Issue 108 of News on the Block has now been published. This issue includes a special Enfranchisement & Right to Manage feature.
Court ruling ignites hope for landlords A landmark ruling offers welcome news but landlords should still exercise common sense
£4.50 Issue 108 / 2020 The Magazine for Apartment Building Management Enfranchisement & Right to Manage
Special edition
Enfranchisement in a post-Covid world
contents ISSUE 108 news 5 Radical plans to shake-up
Enfranc &
leaseholds unveiled The Law Commision has propsed reforms allowing flats to be sold with freehold 5 Property sector lends support to Pride month Funds to safely house LGBTQ+ young people 7 Leasehold Group mourns sudden death of MD Louie Burns Staff at the Leasehold Group are devastated after their managing director died 9 Appeal court rules in favour of landlords in S21 case A landmark ruling means tenants can be evicted via section 21 notices even where gas safety certificates were not provided inresidence 11 Appointments The latest moves in the property sector.
24 Sign of the times! Tenants who use
electronic signatures do so at their own risk until clear procedure is agreed, argues Howard Lederman
25 Collective enfranchisement v right to manage Choosing the best process depends on what you'd like to achieve 27 Appointing a manager to take over a RTM Rawdon Crozier and IbraheemDulmeer explain the steps needed
17 Enfranchisement in a post-Covid world Louise Uphill examines the practicalities and challenges of valuations and legal practices in the wake of coronavirus 19 A question of proportion! Katie Edwards considers the issues around calculating whether a mixed-use property qualifies for right to manage 21 Is commonhold or leasehold better? Mari Knowles looks at a debate that has been bubbling away for years
13 Don’t leave RCAs to chance
Property managers often find that reinstatement cost assessments can fall to the bottom of their ‘to do’ list
inbox 14 Questions and Call of the month! Readers ask the experts
23 Lessons in student housing & leaseholder rights The are
issues that can arise with student accommodation
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@newsontheblock News on the Block
News on the Block is the leading independent magazine providing help and advice to flat owners, landlords, managing agents and their professional advisors. www.newsontheblock.com SMS US: 0786 002 1858
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chisement RTM
inpractice
29 Enfranchisement: What’s it all about? The rights available to leaseholders of flats and houses 30 Costs recovery for
33 How do we split the bill for EV
charging? The electric vehicle
‘excluded units’ Right to mange
inassociation 37 Free online training for IRPM members launched Property managers can access a new library of information to help develop their skills landlords A landmark ruling offers welcome news but landlords should still exercise common sense revolution is unstoppable but some older charge points are already obsolete 35 Court ruling ignites hope for
companies need to be aware of an important statutory right 31 The benefits of lease
extensions by private treaty Negative press has detracted from the positives of such lease extensions
28 What’s in a name when it’s a flat? Roger Hardwick considers a technical explanation that has plagued the industry for years
directory 38 Help at hand A selection of companies offering help to leaseholders
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news
Radical plans to shake-up leaseholds unveiled
R adical reforms allowing flats to be sold with freehold title (as part of a commonhold) have been proposed by the Law Commission. A raft of changes have been suggested after a two-year probe into leaseholds. The investigation followed furore around the sale of houses on estates with leaseholds which had ground rents that were due to double every 10 years. Thousands of families say they are stuck in homes that are virtually impossible to sell due to the leaseholds. The Law Commission proposals, if made law, would make it easier for leaseholders to buy their freehold, extend their lease or eliminate ground rents. Property sector lends support to Pride month
is limited to just those who completed the survey,” says Will Martin, founding member of UKCAG. One of those who responded said: “I feel hopeless. I feel as a mother I cannot provide a safe home for my child or be a good parent.” Another wrote: “I struggle each day to keep myself alive due to the financial worries of ending up homeless and bankrupt.” Eight out of 10 survey respondents say that their relationships with friends and family had been affected, and 28 per cent say their relationship with their partner had become strained. recommended a new right for leaseholders with very long leases to 'buy out' the ground rent under their lease without also having to extend the length of their lease. Professor Nick Hopkins, commissioner for property law, said: “The leasehold system is not working for millions of homeowners in England and Wales. We have heard how the current law leaves them feeling like they don't truly own their home. “Our reforms will make a real difference by giving leaseholders greater control over their homes, offering a cheaper and easier route out of leasehold, and establishing commonhold as the preferred alternative system.”
