by: Mary-Anne Bowring
Spanner in the Works
It was only when the leaseholders of a block of flats in North West London enlisted the help of property service providers, The Ringley Group, that they discovered their lease was defective. Buying the freehold is now a popular option for leaseholders. Not only does it increase the value of property but it also gives leaseholders more control over running the block of flats in which they live. However, the task of managing a block with several occupiers can be an unattractive and arduous proposition; it's time consuming and demands a certain level of expertise to understand the legalities of the lease. The occupiers and owners of the block of flats in North West London, like many others in similar situations, opted to self-manage their property rather then shoulder the expense of employing a professional property management company. The tenants decided to meet once a year and write a cheque for the service charge. Paying the service charge yearly rather than monthly is typical of an old style lease, where the freeholder foots the bills throughout the year and then seeks recovery at the end.
This arrangement worked for all of us but unfortunately one of the leaseholders fell into arrears, reveals a flat owner in the block. We were then faced with the cost of a using a solicitor and taking our arrears litigation to the Small Claims Court. Having experienced the cost and time involved in recovering the late payment of a service charge, the owners decided to employ the services of a professional property management company. No one wanted to take on the responsibility of company secretary any more, as at that time three of the leaseholders didn't even reside in the block. So it was decided to employ the services of property management providers, The Ringley Group, says the flat owner. It was at this point that the North West London block received a bit of shock; The Ringley Group reported immediately that the lease was unmanageable and arguably defective. The problem lay in a clause in the lease, which stated that the block of flats couldn't appoint an agent and that funds could only be collected in arrears. This meant that for six years, the leaseholders hadn't been complying with the lease. To resolve the situation, The Ringley Group suggested that the lease was updated.
As long as most of the leaseholders agree, by enacting Section 37 of the Landlord and Tenants Act 1987, a dissident leaseholder can be overruled and the lease can be changed to include an effective service charge clause. The Ringley Group also provided a solution that would provide the necessary services for the owners of the block to continue self-managing their property without an agent. They recommended the using their cost effective online service, www.leaseholdersupport.co.uk. Leaseholder Support is a convenient way for blocks of flats that are self managing their property to receive all the necessary support and tools to alleviate the hassle and responsibility. Everything from compiling service charge accounts to arrears collection is included in the service, explains Mary Anne Bowring, creator of Leaseholder Support.
Since having joined up with Leaseholder Support, the North West London block owners are now legally complying with their lease, as they aren't employing an agent but are receiving the necessary assistance to run the block. Also, the Ringley Group helped them vary their leases inserting clauses to enable the leaseholders to collect service charges in advance, reserve fund contributions and is now supporting this block to get their leases extended to 999 years. Leaseholder Support is a wonderful concept for small blocks like ours and brings block management into the 21st century. It allows leaseholders who aren't actually living at their property to be absent but still communicate regularly with the owner leaseholders in the block. By off loading the time consuming administration tasks to a third party, we have freed up our time but it still allows us to remain in control of the running of the block,concludes one of the flat owners. The North West London block now has an updated lease with an effective service charge clause.
Lease Extension, FH and Right to Manage
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