser at LEASE

Service chargeS are defined by Section 18 of the Landlord and Tenant act 1985 as: “…an amount payable by a tenant of a dwelling as part of or in addition to the rent — (a) which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the freeholder’s costs of management, and (b) the whole or part of which varies or may vary according to the relevant costs.”

Use a properly costed maintenance schedule to avoid being hit by unexpected repairs and one-off bills, says StEVE BREwER

StEVE BREwER , a building surveyor with Watts Group PLC has just finished doing a condition survey on 790 apartments in London Docklands.

The property managers were keen to determine the condition of the building fabric and services and are putting a ‘no surprises’ maintenance schedule in place to avoid residents being hit by unexpected hikes in their service charge.

“Maintenance schedules are a vital tool not only for keeping your block in good repair and spreading the bills but also for peace of mind that RMCs are meeting their health & safety obligations”, says Steve. “If the roof of your block is in poor repair and starts to leak, you and your fellow leaseholders will have more to deal with than simply replacing the slates or tiles. Residents may find themselves with massive bills to cover the cost of repairing water damage to internal finishes and contents and facing a hike in insurance premiums. Even more serious is the prospect of electrical faults or concrete failure causing balconies to crack or collapse.

Such problems can lead to serious accidents or even loss of life for which RMC directors could find themselves personally liable.”

See page 23 of this issue for more on maintenance schedules and how to put one in place for your block.

What starts off as a bit of a leak could end up being expensive

53

Service chargeS

Can’t pay, won’t pay

So you’re in dispute with your landlord over your service charge. Now what do you do?

elaine dobson and helen MattheWs talk readers through the legal process Most long leases of flats include provisions

by the landlord to repair, maintain and insure the building and by the tenant to pay their share of the cost in the form of a service charge. The wording of the lease is crucial in determining what tenants are liable to pay for but service charges must be reasonably incurred and any services or works carried out must be of a reasonable standard, as specified in Section 19 of the Landlord and Tenant Act 1985.

Consulting with residents

Freeholders and management companies are also required by Section 20 of the Act to carry out detailed consultation with leaseholders before any work to blocks of flats is started.

Failure to follow these requirements rigorously can result in a landlord only being able to recover £250 per flat, even if the costs are very substantial indeed. In the recent case of Daejan Investments v Benson [2011] EWCA Civ 38 (see Flat Living, issue 7, p31) the landlord went through the first steps of the consultation procedure required by the Act but did not comply with it strictly enough. As only one of four estimates obtained were circulated to the five tenants, the Court of Appeal decided the landlord could only recover £250 per flat as against a total bill of £270,000.

in dispute

It is easy to see how disputes can arise. A landlord, perhaps blissfully unaware of the consultation requirements, decides it is high time his building with 12 flats has a makeover.

He goes ahead and instructs his builder to “do whatever needs to be done” in the expectation that, under the lease terms, he will be able to pass on the cost to the tenants. Imagine

using the lVt

Finding the right solicitor how do you go about appointing the right person for the job? Make sure any solicitor you choose is familiar with current leasehold legislation and has relevant experience in the leasehold sector. it is vital to n ask about their experience n seek references n determine how much they will charge if you don’t get a satisfactory response to your questions – find someone else. his surprise when his builder arrives at the property to erect scaffolding and the tenants ring him and ask what is going on. He tells them that he has already entered into a contract with the builder costing £300,000 so the works must go ahead.

what next?

So what should the tenants do, given the huge bill with which they might be faced?

In the first place the tenants should meet up, appoint two or three residents to take the lead and agree on a way forward, including appointing a suitably qualified solicitor to advise.

The solicitor consulted by the tenants is likely to advise them that a letter should be sent urgently to the landlord saying that unless he goes through the required consultation procedure they will not be prepared to pay the costs, and if necessary they will apply to the Leasehold Valuation Tribunal (LVT) challenging the amount of money spent on their behalf.