The Law Commission’s proposals go further by suggesting that existing leaseholders should have the right to a lease extension for a term of 990 years. Currently, the law only allows extensions are only available for 90 or 50 year. It recommended there should be no ongoing ground rent under this extended lease, and landlords should not be able to use the lease extension process to impose new obligations. This would put an end to the onerous ground rents that many leaseholders have to pay while at the same time making it much easier for homeowners to sell these properties. The Law Commission also
One proposal would give homeowners the right to extend their lease for nearly 1,000 years while at the same time removing any obligation to pay rent to the freeholder. The proposals come in response to a scandal that has seen thousands of homeowners facing inflating ground rents and fees by developers and investment firms. Rules to ban the sale of houses with leaseholds and also outlaw developers from selling leases containing obligations to pay for ground rent were announced last year But they have yet to be brought into effect and they didn’t affect those homeowners who already had houses with leaseholds.
People in homes with cladding face mental strain
N ine out of 10 people who live in flats with cladding say their mental health has suffered since the Grenfell Tower blaze. A study has found that almost a quarter of those surveyed say they have had suicidal feelings. Anxiety about safety and the cost of removing cladding was cited as being the main worry.
UK Cladding Action Group (UKCAG) carried out the study, which found that 90 percent of people said their mental health had deteriorated as a direct result of the cladding issue. Residents are calling on the government to take immediate action to address the situation. “Given the sheer number of unsafe buildings, it is inconceivable the problem
P roperty professionals who set up a portal to help disadvantaged people the early days of the coronavirus crisis have raised funds to safely house LGBTQ+ young people. The people behind Do Some Good supported Pride month in June by supporting AKT, a charity that supports LGBTQ+ people aged 16 to 25 find a safe place to live. It reaches out to those who need help finding a safe home are those who are or are facing homelessness or are living in a hostile environment. Since the outbreak of Covid-19, AKT has seen an increase in cases due to young people being confined and forcibly being outed to families and guardians who disapprove of an individual’s sexuality. Andrew Deverell-Smith, founder and chief executive of deverellsmith, which is a partner of Do Some Good, said: “The property industry must come together to support the LGBTQ+ community and we’re proud that Do Some Good is pledging to support these young people during these difficult times.”
Lockdown leads to big rise in high-speed broadband sales
T he coronavirus lockdown has led to a 99 per cent increase in sales of high- speed broadband, a study has found. Research by MoneySuperMarket found that sales data revealed that purchases of the highest speeds
found. Emma Spencer, senior channel manager at MoneySuperMarket, said: “Lockdown has had an impact on various aspects of our lives, with many of us now relying on a strong, stable internet connection in order to work from home.”
(61+ Mbs) saw a spike after the government advised working from home where possible. High-speed broadband sales nearly doubled in the first three weeks from when Covid-19 social distancing and lockdown measures were implemented, the price comparison website
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£14m flats development completed despite Covid
Man dies in ‘tragic’ block blaze A man died in a ‘tragic accident’ during a massive blaze at a block of flats. Firefighters were called to the burning building in Epping, Essex, where a fire had started in a top- floor apartment. Fire investigator Mark Earwicker said: “We believe this was a tragic accident. We have recorded the cause as accidental but because of the extent of fire damage in the flat, it’s difficult to determine exactly how the fire started.”
D eveloper Urban Village Capital has completed on a £14m apartment complex despite facing issues due to lockdown. The Birmingham-based company signed off on Knight’s House, a nine-floor former office block in Sutton Coldfield. Featuring 63 apartments, including 12 penthouses, the development adds to Urban Village Capital’s growing portfolio of build-to-rent developments. Having announced practical completion in November,
buildings and turning them into desirable living spaces, which is aiding the UK government's push for 300,000 new homes every year. Urban Village Capital chief executive Nick Sellman said: "Knight's House is a stunning addition to the Birmingham residential rental market. "The final couple of months of the development did pose one or two challenges, but nothing that we haven't been able to overcome to add this development to our growing list of properties.”
