Issue 105 of News on the Block includes a special insurance feature.
Who looks after your fire alarm system? Page 15 £4.50 Issue 105 / 2020 The Magazine For Apartment Living Insurance Special edition
10
TOP tips
10
reasons to review your insurance in 2020
contents ISSUE 105 news 5 Grenfell charges delays
indepth
19 Safely ‘under cover’? Phil Parkinson and Katie Edwards look at the challenges surrounding insurance against terrorism 21 10 reasons to review your
frustrating, say families There may be no charges made over the Grenfell tragedy until 2025 7 Property management firm's boost for RTM Rendall & Rittner expands its Right to Manage offering 9 Green light for £1bn docklands project An East London regeneration project will provide 1,500 apartments after plans were approved
insurance in 2020 The start of the year is a good time to check your insurance
10 TOP tips
Facilities firm adds heating division
11 Appointments The latest
appointments in the industry inresidence
inbox 16 Questions and Call of the month! Readers ask the experts
Insurance
13 Elevate the importance of lift records! David Pickering looks at what lift documents need to be in place if taking over a new building 15 Who looks after
your fire alarm system? Check your contractor is qualified, urges Paul Bennett
Specialists in the installation and maintenance of smoke control and fire safety systems
Emergency Lighting Fire Safety Signage Remote Monitoring Smoke Vent Systems Dry Risers Fire Risk Assessments Fire Alarm Systems Fire Hydrants Portable Fire Extinguishers
Further discounts for multiple services UKAS - SSAIB - BAFE Third Party Accredited • Safe Contractor, Construction line and CHAS Accredited • Members of the Fire Industry Association and Smoke Control Association • Fully Insured
2
www.newsontheblock.com
ISSUE 105
@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 inpractice 27 Why you need a reserve fund Richard Thwaites explains what it is and why it matters 29 The long and the ‘short’ of it! Leah Veasey explains what you can do if you want to buy a flat with a short lease 31 Can someone just sort out the bin store? Conan offers a solution to dealing with a smelly store intheknow 33 Upcoming events in the industry There’s another packed calendar of events in the next fewmonths
FORMORE INFORMATION www.newsontheblock.com
23 How do you value your interests? James Paul asks: What would it cost y o u to rebuild your block? 24 When commission earnings aren’t legitimate Paul Robertson looks at when insurance commission becomes embezzlement 25 Why you need an up to date valuation Don't let your buildings declared value collect dust
Thursday, 4th June Save the date
directory 34 Help at hand A selection of companies offering help to leaseholders
3
www.newsontheblock.com
ISSUE 105
DILLONS
Don’t gamble with your block management Dillons have many years of block management experience and a range of services including the collection of service charges, annual accounts preparation, staff supervision, organisation of small & major repair works, liason with lessees & preparation of section 20 notices.
So you can be sure with Dillons managing your block your’re in safe hands.
For full details of our property management service please contact us.
Your Local Residential Managing Agent 619 Holloway Road, London N19 5SS t: 020 7561 5230 f: 020 7561 5231
e: info@dillonsproperty.co.uk w:www.dillonsproperty.co.uk
4
www.newsontheblock.com
ISSUE 105
news
Grenfell charges delays frustrating, say families
A n artist is at war in court with his millionaire neighbour who he claims stole half of his front garden whilst he was abroad. William Savage says Richard Bankart, his neighbour in the basement, “dug out” part of the garden at the front of his flat in Stockwell, South West London. Banker turned multimedia artist Mr Savage, 45, claims eco-tech expert Mr Bankart, 59, then built a sunken patio on it while he was away living and studying in Paris. The artist is now asking a judge to grant an injunction barring Mr Bankart from “his continued trespass and use of his front garden”. The pair have been battling over the patio since 2003. Basement garden battle Woman dies in flats fall A woman died after she was believed to be visiting Littlecross House apartments in Bristol when the incident took place. Police were called to the scene and found a body at around 2am on 12 January. Three women were arrested in connection with incident and were released under investigation, police said. fell from a block of flats. The 50-year-old
F amilies of the victims of Grenfell may have to wait until 2025 to find out if anyone will be charged for the 72 deaths. Police have told relatives and survivors that they won’t make any decision on charges until after the second phase of the public inquiry into the disaster is complete. The latest stage of the probe began in January and has already caused anger because the firms involved have asked for immunity from prosecution. The second phase is more complex and likely E xisting leasehold legislation has caused hostility and disputes during the enfranchisement process, a leading member of ALEP has said. Barrister Nicola Muir made the comments as she welcomed Law Commission proposals which, if adopted, could benefit both leaseholders and freeholders when going through enfranchisement. Nicola, who works at Tanfield Chambers, said: “The current system
the inquiry, until at least 2023 to publish his final report. They say they will then have to wait a further two years for police and prosecutors to decide what charges, if any, can be brought. Shah Aghlani, whose mother Sakina Afrasehabi, and aunt, Fatima Afrasehabi died on the 18th floor of the tower said: “It is frustrating. Justice delayed is justice denied. "Quite a few of us think charges should come sooner rather than later but they [police] keep saying they don’t want to miss anything. deadline, they may have to accept a low or unfair price for their interest,” Nicola added. The Law Commission is due to publish its report setting out reforms to the current system to make enfranchisement simpler, cheaper and quicker within weeks. She welcomed the proposals that would scrap “existing draconian sanctions” for both leaseholder and freeholder if key deadlines are missed. Nicola added: “The new regime would be more flexible and would give the first-tier tribunal a much wider jurisdiction to deal with the whole gamut of disputes which can arise in enfranchisement claims.”