Supposing the landlord will not back down, carries on with the work regardless and invoices the tenants for some £25,000 each? The tenants can apply to the LVT to determine the reasonableness of the service charges. They can seek to rely on the landlord’s failure to follow the section 20 consultation procedure to have their contributions limited to £250 each. The LVT can however order that the landlord was entitled to dispense with the consultation procedure. If the tenants’ solicitor advises that this may happen, a building surveyor should be appointed to act as expert witness. The surveyor can inspect the building and the works which the landlord has done and set out in an itemised report his expert opinion as to whether the works are of a reasonable standard and what would be a reasonable cost for them. The LVT will consider this report at a hearing, along with any expert evidence from the landlord and decide what the tenants must pay to the landlord as service charges for the works, the optimum result being their only having to pay £250 each.

This can be a costly exercise for the tenants if it proves necessary for there to be an LVT hearing to settle the matter, perhaps around £15,000/£25,000 plus VAT between them. Even if successful the LVT can only award a maximum £500 costs against the losing party, but this is rare. If however the end result is that the tenants pay only £250 each instead of £25,000 each then it will be money well spent. The tenants can ask the LVT to make an order that the landlord cannot add his costs of the LVT application to the service charges (a “section 20C” application). ● elaine dobson is a Real Estate partner and helen Matthews a Senior Associate at Bircham Dyson Bell LLP tel 020 7227 7000 Website www.bdb-law.co.uk

ThaT Sinking feeling The last thing any leaseholder wants is to find that their service charge is suddenly ramped up to pay for unforeseen repairs. So what’s the solution?

Leases often call for landlords to establish a ‘sinking’ or ‘reserve’ fund which allows residents to build up a sum of money to cover the cost of expensive works such as structural repairs, external decoration or wholesale window replacement.

There are several advantages to maintaining

54

a reserve fund, even if your lease doesn’t call for one. Sinking funds: n earn interest as they are held for a longer period than regular service charge monies which increases the fund and helps ease the impact of rising repair costs; n allow payments to be spread, in some cases,

over many years; and n even out annual charges, avoiding one-off bills and helping leaseholders to budget in advance.

If your lease calls for a sinking fund, it may also determine how much is to be paid by each resident. If this is not the case, the charge levied by the landlord must be

‘reasonable’ and having a maintenance schedule in place (see page 53) makes contributions to a sinking fund transparent. However, leaseholders have the same right to challenge unreasonable charges via the LVT as with annual service charges.

Any unused payments made to a sinking fund

are not normally repaid to leaseholders if they move out of the block, but all leases are different and this may be the case if the lease specifies it.

There is more information on service charges and sinking funds on our web site at www.flat-living.co.uk and on the lease website at www.lease-advice.org

Autumn 2011

Flat Living

Are you considering extending your lease? then contact us for specialist advice

m m m m

We can also help with: Collective Freehold Purchase Right to Manage Service Charge Disputes Breach of Lease Covenants etc

4 Durley Chine Road, Bournemouth. BH2 5QT Offices at Poole, Charminster and Broadstone

Contact Andrew Howard

Tel: 01202 293226

www.coles-miller.co.uk

Coles Miller Solicitors LLP

Is your maintenance and cleaning company delivering the service your clients demand?

Apartment block maintenance you can rely on.

Reliable

24 hour service

The Complete Cleaning & Maintenance Solution

Fully trained & insured staff A friendly, helpful & reliable service 25 years experience Highly competitive rates All equipent & materials supplied London & surronding areas

CALL NOW FOR A FREE NO OBLIGATION QUOTE :

0845 604 1288 www.thegolgroup.co.uk

Changing your Articles of Association to tackle nonpayment of service charges could be a dangerous tactic, says bruce maunder-Taylor

Who are the real

rOGues?

There are some blocks of flats run by resident-controlled management companies in which one leaseholder is claimed to be holding everybody else to ransom and who in turn claims victimisation by the Board of Directors.