Urban Village Group has had to negotiate the issues posed by the COVID-19 lockdown before being able to open up the rental market. While the finishing touches were completed to the property during the lockdown, Urban Village Group offered two- months rent-free accommodation to NHS workers serving in Birmingham's hospitals during the height of the COVID-19 crisis. Urban Village Group is pioneering the conversion of unloved former commercial
Leasehold Group mourning the sudden death of MD Louie Burns
T he Leasehold Group was Director, colleague and friend Louie Burns in the early hours of Sunday 21 June 2020. Louie, who joined Leasehold Solutions in 2009, was passionate about fighting the injustices of leasehold. He steered the company’s crusade for changes to the system and, continuing the legacy of the late Alex Greenslade, actively devastated to hear about the sudden death of its Managing campaigned to empower and level the playing field for leaseholders, often against vociferous opposition. Louie, like Alex, believed it was the
condolences go to his wife Di, his sons and his family at this tragic time. A larger than life character, Louie filled every room he entered, and he was admired by supporters and opponents because of his huge personality, his affability, goodness, and his support for many charities. We know that Louie would not want us to rest on our laurels so we will continue to fight the good fight and work tirelessly, as we always have, to secure the fairest outcomes for leaseholders. We have lost a true friend, a colleague and an inspiration and he will be greatly missed by us all.”
right thing to do and it was a passion he helped to instil in the whole team. Louie was much more than a dedicated campaigner. As Managing Director, he was an inspirational leader, an engaging public speaker and he made it his mission to educate owners of leasehold flats and houses about the issues of this form of property tenure via roadshows and, latterly, masterclasses and podcasts. Anna Bailey, CEO of The Leasehold Group, said: “The directors of the Leasehold Group, my colleagues and I cannot quite believe that Louie is gone, and our
House builder steps up to the plate
H ouse builder David to help those struggling to feed themselves during the coronavirus crisis. The company donated a range of items to Basingstoke Foodbank, which is part of the Wilson Homes Southern stepped up to the plate
necessary stocks to respond to this crisis. “The support of David Wilson Homes means food banks will be able to remain agile to respond to the fast-changing situation and continue to provide the lifeline of emergency food and additional support for people in crisis.”
meals for those in need. Samantha Stapley, chief
Trussel Trust. Groceries, including food and toiletries, were given to help those in need during the challenging lockdown. After being weighed by the volunteers at the food bank, the total of items donated came to 28.36kg, which is equivalent to 68
operating officer at the Trussell Trust, said: “As the coronavirus outbreak developed, more people needed a food bank help. Our teams worked tirelessly to ensure that food banks were able to remain open and have the
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Specialist not standard
Blocks of Flats Insurance
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FP737-2018
news
Appeal court rules in favour of landlords in S21 case
ALEP celebrates 13th year of operation T he Association of Leasehold Enfranchisement Practitioners (ALEP) is celebrating after reaching its 13th year of operation. ALEP was founded by Anna Bailey and her brother, the late Alex Greenslade, in 2007. It is the professional body for practitioners experienced in the residential leasehold sector. The organisation was launched to ensure that practitioners involved in this sector adhere to an agreed level of conduct and service Anna said: “I am very proud of how far ALEP has come since my brother, Alex Greenslade, and I launched it in 2007. It is now an award-winning association with more than 260 members – four of which have joined during lockdown. It’s a fantastic achievement by my ALEP colleagues and all our members over the years who have contributed to its growth. “Moreover, how we’ve adapted and developed over the last few challenging months is true testament to the ALEP team and indeed our members.”
T enants can be evicted via section 21 notices even where gas safety certificates were not provided at the start of the tenancy agreement, the Court of Appeal has ruled. The court overturned a previous ruling that a landlord’s section 21 order was invalid if it had failed to provide a gas safety certificate before the tenant moved into their property. In the case of Trecarrell House Limited v Rouncefield, the court ruled there is no time limit for serving existing tenants with a certificate. It also ruled that as long as one is provided to the tenant prior to a section 21 notice, the notice will G overnment proposals to allow additional floors to be built on blocks of flats without planning permission have been given a cautious welcome. Housing secretary Robert Jenrick announced earlier this year that property owners would be allow to add up to two storeys to blocks from this summer. Building upwards currently requires planning consent, which includes checks on howwell designs fit with nearby homes. Critics fear the move could result in a new generation of sub-standard homes and could raise tensions
be valid. Defendant Patricia Rouncefield was given a tenancy by Trecarrell House in February 2017 but did not receive a relevant gas safety certificate until November 2017. She later received a section 21 notice on 1 May 2018 and appealed this arguing that by failing to provide a GSR before she moved in, the landlord could not issue the notice. A deputy district judge initially dismissed this defence and granted the possession order before Ms Rouncefield appealed and another judge ruled in her favour. The Court of Appeal then granted Trecarrell House permission to appeal. Following the hearing, a majority ruled in favour of the landlord.