to take longer than the first inquiry, which took 16 months. Figures released by the Grenfell Inquiry show the second phase of the investigation into the disaster has unearthed 200,000 separate documents – 10 times the number analysed in the first stage. Phase two will be split into eight separate modules, with 21 companies granted “core participant”status along with more than 600 individuals. Relatives fear it could take Sir Martin Moore-Bick, the retired Court of Appeal judge who chairs
Enfranchisement process causes hostility, barrister claims
outmoded enfranchisement process – not the individuals involved – that leads to disputes. Instead what we need is scope for more negotiation, open dialogue and process-led interactions.” As one of the sector’s leading barristers, Nicola has worked on all aspects of landlord and tenant disputes and specialises in property litigation for both residential and commercial cases. She said that enfranchisement claims frequently became hostile because aspects of the legislation could trap the unwary. “If a tenant misses a deadline in the process, the right to an extended lease is lost and a new claim can’t be made for a further year. If the landlord misses a
creates an adversarial environment, whereas what we need is less of the ‘us v them’ mentality. “It’s the
5
www.newsontheblock.com
ISSUE 105
news
6
www.newsontheblock.com
ISSUE 105
news
Property management firm's boost for RTM
R esidential property has expanded its Right to Manage (RTM) offering. The RTM initiative provides leaseholders with the right to take control of running their apartment building from their landlord. But to be successful, correct procedures must be followed. Bosses at Rendall & Rittner say that the move will mean they can offer advice to management company, Rendall & Rittner
Managing director Richard Daver added: “We are pleased to offer our services to leaseholders interested in this process and guide them through the procedure of Right to Manage. With over 30 years of property management experience our wealth of knowledge will help prospective clients understand what is involved in managing a building and the steps needed to begin the RTM process.”
more residents who are considering taking over the management of their building. Rendall & Rittner’s group head of legal Azmon Rankohi: “The Right to Manage process is ideal for residents who are considering taking over the management of their apartment building. Although the process of RTM is relatively straight forward,
A ffordable housing developer Pocket Living is in talks with potential partners over funding to kick-start an expansion outside of London. The home builder has built and sold hundreds of micro-flats for first-time buyers otherwise priced out of London’s property market. It has set its sights set on the commuter belt, including Oxford, Cambridge, Maidenhead and Winchester. Pocket Living has raised £51.4m in debt financing from Sadiq Khan, the London mayor, and his predecessor, Boris Johnson. A spokesman said: “Pocket Living is talking to the government and administrations on how its model can be replicated outside the capital. Nothing has yet been agreed.” The company’s portfolio of one- bedroom flats are sold with a 20pc discount on market rates. The Pocket Living eyes expansion
the qualifying rules and criteria can be complex.”
Airbnb develops internet check for customers
N ew technology that scours the internet to work out if someone is likely to trash holiday accommodation has been developed by Airbnb. The online rental marketplace firm has worked on the analysing software to check out social media accounts to calculate risk. The “trait analyser” software uses artificial intelligence to mark down people 'associated' with drugs or alcohol, hate websites, or sex work. It does this by R esidential block facilities company Future Group has added a heating division to its portfolio. Company bosses decided to launch Future Heating Solutions to meet the growing demand for fully compliant heating installations in the residential block sector. The new business is headed by Mark Georgiou, a qualified
scanning keywords, images and video footage across the internet linked to a potential customer to assess their trustworthiness. The programme will also assess their 'behavioural and personality traits' including 'conscientiousness and openness' alongside its usual credit and identity checks. An Airbnb reports states: “'While no screening system is perfect, globally we check hosts and guests against regulatory, terrorist, and sanction watchlists,”
apartments are only available to first- time buyers who live or work locally and who earn a household income less than £90,000. Facilities firm adds heating division
is a great fit with the rest of the Future team. “We are absolutely confident that Mark, with his extensive knowledge of heating technology and the property industry, will bring the exceptional levels of customer service and knowledge leadership that our client base has rightly come to expect from the Future Group.”
Willsdon said: “We’ve launched the company in response to block management clients who need specialist advice. Heating will be sitting alongside lighting, fire & life safety and security as the final piece of the facilities jigsaw.” He added: “We are delighted to welcome Mark on board. We believe he is the ideal person to head up the new company and
and accredited commercial and domestic combustion engineer with almost two decades of experience in providing services for some of the property sector’s leading names. Future Group director Jamie
7
www.newsontheblock.com
ISSUE 105
news
Specialist not standard
Blocks of Flats Insurance
Deacon is a specialist blocks of flats insurance broker.
We work with more than 300 property management companies nationwide who trust us with over £15 billion* pounds worth of property. Standard and non-standard construction, from purpose built and conversions to listed buildings, we cover blocks of all shapes and sizes.