To voluntary unpaid directors of a Residents’ Management Company (RMC) with no capital assets of its own, no profits to rely on, and only a self-balancing service charge account, any legal proceedings that result from this situation can be a nightmare - as they can be for the leaseholder who feels victimised. In a typical case of this kind, the RMC will issue County Court proceedings for recovery of whatever is owed; the matter will be referred to the LVT for a determination; the matter will return to the County Court (if not settled); and substantial costs - often running into tens of thousands of pounds - will have to be paid.

This does not only apply to recovery of service charges but also to alleged breaches of a lease and other litigation affecting residential block management.

In an attempt to tackle this problem and avoid litigation, there is now an emerging tendency for solicitors to advise RMCs to change the Articles of Association (the rules which govern the management of their company) to enable the RMC to collect money from the shareholders, either collectively or individually, if the directors decide to make a demand. The expectation is that if one resident, who is accused of being a ‘rogue’ leaseholder, puts the company to substantial cost, the Directors can legitimately demand those costs from that leaseholder as a shareholder or member of the Company and expect to recover them that way.

of Association of the Company. The Court determined that this is the case even if the sums being demanded are, effectively, service charges. In the case of Morshead Mansions, it is understood that a General Meeting of the Company is now held each year for the majority to vote on a budget necessary to manage the block of flats. No service charges are collected through the lease mechanism and all funds are collected through the Articles of Association from the shareholders of the Company (every lessee being a shareholder).

If anyone wishes to challenge the demand, it is not a service charge, therefore the leasehold legislation does not apply and the LVT has no jurisdiction.

There are also some RMCs which still collect service charges through the lease, but have varied the Articles of Association so that they

TesT case

Open TO abuse

The ability for a company to do this was tested all the way to the Court of Appeal in the case of Di Marco –v- Morshead Mansions Limited in 2008, when it was decided that whatever is payable by way of service charges through the lease is quite separate and distinct from what is payable through the Articles

Flat Living

Autumn 2011

These provisions in Articles of Association are open to abuse… can demand from a particular leaseholder, a group of leaseholders or all leaseholders, litigation or other costs, sometimes on a collective basis, sometimes on an individual basis. As far as is known, individual demands have not been tested in the Courts, but the threat of using such a provision in the Articles of Association is, frankly, frightening and tends to bring a rapid conclusion to the dispute.

The problem is that these provisions in Articles of Association are open to obvious abuse if used unfairly and threaten to put us back to where we were with rogue landlords before the Landlord and Tenant Act 1985 and subsequent legislation. This time, the leasehold sector could be faced not with rogue landlords, but

Is one leaseholder in your block holding the rest to ransom? with alleged rogue directors of RMCs. It is now not uncommon for RMCs to find themselves in a financially embarrassing position when dealing with a difficult leaseholder issue as they do not often have the financial resources to see the dispute all the way through. Lawyers with or without expert witnesses are expensive, and the litigation process is not only two layers (County Court and LVT), but now often includes mediation as well, imposed as a third layer. There are many ordinary people (leaseholders as well as directors of RMCs) who find this surprising and unacceptable. It means they start looking for alternatives.

Is cOmmOnhOld The answer?

It had been hoped that Commonhold tenure would help to resolve this matter as the Commonhold provisions effectively allow for the budget to be agreed by the Commonhold members at a General Meeting, by majority decision, and that decision is then enforceable.

However, to transfer from a freehold block of flats with each flat held on lease to Commonhold tenure requires unanimous agreement, which is rarely achievable. Unless and until Parliament changes the unanimity rule (for example, at present to vary all leases under S.37 of the 1987 Act requires 75% in favour and not more than 10% against), then Commonhold tenure is out of reach of most blocks of flats.

That leaves changing the Articles of Association of the Management Company in the way described above, and putting a lot of power in the hands of the directors who do not need to see majority decisions unless the Articles of Association also provide for that.

