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

Account advice needed

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

F lat L iv ing

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 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 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.

Get in touch with your property manager

Lee Middleburgh Group Managing Director Peverel Property Management

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 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 (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 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

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