What our customers are asking

Question

"There is a very bad Mould Problem in the Flat, I called the Management Company and after some time they sent round a Damp Specialist who told me that there wasn't a problem at the flat, Do I have the right to have my own “Specialist round?" - Mr A Williams,

Yes you do. The problem if not an obvious roof or gutter leak may well be condensation, an advice leaflet is attached to help you.

Question

"We achieved our RTM 1st and run the block through a RTM company, we have since bought the Freehold and have a Freehold company as well and would like to simplify things. The problem being, 1 leaseholder is a member of the RTM company only and a Director" - Mr B Roberts, SW15

There is little point having 2 companies on a small site such as this as the accountancy costs of preparing service charge accounts for the RTM company and 2 sets of dormant company accounts for both the RTM and Freehold Company is dis-proportionate to the benefits. The RTM is the legal entity that is standing in the shoes of the Freeholder or now Freehold Company and managing and to stop it managing you'll need to agree to disolve the company, wind it up. This is a procedure that requires clearance from the tax office, non-trading/dormancy status and then an application to Companies House. Our Solictiors practice Ringley Legal LLP could arrange this for you. But first, I suggest the way to deal with the Director of the RTM Company who is not a shareholder in the Freehold Company would be as follows: 1 - clearly they want to remain 'in control' so they need a directorship 2 - check the articles of the Freehold Company and see if persons other than shareholders or members can be a director of the freehold company, if necessary call a meeting or pass a written resolution so that they can. Ringley Legal LLP can assist you with the resolutions. 3 - to protect yourselves and not expose you to inviting someone into the Freehold Company who then gets their freehold share for free, pass a resolution that lease extensions shall be issued to Flat 1 and Flat 2 (the participants) on request for 999 years at a premium of 1.00 and that future freehold shares or lease extensions will be sold to any leaseholder in the property at market price, such price to be determined by a Chartered Surveyor acting in the capacity as 'joint expert' for the parties. Ringley Legal LLP can assist you with the resolutions. 4 - then it would be safe for you to invite the non Freehold Company owner to be a Director of the Freehold Company to participate in company business, setting service charges running the block etc.... and get their consent to wind up the RTM Company thereby effectively transferring service charge management to your new Freehold Company. Again Ringley Legal LLP can assist you with the winding up. When you've simplified the arrangements I would recommend Ringley's Block Care 300 legal and financial administration package at 525 + Vat per annum which will help you self manage repairs but safely with us running the legal paperwork, budgets and demand cycle. To see what Block Care 300 - from 525 + VAT per year gives you go to http://tiny.cc/bc300 In respect of the ground rent this would remain payable by Flat 3 who did not participate to the Freehold Company. In respect of the reserve fund, this should be held by whatever entity is collecting the service charge and producing the service charge accounts.

Question

"My garage roof and sidewall have now big gaps in it, everything is ruined in my garage, this could have been caused by the erection of a new Morrison Building next door, have asked the Management Company and they have said its not down to them and no." - Mr A Williams,

Depending on how close to you the morrisons building was you might have been supposed to be protected by the party wall act procedures. I'd start by sending photos and threat to Morrisons. Yes you could get the buildings insurance involved, but probably to be covered they'll be looking for a single event as the cause/accident to pay up.

Question

"My balcony wall has crumbled away and part fallen down, its been 3 months now and they haven done anything about it, is this something I can claim of my Buildings insurance for ? not likely, sounds like due to disrepair. " - Mr A Williams,

In theory you should be threatening the management company with action for breach of covenant and getting them to make the repairs. Best to check your lease 1st to see if it is the freeholder's or management companies responsibility to do the repairs, or whether your balcony is demised to you and therefore its your responsibility. there should be a plan in your lease and it will depend on whether there is a red line around the balcony or whether the red line stops before you enter your balcony. the former makes it your responsibility, the latter the management companies.

Question

" The Agent is demanding 5,000 of me in July for a new roof, I have had no say over this what so ever, is this a correct way of dealing with things, can I then pay this in installments. " - Mr A Williams,

You do have a say, any demand over 250 for any 1 service charge payer must be subject to statutory section 20 consultation (up to 3 notices of 30 days each) the notices are 'statutory consultation' and you have 30 days to make observations, all such observations MUST be replied to in writing within 30 days, you can nominate a contractor of your choice or object if you believe the works are not due or a cheaper or alternative solution can be put in place. Whether you can pay in installments will depend on your lease, probably not is the short answer. Most leases give you 21 days to make payment after a demand is issued. It's worth approaching your mortgage company, a good managing agent will have a 'financial hardship policy' and may well support and help you in remortgaging towards capital works projects.