Liam Hale, an associate at the property law firmWinckworth Sherwood, said the ruling would be a relief to landlords. He added: “This decision is an important victory for landlords and demonstrates a common-sense approach by the Court of Appeal. The courts had previously held that if a landlord failed to provide a gas safety certificate before the tenant took up occupation of the property a section 21 notice could never be served, meaning a tenant effectively had the right to remain in a property for as long as they wished provided there were no other breaches.” Court ruling ignites hope for landlords – See Page 35
Cautious welcome to extend flats without planning consent
rights could have a positive impact in transforming the skyline of residential areas while meeting the current unprecedented demand for housing. But he added: “While the intention of the scheme is to provide more housing, there are some concerns that the control of the quality of stock might be affected, and there are many questions it raises for existing lease holders. “If this new scheme is done properly, without any substandard construction and taking existing leaseholders and communities’ views into consideration, it could be a win-win.”
between neighbours Directors at residential estate management company Principle Estate Management have cautiously welcomed the decision. Joe Jobson, a director of Birmingham-based Principle, said estimates showed that up to 345,000 new homes each year are needed in England. He explained: “We are cautiously enthusiastic about these changes as another method of helping to solve the housing crisis, certainly on brownfield as opposed to greenfield sites.” Mr Jobson said that the new
ARMA backs report on fire-risk buildings
A damning report revealing that Grenfell has been welcomed by a leading industry body. The Association of Residential Managing Agents (ARMA) applauded the findings of the Housing, Communities and Local Government Committee Report, entitled Cladding: 2,000 buildings are still covered in dangerous cladding three years after
said: “It is vital that adequate funds are provided so that all buildings deemed a high fire risk, regardless of height or material, are remediated as quickly as possible, with arguments about who is at fault and who should pay being addressed separately. The report outlined a number of interesting ways in which this could be achieved but getting people safe must be the first priority.”
Progress of Remediation. ARMA responded after the report highlighted the scale of the problem, where thousands of people still live in blocks with unsafe cladding. It also pointed to the unfairness facing leaseholders who are being asked to pay for cladding-related costs, such as fire alarms and waking watches is made clear for all to see. Dr Nigel Glen, ARMA’s chief executive,
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appointments
Property manager boosts senior team
R esidential property manager FirstPort has boosted its senior team with two appointments. The Hampshire-based company has appointed David Young as chief operating officer and Michael Venus has become director of HR. They will both sit on the executive board. Mr Young, who joins from energy firm Centrica, has 14 years of senior leadership experience. He led strategic change in the business during
joins FirstPort from construction giant Multiplex. FirstPort chief executive Nigel Howell said: “David and Michael join us at an important time as
his time at the company, including its subsidiary British Gas. He will lead FirstPort’s ongoing implementation
M anaging agent Rendall & Rittner has appointed a new key client manager to focus on overseeing on the firm’s largest freehold clients. Charlie Crawley brings extensive experience of the sector and has joined the company fromWarwick Estates, where she headed up freehold client relations. She will be the dedicated point of contact for Rendall & Rittner’s clients, focusing on developing relationships and enhancing levels of service. “Rendall & Rittner is a strong business with a first-class client portfolio,” said Charlie. “My role will be to ensure that the key freehold clients consistently receive the very best levels of service.” Richard Daver, managing director of Rendall & Rittner, said: “We are pleased to welcome Charlie to the business. She has strong experience of the sector as well as established relationships with some of our key clients.” Key client manager takes on role
we look to expand our offer, move into new areas of the market and continue to support brilliant places for people to live. With their joint experience in expanding businesses, they both have a huge role to play in our growth and change programme.”
of the firm’s digital programme, which is pat of a five-year plan to improve customer service and business growth. Mr Venus will bring a wealth of experience to his new role as HR director after years of experience in HR across construction and media. He
Firm creates role to help with growth
A property
the lockdown rules being relaxed, so the timing of Tony joining is perfect. We have had to review our methods of operating to ensure safety and are comfortable with the arrangements we have made.” Mr Rozario has been a property clerk since 2007, working for snventory companies in London including Red Inventory, where he trained other clerks. He also worked for Galliard Homes, where he managed a newly-formed inventory department.