Our skilled specialists draw on their extensive experience to find competitive block cover, delivered in an award-winning** service.
As part of Gallagher, our market insights can help simplify and enhance your insurance cover - innovatively and cost effectively.
With 29 years’ experience we work with a panel of well-known insurers to ensure your cover protects against the expected and unexpected.
Call us and discover why 95% † of our agents and property factors renew with Deacon every year.
Some of our partners:
Call: 0808 149 9564 Email: agents@deacon.co.uk Or visit: www.deacon.co.uk/agents
Deacon is a trading name of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 7th Floor, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909
8
www.newsontheblock.com * Data collected by Deacon at 31 December 2017 ** Block Insurer of the Year 2016/2017 (PMA) and Broker Claims Team of the Year 2016 (Insurance Times) † Data collected by Deacon comparing agents on our book at 1 January 2017 and 31 December 2017.
ISSUE 105
FP737-2018
news
Software firm acquires insurance company
the revised plans. Mr Desmond’s company Northern & Shell made an appeal against Tower Hamlets’ non-determination of the planning application from April last year. A planning inspector then recommended that Northern & Shell's appeal should be dismissed. But the secretary of state for housing, communities and local government said that he disagreed with the inspector’s recommendation, allowing the appeal to stand and giving current plans for the site the go-ahead. assumption about the market in which the landlord's interest is valued. Within each regime are further 'sub-options' for reform. These include capping the level of ground rent to calculate the premium and creating an online calculator to work out the cost of enfranchisement. The reforms were immediately branded by campaigners as “nothing more than tinkering”. Tot risks life on flat ledge A toddler risked their life by walking along the fifth floor ledge of a Tenerife apartment. A video shows the girl walking on the corner of the family’s holiday flat in Playa Paraíso, in Adeje, while her mum was reportedly in the shower. After climbing out of a window and walking along the ledge, the child reaches a railing around a balcony and sits down on it. The management of the building have sent a safety report to the town hall in response to the incident.
A software solutions firm for the property market has acquired an insurance company to help protect tenants and landlords. MRI Software has announced that it has bought Multifamily Insurance Partners. It plans to put resident insurance compliance programmes in place for tenants. Bosses say it will help property owners and A £1bn regeneration project in East London that will see 1,500 new apartments developed has been given the green light. Housing Secretary Robert Jenrick has overruled a planning inspector to grant permission for a 15-acre site on the Isle of Dogs. The Docklands site was once home to the Westferry Printworks and housed the Daily Telegraph and Daily Express. Media tycoon Richard Desmond is behind the development next to Millwall Harbour, which will consist of flats, restaurants and M arriage value should not exist, a trustee of the Leasehold Knowledge Partnership has said. Dean Buckner made the comments to the BBC on the eve of the Law Commission’s long- awaited proposals to reform the £2.5bn enfranchisement business. Marriage value is the supposed increase in value of a property when the freehold is
and residents. “Offering renters insurance via online portals gives MRI clients more options for creating a fully automated system that addresses the preferences and habits of modern renters; and a tightly integrated and intuitive insurance compliance program is crucial for property owners and managers to know their buildings are protected from any risk.”
operators close insurance gaps and minimise loss. David Carner, senior vice president of residential solutions for MRI Software, said: “Acquiring Multifamily Insurance Partners enhances “It enables MRI to make resident insurance available as part of a single, fluid leasing and on-boarding process that protects both property owners MRI’s comprehensive residential offering.
Green light for £1bn docklands project
flexible workspaces. He scaled up the size of the development in 2018, doubling the number of planned new homes to 1,500.
The former Daily Express owner has faced local opposition over the scheme, with the Mayor of Hackney objecting to the increased height and density of
LKP trustee hits out at marriage value
the supposed additional ‘profit’. You are asking someone to pay someone else for something they already own.” Every year there are around 100,000 lease extensions and about a fifth of them involve calculations for marriage value. The Law Commission has presented three schemes for a new regime to calculate the cost of enfranchisement. Each is based on a different
added to the least.
It is relevant in the calculations of extending leases of less than 80 years. Former Bank of England regulator Dr Buckner said he objected to the payment because the leaseholder had already paid for the extension. He told the BBC: “If the leaseholder has already paid for the extension, there should not be any compensation for
9
www.newsontheblock.com
ISSUE 105
Thursday, 4th June big thank you to our award sponsors
looking forward to the ERMAs
Book your place now nikt@newsontheblock.com
appointments
Firm’s growth fuels appointments
S ix new positions have been created at a property management firm as it strengthens its team after a period of growth. PM Legal has appointed Charlotte John, Jessica Feltham, Yasmin Taylor and Courtney Tabor as senior paralegals. Evie Britton and Luke Evans have also been appointed as paralegals. Partner Cassandra Zanelli
said: “I’m excited to welcome our six new paralegals to PM Legal, especially as investing new talent into our firm will be extremely beneficial to follow the recent growth we’ve had. “We’ve acquired a variety of new clients nationally recently and as a result, we’ve seen a massive expansion in our team to cater for this specialist sector.