Question

"We would like any changes to leases to done at market value, but with a get out that its done at the Freeholder's discretion. We could then allow changes to Freeholder's leases for a nominal 1 upon agreement by both freeholders. Is this possible?" - Mr Roberts,

In short YES this would be achieved via passing resolutions which then need to be held in the company minute books

Question

"On decision making - at present the Freehold flats have one vote each in the Freehold company, which may causes a stalemate in the future. However, we don't want the non freeholder director to have the casting vote, as this will give them greater control than the freeholders. So the question is: Can we appoint a non freeholder as an additional director, but limit their vote to only maintenance issues and not issue affecting the interest of the freehold." - Mr Roberts,

YES, you can and you can call up on that person when you need to. Qualified Chartered surveyors such as myself can act as a 'professional Director' the cost is 100 per annum

Question

"How should we approach the problem of leases, keep carpeted clauses - surely these are out-dated with modern wooden flooring?" - Ms Pope, NW8

Keep carpeted clauses are probably now considered a 'primitive way' of deadening noise arising from "impact sound" particularly in older properties where ceiling/floor insulation schemes are not up to modern standards. Many leases include a "keep carpeted" clause. Leaseholders installing a wood floor covering would be a breaking this rule. Also, installing a wooden floor may may require the landlord's consent using a "Licence to Alter". Some leases have a clause which requires the Freeholder or Management Company to enforce covenants against other owners in breach, often the lease will require the complainant to fund such action. . The most sensitive areas for noise are often the hallways, installing a carpet runner on top of a wood floor in a hallway can reduce impact sound. . Directors of a Management/RTM or Freehold Company who don't take action where the lease requires them to do so could be exposing themselves to an action for breach of lease (not upholding the lease covenants). . It's worth seeing whether the lease enables the site to form 'regulations' as these being supplemental to the lease can then also be enforced. . If you are preparing granting a new lease or lease extension a good method of modernising the lease would be to permit wooden floors subject to a suitable sound insulation scheme being approved and licence to alter granted by the Freeholder. And, a clause to state that the complainant must bear the costs associated with determining the validity of the complaint (including, in this instance - sound testing). So the short answer is that you need to find an opportunity to get an effective lease.

Question

"We are self managing a block in W2. The building has 7 flats. 4 owners own the freehold at 25% each. Each flat has a different value and pay a different % of service charge. The other 3 flats are only leaseholders (they do not own the freehold). So far we have been managing since 2009 without asking any money to the leaseholders for managing the property, nor for director or secretary fee. Since lately one of the leaseholders wanted to extend his property against the lease we had to stop him legally and we (the freeholders) incurred in high legal costs. We have been asking for ground rent, but that is all. Now we would like to ask for managing costs and we would like to know how it works, what are the expenses we can recover as freeholders. " - Chiara , W2

Whether as a self managing landlord you can recover your management costs will be specified in the lease. Similarly whether you can recover the cost of appointing a professional Managing Agent will also be set out in the lease. Many leases whilst providing for a Managing Agent, because they use the words 'Managing Agent' as opposed to the words 'managing' leases often cover the costs of an Agent but not necessarily a self managing group to charge costs. In terms of retrospective costs Section 20B of the 1985 Landlord and Tenant Act prevents you going backwards in charging further than 18 months from the date you bill an amount, so you cannot now go back and charge costs to 2009. It only costs 60+Vat for Ringley to benchmark your lease and answer these questions if you would like us to do so.