Matt Hill, senior property inspector at Principle, said: “We’re delighted to have appointed Tony to our expanding team as he has the in-depth knowledge that we need.
management firm has created a new
role as its portfolio grows to more than 200 units. Birmingham-based
Principle Estate Management has appointed Tony Rozario as property inspector to help it deal with growing demand. Mr Rozario has more than 13 years of experience in the sector in London and the South East, which is where the company is seeing a large increase in business. A building consultancy firmhas appointed an associate director to help lead the firm’s dilapidations and project management services. Building surveyor Joseph Skinnard has joined Mobius Building
“Principle’s fast-growing portfolio in the South East meant we needed someone on the spot for us, and Tony’s location means we have the right skills and focus in the right place. “We have just reinstated property inspections following
Building consultancy firm appoints associate director
Mr Strange added: “Joe is an outstanding chartered building surveyor and brings genuine experience and professionalism to Mobius Building Consultancy. We very much look forward to him forming an integral part of the team and a catalyst to the success and growth of our business.”
Mr Skinnard has a substantial range of knowledge across project and professional work, including contract administration, project management, pre-acquisition surveys and insurance claims. He also benefits from insight on the impact of the MEES regulations on commercial leasehold property.
Consultancy from the commercial team at Lambert Smith Hampton. Mobius Building Consultancy’s director Ben Strange said that the company had Mr Skinnard in its sights for some time due to his experience in dilapidations.
11 ISSUE 108
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You know what it’s worth, we know what it costs.
RCAs, Insurance Valuations, Buildings Insurance Surveys. Whatever you call them… we do them properly. From £100k to £100m. From rural farmsteads in Cumbria to condominiums in Canary Wharf. From individual blocks on their own, to whole portfolio instructions. We’re independent, nationwide and dedicated to valuing your interests. Call EK RCAs for a full elemental cost analysis at a competitive fee.
Chartered Building Surveyors Call us on 020 3667 1510
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Don’t leave RCAs to chance
R e-reading our white paper on the treatment of VAT when conducting a reinstatement cost assessment reminded me that property owners and managers rely heavily on the technical acumen of the reinstatement cost assessment (RCA) practitioner. As a RCA expert, I am thrilled to be relied upon and it is nice to be in a position to impart some of my technical knowledge to PMs through webinars or simply chatting through RCA matters on Zoom. In 2019, EK RCA was launched as a separate business from Earl Kendrick Building Surveyors. This gave me the opportunity to approach RCAs from a different perspective: a more hand-holding proposition while drawing on EK’s decade or so conducting RCAs for managing agents and landlords. Now that our business is a little over one year old, it’s a good time to reflect on how that difference has manifested itself.
Do the plan Central to getting on top of a portfolio of RCAs is to plan and consolidate. Gather the data (DVs and when the previous RCA was done) and hand that to a RCA surveyor. They will give you a competitive fee quote to assess your whole portfolio. Do this across ALL portfolios in your company and you’ll achieve even better economies of scale, consistency of approach, and, most importantly, you’ll be achieving peace of mind knowing there is an actionable plan. Actioning the plan The moment you have a comprehensive list of RCAs to be carried out, you have begun to mitigate the risks of under- insurance. Instruct the surveyor to visit your properties and make common parts access Property managers are busy and reinstatement cost assessments can fall to the bottom of their ‘to do’ list. Calling in an expert is the answer, states James Paul
arrangement easy for the surveyor… access to one or two of the flats would be ideal too. Once the RCAs are done So far, if we are selected, we will have helped you to compile a comprehensive list of your properties, assigned (discounted) fees and dates for surveys, and the surveys methodically and consistently conducted. If you are working with us portfolio- wide, you will benefit from your plan being turned into a tracker. This tracker will ensure every RCA carried out is recorded and the new declared value showing an increase or decrease, plus the percentage change. It will also show the date when the client and broker were informed of the new DV. As we are doing the RCAs, we will update the tracker so you don’t have to. There is a lot of data to track so why not delegate it to us? Delegation is the key Trust in your RCA provider and delegate to them. You remain in control yet you have an RCA practitioner dedicated to you to keep you compliant. Why deal with ad hoc RCAs when you can get a grip on the whole portfolio in one fell swoop?