“I believe our new team
will provide valuable contributions into continuing our reputation of providing excellence in the work we do as a well-established law firm. “With our new starters, the strength and depth we have in our team will only continue to thrive and bolster the trusted relationship we have with our clients.”
Property assistant boosts firm
A n experienced property Management’s customer services team as the business continues its fast growth. Adam Kightley has been appointed as a customer services executive, reporting to the company’s customer services manager Michelle Cox. Michelle said: “We’re delighted to have appointed Adamwho really understands great customer service and he will quickly become a real asset to us. assistant has been recruited to join Principle Estate P roperty management law firm Brady Solicitors has recruited an experienced leasehold solicitor as it sees a rise in instructions. Adam Fotiou has joined the litigation team, handling leasehold and property management matters and property-related enquiries. He joins the firm after four
property managers. “Principle is continuing to recruit staff at nearly one person per month to match its fantastic growth and I’m confident that Adamwill help me to ensure our customer service remains the best for our clients.” Adam said: “It’s an exciting role and a great time to join this growing business, and to work with some quality people who know property.” The appointment has boosted the customer services team’s ability to deal with property maintenance and administration.
B uilding surveyor Earl Kendrick’s London team has appointed a new head of surveying. Martin Hurrell MRICS CMaPs will lead the team of senior surveyors in the capital. Earl Kendrick managing director Julian Davies said: “We’ve welcomed Martin to lead our London team of senior surveyors. He joins us at a time when Earl Kendrick’s geographical reach is expanding across the UK and his appointment enables us to continue embracing our core values as agile surveying experts in the property management sector. Martin’s role is crucial to our continued success in the capital.” Martin has more than 25 years in the property and construction industries. Surveyor to head London team
“He has a growing knowledge of the property sector as an Associate of the Institute of Residential Property Management, and he will use his skills to provide a key role to support our
Law firm recruits leasehold solicitor
years as an in-house litigation and dispute resolution solicitor at property management company First Port. Adam said: “Brady Solicitors’ specialist and niche approach appealed to me from the get-go. The team strongly believes in establishing a genuine working
partnership with its clients to fully understand their business needs. Lawyer joins Fexco management team
A lawyer has been welcomed to the senior management team of specialist property management services company, Fexco Property Services.
established Bristol and London based firm. Fexco Property Services is a group of specialist companies providing a full range of property management services across England &Wales to developers, freeholders and resident management companies.
Rob Chapman (LLB) has joined the group as head of legal and compliance. He brings more than 20 years’ experience as a qualified lawyer in both commercial property and development sectors. Rob was previously a partner in an
11 ISSUE 105
www.newsontheblock.com
inresidence
25th March
etc. Venues Victoria 1 Drummond Gate, Pimlico, London SW1V 2QQ
Bringing together Leasehold professionals for a day of conference, networking and knowledge exchange
Book your place now nikt@newsontheblock.com
12 ISSUE 105
www.newsontheblock.com
inresidence
the duty holder ceases to use the lifting equipment. In the case of ‘in service’ thorough examinations, normally carried out by your insurance inspector, the regulation requires that the information is retained until the next report is made. Where immediate or timed defect reports are issued, these too are required to be retained until the next such report is made. Interestingly, PUWER states that there is no requirement for you to keep a maintenance log. It does, however, require that routine inspections are undertaken on the lift and that a record is kept of these inspections. These inspections fall outside of the thorough examinations required under Regulation 9 of LOLER and the inference is therefore, that they would fall under the remit of someone other than a LOLER inspection. It makes sense that both maintenance and inspections are undertaken simultaneously and that a combined record is provided, detailing, as required by PUWER: • The date the inspection was carried out • Who carried out the inspection • Any faults • Any action taken • And to whom the faults have been reported. Retaining a comprehensive record of your lift documents is essential to ensuring that you comply with your legal obligations under the Health and Safety at Work etc. Act. There is no requirement as to how information should be stored, and the scanning of paper documents is completely acceptable. If you have any concerns about the compliance of your documentation or would like to speak to someone about any aspect of your lift, why not call one of our team today and we will be happy to assist.
an installer must provide the owner with a declaration of conformity certificate, which certifies the lift’s compliance with the lift regulations. The installer is also obliged to provide an operations and maintenance manual, which provides “instructions containing the plans and diagrams necessary for normal use and relating to maintenance, inspection, repair, periodic checks and the rescue operations”. Both items should be held for the duration of the time that a lift is under the management of the duty holder and should be passed on to any future owner or duty holder that may take over the role. LOLER also refers to the declaration of conformity, advising that it should be retained as proof of being subject to a thorough examination prior to initial use. Once in service there are several regulations that may apply to your lift, but the two that tend to be ever present are LOLER and PUWER. Both place obligations on the duty holder to ensure that the lift is “maintained in an efficient state, in efficient working order and in good repair” (PUWER). And that their lifts are thoroughly examined “in the case of lifting equipment for lifting persons or an accessory for lifting, at least every 6 months” (LOLER). Along with the requirement for regular maintenance and inspections, the regulations also require the duty holder retains records of these maintenance and inspections for minimum specified periods or until their tenure as duty holder ends. When that happens they should pass all records on to the next owner/ duty holder. Regulation 11 of LOLER requires that the information contained within the initial thorough examination report (taken as the declaration of conformity) be retained until
Elevate the importance of lift records!