On the other hand, if one individual or a small group of leaseholders is putting everybody else to vast expense on what ought to be unnecessary litigation, what other choice is there? ● bruce maunder Taylor is senior partner of Maunder Taylor. Tel 020 8446 0011 Website www.maundertaylor.co.uk

57

SERvIcE chARgES

FREQUENTLY ASKED QUESTIONS What happens if the flat I want to buy has service charge arrears associated with it?

The previous owner is responsible for the arrears – they must be paid off prior to sale or included as an additional payment with the completion monies.

Why is my service charge so high? others in the block aren’t paying.

What can I do?

The Leasehold Valuation Tribunal (LVT) can determine whether you are liable to pay a service charge. Be sure to check your lease before applying – it may be that you are obliged to pay a greater share than your neighbours under your lease terms.

I can’t pay/won’t pay. What now?

You should never flatly refuse to pay your service charge. Try negotiating with your freeholder/management company. Failing that, apply to the LVT for determination of your liability to pay.

The money is not used in the way I would like. What can I do?

Your freeholder / management company is obliged to spend service charge monies on carrying out their obligations as described in your lease. It is not for a leaseholder to decide if the right decisions are being made. If you think a cost is not reasonably incurred, the LVT can determined whether the charge should have been paid.

Can the managing agent/ freeholder keep increasing service charges?

A service charge must reflect the true cost of providing the relevant service. If this is not the case, the LVT can determine whether the charge is payable.

We pay the service charge but the work is not done or done, but of a poor quality. What now?

Try to negotiate a reduction with the freeholder / management company.

If this fails, apply to the LVT for determination.

If there is a dispute between the managing agent or freeholder and one or more of the leaseholders, resulting in non-payment, how can we make sure that emergency works are carried out?

The obligation to carry out repairs and maintenance will be described in your lease and often exist exclusive of the leaseholder’s obligation to pay the service charge. The County Court can enforce the freeholder / management company’s obligations to carry out repairs or maintenance works.

Can we use a mediation service to resolve our problems?

Indeed. Mediation is a voluntary process whereby the participants seek to agree out-of-court how they are going to resolve their dispute.

It is often cheaper to enter into mediation than take a matter to court or tribunal.

We can’t agree on the right service charge level. What now?

Apply to the LVT for determination.

The management element of the service charge is too high. What can I do?

The LVT is also empowered to determine administration charges, such as management charges. An application to the LVT can result in a decision of the level of management charge you are liable to pay. ● Mediation is a voluntary process

Who writes the rulebook?

The RICS Service Charge Residential Management Code (the RICS Code) is the industry standard code of practice for anyone managing leasehold property in England, explains GeoRGIana hIbbeRd

The RICS Code is endorsed by the Government. All RICS and ARMA members must abide by the code and it is also followed by the Leasehold Valuation Tribunals when determining service charge cases.

Property managers governed by the RICS Code must know and work within the law.

They are expected to be familiar with the terms of leases for the properties they manage and will have client money protection. In addition they will ensure that service charge monies and reserve funds are held in a trust account and used only for appropriate purposes. They are expected to undertake regular inspections, ensure the property is adequately insured, and not to ignore arrears.

In all their dealings they should treat the parties fairly, ensure confidentiality and have a policy for dealing with disputes between occupiers.

The RICS also publishes Residential Property Standards (known as the Blue Book) which provides best practice guidance for estate and letting agents. A new edition is due to be published in October to include block management and will complement the Service Charge Residential Management Code. ● Georgiana hibberd is Associate Director Residential at RICS. Tel 0207 222 7000. Website www.rics.org Go to www.flat-living.co.uk/information-servicecharge-residential-management-code for a link to purchase a copy of the code

WhaT IS The RICS? The RICS is an independent organisation, acting in the public interest. It sets and regulates the highest standards of competence and integrity required of its members and provides impartial, authoritative advice on key issues for business, society and government.

58

Autumn 2011

Flat Living

A MERGER BETWEEN BIGWOOD AND CURRY & PARTNERS

When It Comes To Property Management We STILL Place Quality Above All Else.

Residential Management Services

cpbigwood.com

0121 233 7272

Regulated by RICS

The UK’ss cheapest – guaranteed!