Overcoming the obstacles Property managers are busy. As a consequence, they are constantly
prioritising and reprioritising. Too often, the essential periodic assessments don’t get done or at least they get done on an ad hoc basis. The reinstatement cost assessment is a classic example of an essential task put to one side. The importance of doing RCAs is rarely questioned once understood, not least as an under-insured building may have devastating consequences in the event of a claim. If a building is insured for a rebuild cost (declared value) of £5million but the real cost of rebuilding is £10million, any claim pay-out will only be 50 per cent, leaving the leaseholders to fund the shortfall. So assuming the importance of RCAs is not in question, why are they so often shoved to the bottom of the in-tray? Are PMs relying on buildings staying claim free or afraid of the extra admin or even broaching the subject with their clients? I understand PMs’ worries and reservations. Many – especially those new to the industry – are unaware of just how vital RCAs are, and they are left to discover that for themselves (through one of our webinars perhaps).
James Paul is a director at EK RCA
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QUESTION I write to ask for guidance on how to proceed with a problem relating to the Covid-19 precautions in my residential blocks of flats in Dorset, and in particular the use of lifts. I complained to the managing agents that as a leaseholder in occupation, mine and my wife’s safe distance was being compromised when we use the lifts to enter and leave the building. My wife is on the shielding list which has been recently relaxed, allowing her to leave the building. I requested that the managing agent post a sign at the entrance to the lifts and at the main foyer pedestrian entrance to the effect that use of the lifts is limited to one person or bubble. The lifts are small and social distance, even at one metre, is impossible. The reply I received was beggars belief. The cost of putting down a sticker on the floor in front of the lift entrance and a laminated notice at the lift entrance is minimal. The reply to the effect that they hoped residents were able to communicate in a proper manner is equally flawed. Communication with other leaseholder occupiers is not a problem but the same cannot
According to the latest Guidance on Covid-19, issued by the Ministry of Housing, Communities & Local Government: “Tenants have a right to a decent, warm and safe place to live. Where safe to do so, it is in the best interests of both tenants and landlords to ensure that properties are well maintained, kept in good repair and free from hazards.” The communal area of a block is officially known as a workplace under health and safety regulations and needs to adhere to coronavirus measures, just as you would expect any place of work to be. This means that the managing agent should have carried out a risk assessment to determine what was required to keep residents and visitors safe. It’s worth investigating whether this has been done or request a copy. Also, speak to the concierge to see if they have been briefed on informing visitors of lift restrictions, if not let the property
be said for rental tenants or visitors, particularly the young, not to mention tradesmen. The problem is made worse by the fact that the building is not secure and the door entry phone is not working correctly ,so people can enter without speaking to a resident. I understand that the managing agent cannot police the building but I do not understand why they refuse to post signage to assist the vulnerable residents in keeping themselves safe. The development also has a concierge/security office and CCTV . Do you have any information or guidance which could help? ANSWER You have a very valid point. You and all other residents in the building should have been informed in advance of precautionary measures in order to keep everyone safe, and cost should not be the issue when it comes to health and safety. The cost to produce notices, posters and signage is negligible — even better, they can be produced and printed in-house! There are also plenty of government sites where you can download Covid-19 posters and signage for free, so there is no excuse really. But it sounds as if communication is not the only issue, the door entry system needs to be repaired as well.
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manager or client know. If the property manager is not being helpful, or not
responding satisfactorily to a complaint, I would recommend you speak to the client, who may be a freeholder or resident management company. The property manager will be able to provide contact details. Jennifer Holmes is group head of marketing at Fexco Property Services Limited
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QUESTION I am director of a leasehold property of 44 flats in Putney London. We are managed by a large, local management agent. Recently my fellow Director and I discovered that the previous building manager made payments to contractors without informing the directors. He also arranged an insurance claim from our block policy for an extraordinary amount for a leakage into another flat. He paid the excess from our funds, once again without informing the directors. The manager left the company in February this year, and we have made several complaints and demands for a full investigation into his conduct while he was managing the property.