T aking over the management of a building can be a complicated administrative process. Ensuring that a complete and accurate record of all historical information is obtained is often difficult and time consuming. The presence of a lift within the building will add to the level of paperwork that needs to be collected. But what information is required in order to ensure that you comply with your statutory obligations? Several court cases involving tragic lift accidents in the past few years have highlighted the need to ensure that an accurate record of key lift information is kept on file. It should be available for inspection or review, if it is requested. The extent of that information is detailed within a number of regulations
including the Lift Regulations 2015, The Lifting Operations and Lifting Equipment Regulations (LOLER) 1998, and The Provision and Use of Work Equipment Regulations (PUWER) 1998. Both of the latter regulations are borne out of the Health and Safety at Work etc. Act 1974. So, what do the regulations require? Well, let’s start at the beginning! The Lift Regulations say that before placing a lift in service, Do you knowwhat lift information to look for when taking on a new building? David Pickering takes a further look
David Pickering, Technical Director at ILECS Limited
13 ISSUE 105
www.newsontheblock.com
THE AVERAGE PERSON WALKS AT 4MPH.
We don’t do average.
We create the perfect solution for you that gets fast results.
If you’ve had average results in the past from debt recovery solutions, then you may need to look at PDC.
With 100% success rate in ground rent & service charge arrears, 100% success rate in freehold and over £192 million collected
in the past 10 years – we’re not your average solution. Call us to find out how we can help you in 2020!
pdc Property Debt Collection Ltd
01992 449 403 | info@ propertydebt.co.uk | propertydebt.co.uk | @PropertyDebt
inresidence Who looks after your fire alarm system? F ire detection and alarm systems are installed in residential and commercial buildings primarily in the interest of life certification scheme called BAFE SP203-1 which covers fire detection and fire alarm system work. It is important that when appointing a contractor to carry out any work on your fire alarm system that you ask for their valid
safety. They are designed to provide an early warning of a fire to enable occupants of the building to escape in a calm and safe manner. As a life safety system, it is important that your fire alarm system is appropriate for your building, being designed, installed, commissioned and maintained regularly by a suitably qualified and competent company. How do you know who is suitably qualified and competent to work on a fire detection and alarm system? Third Party Certification (achieved in the specific work you require) is the best assurance of quality when looking for a provider to help meet your fire safety requirements. This provides a clear method of determining a company’s competency to deliver a specific service. The BAFE Fire Safety Register has developed a third party
BAFE SP203-1 certificate and check that the modules which are indicated on the certificate match the category of work you require. By specifying this certification as a requirement demonstrates you have taken constructive action and due diligence to find a competent provider. PLP Fire Protection hold all four modules under the BAFE SP203-1, UKAS Accredited Third Party Certification Scheme and are full members of the Fire Industry Association. (UKAS) is the sole national accreditation body for the United Kingdom. UKAS is recognised by the government to assess against internationally agreed standards, organisations that provide certification, testing, inspection and calibration services. Often companies can display multiple logos on their website and literature showing “accreditations”, which could be affiliations and memberships with trade associations and manufacturers. It is important not to confuse these with UKAS Accredited Third Party Certification and due care and attention must be taken to check this. How do I check my chosen company holds appropriate third party certification? To check if the company you are appointing holds BAFE SP203-1 Third Party Certification simply look on the BAFE website (www.bafe. org.uk) and use the search tool available. End users specifying a third party certificated, BAFE Registered provider can have peace of mind that their fire safety compliance requirements are being fulfilled by an independently assessed, competent provider minimising any risks. Who are UKAS? The United Kingdom Accreditation Service
What is BAFE and what does BAFE SP203-1 mean? BAFE is the independent register of quality fire safety service providers. These registered providers are third party certificated to confirm their quality and competence to help meet your fire safety obligations. The BAFE SP203-1 third party certification scheme was developed to ensure a quality level of competency, working to appropriate standards and best practice, with fire detection and fire alarm systems. The scheme is modular and is made up of four categories • System Design • Installation • Commissioning & Handover (skilled checks made on-site before use) • Maintenance
When it comes to fire safety it’s important you check your contractor is qualified, explains Paul Bennett
Paul Bennett is director of PLP Fire Protection
15 ISSUE 105
www.newsontheblock.com
inbox
InBox
Who looks after your fire alarm system? Page15 £4.50 Issue105 /2020 TheMagazine For Apartment Living Insurance Special edition
Email us at: editor@newsontheblock.comor tweet us at @newsontheblock Text us at: 0786002 1858
QUESTION I own my flat and have a share of the freehold. My neighbour upstairs had a blocked sink recently and it leaked into my property causing damage. The board members have insisted that I use a rogue builder whose qualifications have not been provided. They have put pressure on me to use this builder. I didn't accept their conditions so they have now refused to help. They are not willing to provide my details to the owner above who has tenants in the flat. I now have damage in my flat and have been extremely stressed. I feel the board is not acting appropriately. I have provided them with two further quotes that I gathered from registered and reputable businesses and they have refused to fund them insisting on usage of their builder. Can I report this misconduct to someone or is there anything else that I can do? ANSWER This is an unfortunate situation but an option may be to write to the neighbour in question at the flat. Usually sub-tenants will advise their landlord of post received for them at the property, so the correspondence could be passed along. The correspondence could be an informal letter advising of the situation or, if a more direct approach is preferred, a formal