Save money - or get ‘Double the Difference!’

The Utility Warehouse ‘Double the Difference’ Price Promise means you can benefit from: • The UK’s cheapest Home Phone • The UK’s cheapest Home Phone and Broadband bundle • The UK’s cheapest Mobile tariffs • The UK’s cheapest standard Gas and Electricity

chartered building surveyors

building… property… value…

experts in block management building surveying services Major works Defects diagnosis n Planned maintenance reports n Fire insurance valuations n Licences to alter n Party walls n

n

Want guaranteed savings? Join the Club!

Tel: 0800 131 3000 quoting reference G19964 Website: www.utilitywarehouse.org.uk/G19964

Charges, terms and conditions apply. For full details of the Utility Warehouse Price Promise see www.utilitywarehouse.co.uk.

email: enquiries@cardoemartin.co.uk web: www.cardoemartin.co.uk phone: 020 7563 8900 address: 95 Wigmore Street, London, W1U 1QW

End notes Flat Living

Company news Appointments Crossword Competition

61 61 62 62

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

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 eRmAs

JpC law take soliCitors’ awards Graham Jaffe, senior partner with JPC Law, was named Solicitor of the Year at the third annual Enfranchisement and Right to Manage Awards (ERMAs) organised by News on the Block earlier this year.

The annual awards, this year attended by more than 200 professionals, seek to recognise those firms and individuals who have excelled in this niche area of law.

Graham has a reputation in the field as the “Rottweiler of Choice” on account of his tenacity and belief that all eligible lessees should have the right to acquire a lease extension or share of freehold on a fair basis. The award recognises Graham’s success in completing a £13m enfranchisement in Grosvenor Square, leading a busy and expanding enfranchisement team and expAnsion

midlands firms merge Curry & Partners have announced they are merging with Bigwood to form CP Bigwood. The new partnership will have a turnover in the region of £8 million and a 125-strong staff, making it the largest independent practice in Birmingham.

Says Nigel Curry: “the services offered by the new practice will be completely complementary. Bigwood has a nationally acclaimed auction business and a strong professional services side – combiningthiswithourown speciality in residential and commercial management will create an all round partnership with excellence in reputation and technology in all departments”.

Flat Living

Autumn 2011

reflects the high regard in which he is held by fellow professionals in his field of expertise.

Katie Cohen, also a partner in JPC’s enfranchisement department, was highly commended in the Young Professional of the Year category.

According to the judging panel, Katie has demonstrated strength in business development solicitor of through her involvement the year, in the firm’s marketing Graham Jaffe committee and social media such as linkedin and online property forums, as well as a strong understanding of the area of leasehold enfranchisement and right to manage.

Katie and Graham are full members of ALEP (Association of Leasehold Enfranchisement Practitioners) and LEASE (Leasehold Advisory Service).

Acquisition

Chu aCquires residentsline

CHU Underwriting Agencies Pty Ltd (CHU), which are part of the QBE Insurance Group, announce that they have acquired Residentsline Limited.

CHU is Australia’s largest strata insurance (flats insurance) underwriting agency, established in 1979 and with more than 100,000 policies and offices throughout Australia.

In 1989 CHU extended its approach into the United States and more recently established an operation in the United Arab Emirates.

“Residentsline is our partner of choice in the UK due to Residentsline’s reputation for excellent service and long standing client relationships.

Residentsline and CHU are delighted to be able to set a new benchmark for innovative insurance solutions for the UK flats market, further details of which are being launched soon” explains CHU Managing Director, Paul Keating. “Our solutions will centre on making life easier for our policyholders by providing an unrivalled level of customer service”.

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

Appointments Chesterton humberts appoints new head of estate management Chesterton humberts has appointed a new Head of Estate Management, david goldberg, to strengthen its existing block management team and spearhead the expansion of the business into key London markets where it is not currently active.

David started his career in IT and project management, working for a number of large blue chip clients.