to deal with insurance claims and instruct works without additional authority. You could also investigate whether or not the decisions made by the managing agents were reasonable and look into taking action for negligence, however this will be completely dependent on the facts and the actions taken. Finally, this appears to be a task for a solicitor dealing with a breach of contract or possible action in negligence. Alternatively you could complain to the property ombudsman or ARMA and highlight to them the issues in light of you being ignored by your previous managing agents. If you would like some more detailed advice then please feel free to contact LMP Law Ltd to discuss.
to our grievances to date, the new manager just keeps repeating she is looking into the matter. They have not acknowledged emails in regards to our grievances which breaks their own rules. They are a member of ARMA so any grievances would have to go through them. Can you offer any advice? ANSWER Many thanks for your query relating to your previous managing agent. I am sorry to hear about the issues that you are having, obviously I have a limited amount of information to hand, but speaking generally I will make the following observations. You need to check the terms of your management agreement with the previous agents, was there a specific clause within the agreement that meant that the agent was required to inform the
board of directors for expenditure?
Often when a managing agent is instructed the board of directors want to leave it to them as the professional agents to simply get on and manage the development. It hoped that the managing agents will act in line with their agreement and have the best interests of their clients when arranging for works and contracts etc. Likewise, where there is a hands on board of directors, they may leave standing instructions with the managing agent to run items of expenditure over a certain amount past the board before being authorised to proceed. With regards to your situation whether or not action can be taken will be down to the terms of the managing agreement as per the above, if the agreement afforded the managing agent a wide discretion then it will not be uncommon for the managing agent
Peter Cornell, Director at LMP Law
We have not received any reply
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O ver the course of a recent long weekend, there were several Teams chats (other software is available) that referred to one large site and what sounded like a much younger caller than we are used to. The calls were all perfectly pleasant and each time a routine question regarding ordering new fobs or confirmation of concierge hours for example was asked. No individual staff member took more than one call but toward the end of the three days it had been
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remarked upon several times. Two days later we received an email via our client from a resident who apologised on behalf of his 13-year-old son, who had made 20 plus calls over a week, both in and out of hours, to the managing agent in order to “test” response times for a school project about customer service!
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& RTM Enfranchisement
Enfranchisement in a post-Covid world
W hen Covid-19 hit, businesses had to react quickly and, for professional outfits, that meant most of its workforce had to work from home. On the whole, offices were closed, the postal system became unreliable and physical valuations could no longer be undertaken. How on earth were enfranchisement transactions, where hard copy notices needed to be served, going to be handled? Fast forward to July 2020 and whilst our hair may be a little longer than usual, lockdown has been eased and, as a profession we are, in the main, still here and still getting those deals done. Just how has the enfranchisement industry adjusted to this brave new world and more importantly, can it last? Under the 1993 Act, all notices must be “given” by being served on the intended party in writing and by post. The case of Cowthorpe Road 1 – 1A Freehold Ltd v Wahedally [2017] L. & T.R.4, states that because a notice must be sent by post under section 99(1) of the 1993 Act, it can be inferred that a hard copy must be received. Indeed, his Honour Judge Dight further concluded that sending notices by email would only amount to being a copy of that notice and so the original could not be served by email. How could this be achieved whilst offices were closed? Luckily for practitioners, on 30 March ALEP launched its Protocol for Service of Initial Notices and Counter Notices. While the protocol was not
an original being received, at least until the law is changed to catch up with modern practices. The protocol also provided practitioners with the option to request an extension of time for serving counter notice to recognise the difficulties that landlord’s surveyors faced in accessing properties for the purpose of preparing valuations. The RICS issued guidance to its members on 15 May which encouraged the use of remote valuations to provide advice on premiums for initial and counter notices. For more complicated matters, and where desktop valuations were not suitable, the guidance recommended social distancing measures to enable full site valuations to take place, homeowner allowing. In some cases, caveats were put on reports where access was not available. The issues highlighted above are just some of the problems faced by practitioners and what is certain is that never before have we been faced with so many challenges to overcome. It has been empowering but it has also been hard work. I hope that, with ALEPs continued guidance, the industry continues to evolve and changes to the law are effected to enable valid service and signing of enfranchisement documents electronically. The post Covid-19 world changes on a daily basis so watch this space on how the enfranchisement world keeps up.