be something that the members cannot actually insist upon. Aside from company law aspects, a leaseholder is entitled to quiet enjoyment of their property and it would be prudent to review the terms of the lease. There may be provision in there for the freeholder landlord taking action against the neighbour in question upon request, owing to the nuisance and damage caused (such provisions often entailing an indemnity to be given to the landlord regards any costs incurred however, so caution should be exercised accordingly). The bottom line though, over and above the foregoing, is on what basis is the board involved with the repairs anyway? Why is the reader seeking their agreement as to which contractor to use? As a leaseholder they have a right to undertake repairs to their demised property and in lieu of any pertinent agreement with the neighbour on the point, should not be restricted to using only the board’s approved builder. It is not a freeholder issue as the damage is to the reader’s demise, not the common parts. In the event works are undertaken via a contractor of the reader’s choosing, in order to recover the cost of those works, as above, correspondence could be sent to the neighbour’s flat demanding payment, with a view to proceedings being issued in the event payment is not made As an additional recommendation, the reader should keep a
letter of claim advising that if the damage is not made good or payment is not made in respect of the cost of remedial works, court proceedings may be issued. Further still, and if feasible, could contact not be made in person with the tenants occupying the flat to see whether they would be able to directly provide their landlord’s details? As a member of the board, the reader may have access to the neighbour’s contact information in any event and perhaps the neighbour is also a board member. The issue could be brought to their attention by way of a board meeting. It isn’t known whether the members in question include the chair. If not, in lieu of getting anywhere with contacting the neighbour concerned, the chair could be apprised of the situation to gain their point of view and perspective. If the dispute remains unresolved, a board meeting could be called to discuss the matter formally (if it hasn’t been already) and a vote could be held concerning instruction of a preferred contractor. The company’s Articles of Association should also be reviewed to see whether they afford any relevant assistance or clarification – notes should be taken of what the Articles provide for in terms of voting rights and achieving a quorum, and, in particular, what rights and powers the company actually has; to use a particular builder may (is likely to)
10
TOP tips
10
reasons to review your insurance in 2020
ISSUE 105 FEBRUARY 129 Finchley Road, London NW3 6HY Tel 0203 538 8875 enquiries@newsontheblock.com www.newsontheblock.com Founder and Director Nicolas Shulman - nic@newsontheblock.com Publishing & Events Director Louise Newton - louise@newsontheblock.com Advertising Nik Trevillion - nikt@newsontheblock.com Production & Editorial Vikki Morlang - vikki@newsontheblock.com Events Charlotte Benton-Hughes - charlottebh@newsontheblock.com Design H. Ezgi Ece ISSN 1476-766X NewsontheBlock ispublishedbyProperty InkLtd.©AllRightsReserved.Nopartofthis publicationmaybereproducedorused in wholeor inpartwithoutpriorpermission in writingfromadirectorofProperty InkLtd. Everycare istakenwithartworkandfilm submittedforpublication.However,Property InkLtdcannotbeheldresponsibleforany lossordamages incurred.Materialcontained inthismagazine isforgeneral information onlyand isnot intendedtoberelieduponby individualreaders inmakingorrefrainingfrom makinganyspecificcommercialor investment decision.Appropriate independentadvice shouldbeobtainedbeforemakinganysuch decisions.Theopinionsexpressed inthe articlesarestrictlythoseoftheauthors.We reservetherighttopublishandeditany letters. Wecannotacceptresponsibilityforunsolicited manuscriptsandphotographs.Allpricesand offerscorrectattimeofgoingtopressbut subjecttochange.Property InkLtddoesnot acceptany liabilityforany losssufferedby anyoneasaresultofusingthismagazine.
16 ISSUE 105
www.newsontheblock.com
inbox
Call of theMonth
contemporaneous log of the damage sustained, costs incurred and correspondence sent and received in the matter. Any invoices and quotes should be kept and for the purpose of evidencing the causal link between incident and effect. The reader should also consider obtaining a report, if they haven’t already, confirming that the damage sustained to their flat was caused by the leak from their neighbour’s flat as alleged. Kirsten Blower is an associate at JB Leitch QUESTION How can I get a copy of the lease for my flat? ANSWER You should have received a copy of your lease when you purchased your flat from the conveyancer. You can also obtain a copy from the Land Registry, however there may be a charge. You can find out more via landregistry.gov.uk If there is a mortgage on the property, then some mortgage lenders also hold a copy of the lease.
Thanks to Adiuvo – specialist out-of-hours and call-handling solutions for the property management industry
A call last week had our office and staff extremely concerned for the welfare of a resident’s new kitten (this new BTR scheme that encourages pets). The first call we receive was a general enquiry regarding where a communal door led. The resident thought the cat may have escaped whilst they were retrieving a parcel. The second call was to confirm the cat had been located but was trapped beneath the heavy fridge and they were unable to free it. Luckily, we had a handyman at the same site attending to a faulty patio door and they attended to help move the fridge and let the cat out safely.