Using his expertise in IT systems and management procedures, he moved into property management in 2002, becoming a director at Crabtree property management, before going on to co-found preside, a residential block management company based in London W1, in 2009.

He comments: “As one of the leading estate agents in central London, Chesterton Humberts has the perfect foundation to provide clients in these areas with a high class estate management service and I look forward to working with my team to achieve this.” riChard orr lands key role at peverel sCotland Glasgow-based peverel scotland has appointed richard orr as a new Area Manager.

Richard, 28, assumes overall responsibility

for the strategic review of service, expenditure and budgets for around 50 developments in Glasgow and the West of Scotland. He has a wealth of property management experience having worked previously for redpath bruce and saltire, and has an RICS-accredited qualification in Real Estate Management. keith murray, Peverel Scotland Regional Director, said: “We are delighted to welcome Richard to Peverel Scotland. It is hugely encouraging that he shares our commitment to best practice and raising standards in the industry, and we look forward to drawing on his considerable expertise.” new md for pms leasehold management ltd liza reeves (previously Jary) has been appointed Managing Director of pms leasehold management ltd., pioneered in the 1980s by terry sutton, former Mayor of Colchester. Liza was brought in to bring about extensive changes and implement procedures to enable the company to become a mark of excellence in the property management industry.

Liza was previously a conveyancing executive in Colchester, and was inspired to take on this challenging role by her experiences during conveyancing transactions.

61

end notes CROSSWORD

Enter our crossword competition and you could win £50 worth of Marks & Spencer’s vouchers

competitioN

Try the fiendish Flat Living quiz, and try to work out what links the following, seemingly unconnected, groups. Answers at the bottom of the page.

WHAT LINKS 1 Margaret Thatcher, Gussie Fink

Nottle, Colin Dexter, Henry IV? 2 Terry Pratchett, Rembrandt , Sergei

DoWN 1 Become irate about compressed spring. (12) 2 Happy up the creek. (5) 3 Emmy duo in dance element. (9) 4 Gazes and grazes. (7) 5 Endures confused consumer. (3,4) 6 Lark around cattle enclosure. (5) 7 Devilish blood sucker for number 10’s new partner. (4,5) 10 Divorced man a dodgy leader. (5,7) 14 10 (and 7) does this to win vote or get the bird. (9) 16 Team panel used for determining who’s who. (9) 18 I leave dossiers lying on the street. (7) 19 Province cabal Bert and Ernie belonged to. (7) 22 Opts out of potencies for disturbed relative. (5) 24 Some religion is, lamentably, catching. (5)

seND your ANsWers to us at Flat Living, 2nd Floor, 16 Crucifix Lane, London SE1 3JW by 00 XXXXXX. The first correct answer will receive a £50 M&S voucher. Answers and the winner’s name will be posted on the website at www.flat-living.co.uk

LAST ISSue’S CROSSWORD WINNeR Joy Topperoff, Haverstock Hill, London

62

Sharleen Spiteri?

4 Barton-on Humber and Oakham?

5 Scott Engel, John Maus and Gary Leeds?

ANsWers to competitioN 1 Born in Lincolnshire; 2 Created works titled Nightwatch; 3 Texas. (Texas hold-em, born in, lead singer of); 4 The Viking Way; 5 Original names of “The Walker Brothers”

Across 1 Earth shattering innovation? (14) 8 Drama, pathos, revenge coming up within the page. (5) 9 Munitions without one regulation. (8) 11 Transatlantic flights spotted in pictures. (7) 12 Island cook is a cult. (2,5) 13 Controversial redeemer sounds grumpy. (5) 15 Surprisingly green site in Africa. (9) 17 Corrupt men, we said, work on NOTW and other titles. (4,5) 20 Pottery skills? (5) 21 Agrees, as sense dictates. (7) 23 Name calling? (7) 25 Retirement role for Major. (4,4) 26 French go the whole hog. (5) 27 Bush, Bush. (5,9)

Lukyanenko, Sarah Waters?