Louise Uphill examines the practicalities and challenges of valuations and legal practices in the wake of coronavirus
also be successfully adopted for other enfranchisement notices such as right of first refusal, deduction of title and statutory deposit notices to name a few. In following the protocol, practitioners must ensure that the protocol can be adopted with their counterpart and that the recipient provides direct authority to accept service by email. Most practitioners I have dealt with have also required the hard copy original of the electronically served notice to be sent to them by ordinary post. While this was not prescribed by the protocol it is good practice to circumvent the issue of
mandatory, ALEP encouraged its members — including Dutton Gregory Solicitors — to adopt the protocol where possible, to enable transactions to proceed. This protocol was and still is very helpful in allowing practitioners get transactions over the line. It applies to initial notices and counter notices under the 1993 Act but it can
Louise Uphill is a senior associate solicitor at Dutton Gregory Solicitors
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Enfranchisement & RTM
A question of proportion!
be included within the non- residential calculation.
Problem areas It is appreciated that
difficulty can arise where a commercial unit is used fully or partly as a dwelling. For example, a caretaker’s flat has been confirmed to be a unit that is residential and a common part (Panagopoulos v Cadogan [2010] EWCA Civ 1259). Further, the use of live/work units causes an issue in the calculations. This is very much debatable. Are specific parts provided for living and provided for work within the lease plans? If there are, then the calculation may be easier, but, the lines may become blurred where there is not a distinction between a living and working area. In KW RTM Co Ltd v Lemonland (Kings Wharf) Ltd, the mezzanine contained live/ work units and the residential parts of the mezzanine were included within the calculation for residential parts. In addition to the points above, the functions of other parts within a building may need to be clarified with further information to assess whether these could potentially be classified as residential: • Business centres, common rooms, games rooms. • Gyms and laundry rooms. • Any rooms used by staff to carry out ad-hoc services for the benefit of the residents. If this is on an ad-hoc only basis it is unlikely to be a common part. Aa cleaning cupboard used on a regular basis is likely to be a common part. In summary, there is no “one size fits all” answer. Where there is a mixed-use building, in respect of determining whether the exclusion applies to a claim for the right to manage, detailed calculations will be required and advice should be sought.
O btaining the right to manage via the Commonhold and Leasehold Reform Act 2002 (“CLRA”) requires the premises to have several characteristics to qualify for such management. CLRA provides that certain premises are excluded: this includes mixed-use premises where more than 25% of the internal floor area is considered non-residential. The calculation as to whether 25% is non- residential is not necessarily straightforward. The building In respect of the calculation of residential and non-residential parts, the common areas will be excluded from the calculations. A part of the building will be non-residential if it isn’t occupied nor intended to be occupied for residential purposes. Various examples of case law have explored what areas of a building form common, residential and non-residential parts. Therefore, an analysis in respect of a building comprising of mixed use will need assessment of each individual area. It should also be noted that an un-demised part cannot automatically be regarded as a common part; for example, the area may form part of the landlord’s retained property and therefore be a non-residential area to be contained within the calculations. Residential The following will be considered to be residential in nature: • The individual flats which have
Katie Edwards considers the issues around calculating whether a mixed-use property qualifies for the right to manage and the distinctions between living and working areas
Non-residential A part of a building is non- residential if it is not demised for residential purposes, not intended to be used for occupation and not a common part. The following would be considered non-residential: • Commercial units • Storage areas or parking spaces that are not allocated to a demised residential area • Un-demised parts of the building which are retained by the landlord but are not a common part, ie some un- demised parts of the building are used for storage. • A mezzanine floor used for non-residential purposes would potentially be considered a non-residential area if there has been an installation within the commercial part of a building. It could therefore be surmised that the non-residential parts of a mezzanine floor that are commercial would
been demised to leaseholders. • Bedsits and studio flats to which ample living accommodation is provided to be considered as a separate dwelling. See Q Studios (Stoke) RTM Co Ltd v Premier Grounds Rents No 6 Ltd and another [2020] UKUT 197 (LC) . Any parts of the building which are used (or intended to be used) in conjunction with a dwelling will be included within the residential areas. This would include a garage, parking space or storage area linked with a flat. An analysis of the leases will be required. Common parts Common parts are generally excluded from the calculation and include the following areas: • Staircases, hallways, passageways, lifts and shafts. This includes common parts in commercial areas. • Corridors, passageways, staircases leading to lift motor rooms, boilers, water tanks, etc as these amount to a common facility.
Katie Edwards is an associate at J B Leitch Ltd
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