17 ISSUE 105
www.newsontheblock.com
Insurance
indepth
practice
Question Paper 1: Legal Services
51. Following the enforced implementation of fire safety measures after the discovery of combustible cladding on a high-rise block, your application to the First-tier Tribunal (Property Chamber) under s27A Landlord & Tenant Act 1985 relating to the recovery of interim and long-term fire safety measures costs as service charges has been rejected.
Discuss the relevant options.
With us. jbleitch.co.uk
18 ISSUE 105
www.newsontheblock.com
Insurance Feature Insurance
indepth
Safely ‘under cover’?
L andlords are usually subject to damage or destruction. Leaseholders are required to make payment of their proportion of the insurance as rent or via the service charge. Where there is a dispute is whether terrorism insurance is required, leaseholders are entitled in the usual way to challenge the reasonableness of service charge and insurance rent. Payability and reasonableness The subject of terrorism insurance is frequently raised in respect of who pays and as usual the lease will be the starting point in assessing whether the terrorism insurance is a risk capable of recovery from the leaseholders. Assessing the services to be provided and the lessees’ covenants will be required. A specific obligation upon the landlord to include terrorism insurance as an insurable risk would be ideal and provide certainty but this is not necessarily required. Leases may provide the landlord with reasonable discretion as to what risks are to be insured. But a key question is how far does a discretionary provision or other stated insurable risk extend to enable recovery of the terrorism premium? The leading upper tribunal authority of Qdime v Bath Building (Swindon) Management Company [2014] UKUT0261 (LC) provides us with useful guidance where there is not specific reference to terrorism as an insurable risk within the lease. In Qdime the lease provided for insurance for “...the usual comprehensive risks in accordance with the CML [Council of Mortgage Lenders] recommendations... and such other risks as the Landlord may in its reasonable discretion think for to insure against...”. The CML recommends to insure against the risk of explosion. The Upper Tribunal determined that the term explosion, in this context, included an explosion incurred by a terrorist act. Additionally the inclusion covenants within leases to insure their buildings in respect of risk of
terrorism for example, damage from falling debris or damage caused by vehicles deliberately intending to cause terror and damage that may unintentionally damage part of a building. Such cover may be provided within the definition of a malicious act or riots which may be seen in newer leases that cover a wider range of defined risks. Portfolio insurance The terrorism insurance of a building may be contained in a separate insurance policy to the usual building insurance cover as specialist policies are generally required. Pool Reinsurance Company Limited (“Pool Reinsurance”) was introduced in 1993 following the bombing of the Baltic Exchange. for landlords against the threat of terrorism, which (for the purposes of Pool Reinsurance) includes “…acts of persons acting on behalf of, or in connection with, any organisation which carries out activities directed towards the overthrowing or influencing, by force or violence, of Her Majesty’s government Pool Reinsurance provides cover for insurers who in turn insure buildings
of terrorism insurance by the landlord was lawful and reasonable in its decision to include the same. Properties outside of London and major cities can be disputed by leaseholders as to whether they are necessarily to be insured against acts of terrorism but, again, the lease provisions and any discretion held by the landlord will be fundamental in whether the premium is payable under the terms of the specific lease. It is also important to note that what is considered to be a terrorist attack will depend upon interpretation and definition within each individual policy. It is our view that insurance policies should be checked for damage to a building as a result of an indirect act of implications for leaseholders and landlords Phil Parkinson and Katie Edwards look at the challenges surrounding insurance against terrorism and the
in the United Kingdom or any other government de jure or de facto”. Whilst the act causing damage or
destruction must meet this definition for a claim under Pool Reinsurance, other policies may provide a wider interpretation than this, for example explosion or malicious damage.
Implications and points for landlords to consider
When considering whether to insure under Pool Reinsurance, landlords are required to insure their whole portfolio with the policy and are unable to select which of their buildings to include. Additionally landlords may insure their buildings as part of their larger portfolio, which generally may result in lower premiums.
Phil Parkinson is legal director and Katie Edwards is an associate at JB Leitch
19 ISSUE 105
www.newsontheblock.com
Insurance
indepth
20 ISSUE 105
www.newsontheblock.com
17
www.newsontheblock.com
ISSUE93
Insurance
indepth
10 reasons to review your insurance in 2020
The start of a year is a good time to review your insurance to ensure it’s up to date and you have the right cover. ARMA recently partnered with property insurance experts Insurety to create ARMA INSURE. Insurety’s Rob Mayo shares his 10 top tips.
Insurance regulations change Your insurance provider should keep you up to date on any change to regulations,
solutions to help clients save money, lives and mitigate risk. Access to expert Risk Management advice should be an integral part of the service offered by your insurance provider.
1
especially as the UK exits the EU. ARMA and Insurety work with the Ministry of Housing Communities & Local Government to help shape the future regulation of the industry so products and processes including claims management are regulation ready.