3 Flop, turn and river, George Bush,

Autumn 2011

Flat Living

Advertisement feature

Why waste heat? Improve your property heating for free With OFGEM predicting a doubling of fuel costs by the end of the decade, making cost efficiencies and reducing fuel bills are never far from our minds.

By reducing fuel costs you can also achieve carbon reductions, and property managers are pivotal to making this happen. The best way to start is through installing energy efficiency solutions.

Insulation for the private sector provides a chance to improve the energy efficiency of your housing that will appeal to your tenants by reducing their energy bills. You can also show leadership in this space through acting early and enjoying the prestige and positive media attention that comes with demonstrating a commitment to carbon reduction.

SmartHeat is a venture launched by carbon reduction company Sustain in 2005, which

provides free valve insulation for communal boiler rooms in housing.

Sustain, in conjunction with our utility partners and trusted installer base, brings an outstanding building insulation offering to the private sector. Along with free insulation of communal boiler rooms, we can offer a funded and project managed loft and cavity insulation programme suitable for both blocks of flats and stand alone housing stock.

We provide a free and no obligation quotation to landlords, that will include all costs and funding with no hidden fees or charges.

The installed cost includes the subsidy available from the major energy suppliers under the Carbon Emissions Reduction Target (CERT).

For more information, please contact Adrian Newton on +44 (0)1934 864 824 Email adrian.newton@sustain.co.uk www.sustain.co.uk

Cavity wall, loft and SmartHeat valve insulation for private residential buildings

Funding insulation for residential buildings proven — Recommended by the Carbon Trust, allows you to cut down on your tenants fuel bills and carbon emissions — Provided insulation for 7,500 blocks of flats around the country

“The installation process was handled efficiently and the final result is both neat and effective.”

Sustain is a leading carbon reduction company. We reduce carbon to build organisational resilience in our clients.

For more information, please contact Adrian Newton on +44 (0)1934 864 824 Email adrian.newton@sustain.co.uk www.sustain.co.uk

Theresa Anderson Property Manager, South Kensington Estate

why is it worthwhile?

— Improving insulation is simple — Will allow you to develop, execute and maintain carbon reduction plans — Maximise the efficiency of your buildings — Insulating a boiler room, cavity wall and loft can make genuine savings of hundreds if not thousands of pounds per annum — Cut fuel and energy costs

This thermal image shows the reduction in heat loss after SmartHeat insulation jacket is fitted

DUNSIN SURVEYORS CHARTERED SURVEYORS AND VALUERS

RESIDENTIAL AND COMMERCIAL PROPERTY SURVEY AND VALUATION SPECIALISTS � Valuation Reports � RICS HomeBuyer Service � Building Surveys � Property Defects Surveys � Lease Extensions � Lease Renewals � Rent Reviews � Commercial Valuations � Collective Enfranchisement � Leasehold Enfranchisement Valuations � Probate Valuations � Inheritance Tax Valuations � Charities Act Valuations � Matrimonial Valuations � Litigation Surveys and Valuations � Retrospective Valuations � Compulsory Purchase and Compensation � CPR 35 Compliant Expert Witness Reports � Building’s Insurance Reinstatement Cost Assessment � Surveyor Negligence Reports � Service Charge Disputes � Property Management Disputes � Independent Assessment of Service Charge Accounts � Landlord’s Consents � Repair, Maintenance and Improvement Advice � Development Appraisals

� Freehold Purchases � LVT Applications, Submissions and Representations � Capital Gains Tax Valuations � Stamp Duty Land Tax Valuations � Licenses for Alterations � Schedules of Condition � Schedules of Dilapidation � Party Wall Procedures and Awards � Mixed Use Valuations � Negotiations on behalf of tenants, leaseholders, occupiers, landlords, freeholders, agents, etc. � Business Rates � Project Managers � Stock Condition Surveys

020 7233 6762 Fax: 020 7233 6785

www.dunsinsurveyors.co.uk info@dunsinsurveyors.co.uk Regulated by RICS