Protect Directors and Officers
6
Many people don’t realise they can be held personally responsible for errors or omissions when they agree to become a Director of a Residential Management Company or Right to Manage Company. Directors and Officers insurance provide defence costs and compensation if they are held personally liable for a wrongful act whilst working on behalf of leaseholders. Specialist covers Obtain advice on whether the properties you manage need specialist covers such as Directors & Officers Environmental Liability, Professional Indemnity, Terrorism and where there’s a lift, Engineering. 7
Client Money Protection All firms operating within the Private Rented Sector (PRS) in England and Wales
2
are required by law to hold a government approved Client Money Protection scheme membership but there are key differences for managing agents. Letting agents hold around £500,000 of client money whereas residential managing agents may typically hold over £6m and not actually be covered by their lettings CMP scheme. The “levy schemes” currently available pool the premiums paid by members to pay claims from other members. This works well within the PRS as claim amounts tend to be small, however one claim from a managing agent could cost the premiums paid by all members. An innovative new Client Money Protection product will soon be available specifically designed for UK-based managing agents where firms pay a premium based upon their individual risk and are not affected by the claims of other members.
10 TOP tips
Join a community ARMA has over 300 members who can draw on extensive technical advice, professional guidance, training and support
8
that cannot be found elsewhere. This gives ARMA accredited managing agents a distinct business advantage over their competitors.
Access to expert advice Specialist and experienced property insurance providers are best placed to provide the
4
Service If you’re not receiving good service, switch provider! Review your insurance Most insurance providers offer a free review of your existing insurance. Why not make a
9 10
Managing claims One aspect of insurance that often gives managing agents a headache is having to
3
right cover and price. They should be able to search a panel of reputable UK insurers to find the best solutions for you.
track the progress of claims which can be time consuming and stressful. The claims management process should offer a 24/7 service for you, leaseholders and residents alike, leaving you free to spend your valuable time elsewhere.
Risk Management Residential managing agents need up to date safety and compliance risk management
5
New Year resolution to check yours?
Rob Mayo is managing director of Insurety
21 ISSUE 105
www.newsontheblock.com
Insurance
indepth
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
Visit: www.earlkendrick.com/insurance
22 ISSUE 105
www.newsontheblock.com
Insurance Feature Insurance
indepth
complicated factors involved you really need a professional to calculate an accurate figure. Why are RCAs so important? According to the BCIS General Building Cost Index, a block of flats costing £1m to build in 1985 would now cost £3,310,000, not accounting for location. According to the Retail Price Index (RPI), inflation has only gone up 209% in that period. Calculating the DV using BSIC data alone would generate a figure of £3,089,530, meaning under- insurance of £220,000 or 7%. Furthermore, rebuild costs are highly subjective to the area of the country that you build in. Put a hypothetical block of flats in Northern Ireland and you can shave 30% off the cost of building; move it to London and you can add 30%. DVs for buildings insurance can vary significantly depending how matters such as VAT and demolition are dealt with too. It’s no longer any good relying upon crude measures such as ‘RPI inflation’ to work out your DVs. The risk of over-valuing DVs may not appear immediately obvious. If a building’s DV is unnecessarily high, the insurance premium your client or the leaseholders pay is pointlessly higher. And if you under-insure your building, the insurer may cap any pay-out to the percentage by which the building has been under-insured. A block of flats with a true cost assessment of £20m, but a declared value of £16m, is 20% under-insured. A £200,000 insurance claim for escape of water damage could then be capped at £160,000, leaving a painful shortfall. That’s why property managers and their clients risk being taken to the first-tier tribunal for negligence if fresh RCAs are not undertaken every three years. James Paul MRICS is a director at EK Reinstatement Cost Assessments
How do you value your interests?
D id you know that the rebuild cost (otherwise known as the declared value) for a blocks of flats under your management needs to be reviewed at least every three years according to the RICS? If under-insurance is evident, insurers may refuse to pay claims in full, leaving your client to foot the bill for the difference. If you read the small print in your insurance policy wording, it will normally state that your client (the ‘insured’) is responsible for ensuring that the declared value (DV) is adequate and up to date. But how is a property manager to do this for their client? Many brokers will just ask you what the block is currently insured for then index link that amount (add on a bit for inflation) for the forthcoming
What would it cost you to rebuild your block? James Paul explains why its not a straightforward calculation
To have your building insured for the right rebuild cost, it’s vital that you arrange what’s called a Reinstatement Cost Assessment (RCA) every three years or when there are significant changes to the building (such as an extensive programme of major works or a significant licence to alter project). The good news is you don’t have to pore over the Building Cost Information Service (BCIS) data yourself; building surveyors can help. In fact, given all the other
year. And, hey presto, there’s your new DV! There are obvious dangers to this index linking approach, not least as the DV to start with needs to be correct, so ending up with a DV that is too low (or even too high) is likely. Insurers are increasingly expecting VAT to be included in the rebuild calculations. Factoring this in isn’t as simple as merely adding on 20% because the ‘works’ element of rebuilding can vary block to block and is never a set proportion.
23 ISSUE 105
www.newsontheblock.com
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40Made with FlippingBook Ebook Creator