Question

"I am a developer of a new build scheme involving flats and commercial units. The buyer of a commercial unit is not agreeing to a restriction at HM Land Registry preventing a sale of the unit without the Managing Agent issuing a compliance certificate. What kind of risk is he to me?" - C Tomson, MK1

A restriction requiring a compliance certificate is critical. Its purpose is to ensure that arrears (and any other non-compliance/breach) are made known to a buyer before they take registration of the property. Effectively, the buyer cannot become the registered proprietor of the property until a compliance certificate is issued. And, you don issue a compliance certificate if there is a breach you want remedied. Doing away with this clause will (a) damage the reversionary interest of the property (b) render it harder to manage, and (c) arguably expose the freeholder to make up any shortfall........... not good news The only other way around this could be to agree to remove the restriction/compliance certificate clause but instead suggest a clause to require them to obtain a licence to assign signed by the Freeholder and the Management company. A licence to sign being a process whereby the lessee applies to the Freeholder/Management Company for permission to sell. The person granting such permission would refuse if (a) there was any breach of lease or arrears to be remedied, or (b) if they did not like the credentials of the proposed incoming purchaser. In reality the process to obtain a Certificates of Compliance costs less than 100 + Vat. The process to obtain a Licence to Assign can cost 750 +. I know which I'd prefer!

Question

"When a flat is sold and there are arrears on service charges and/or ground rents what happens? Also if after preparing the year end accounts there is a surplus to redistribute back to the leaseholders, is it the leaseholders at that point that get the refund or the ones that actually paid towards the service charges on account during the year? " - J Sargeant, CM17

The mechanism to help stop sales complete when there are service charge/ground rent arrears is a restriction registered at HM LAnd Registry. This restriction usually requires the Managing Agent to issue a certificate of compliance so that UNLESS a certificate of compliance is produced the land registry will not register the transfer. Re: who gets the balancing charge (surplus or deficit) It is the leaseholder who is the owner at that time a balancing charge is made that gets the benefit (or the bill). Any buyer with a good Solicitor should be protected against this as under the Law Society protocol the buyers and sellers solicitors should ask the status of the service charge accounts, enquire about possible deficits and hold a retention on the purchase price until the deficit/surplus is known to protect the buyer etc....

Question

"I have heard that there could be alternatives to having hatches fitted. Is this true?" - Ms Jones, ME14

Visual examination checks by engineers via inspection hatches is currently the preferred method recommended by the industry guidance that explains how to judge that a flue is working safely and effectively. However, where inspection hatches are not practicable industry has developed a safety system which is able to monitor the void for the presence of carbon monoxide and which cause the boiler to shut down if it is detected. If you want to see what these devices look like click on this link.http://www.installeronline.co.uk/baxi-launches-carbon-monoxide-monitoring shut-off-system/

Question

"We are contemplating buying the Freehold as we have received a Section 5 Notice offering us the 1st right of refusal else the Freeholder has nominated another buyer. My questions are: 1) assuming all parties were interested in purchasing their share what would we each end up having to pay? 2) Would all the shares be equal? " - Miss Azami, NW8

The answer to question 1 is A - that would be up to you as shareholders in the new freehold owning company to decide, some choose 1/9th, some choose to do it by relationship to flat sizes or flat values, in valuation terms it is normal for valuers to add a notional 1% enhancement to flats value by virtue of them owning a share of freehold The answer to question 2 is A - yes they should be as once you have achieved a level playing field by either paying in a 1/9th share or paying differential premiums to the purchase, the company will operate better in the spirit of equal share decision making after that. So you deal with any inequity in the initial share premium, not in voting for the next 99 years etc..

Question

"Gatchell Oaks is a development circa 6 years old, we are concerned about the quality of management and installation of the double glazed windows as well as what appears to be a sham management arrangement." - Gatchell Oaks Residents Association, TA3

Ideally you should find a way to take control. Right to Manage would be the best way, as you don't have to prove fault, but you will need 50% of owners of interested. It is hard to force an unwilling Agent to manage and exhausting too. in respect of your windows the matter will relate to 1) the fact that usually the lease will demise the windows and their frames to the lessee (so they are yours to fix) 2) the amount of time since construction ie, your contractual remedies against the developer (who sold you the flats and windows) a Solicitor could advise you if you have a claim under any of these pieces of legislation 1. Defective Premises Act claim brought within 6 years 2. Latest Damage Act only applies to negligence cases not defects 3+ years after discovery 3. Original owners breach of contract claim converted to a good standard. (Building regulations, Drawings, Good workmanship, Good design) = Breach of contract. Expires 6 years after date of performance of contract unless contract made under deed in which 12 years is the timescale. Whilst lease may be a deed it does not contain the contract clauses to carry out works to a good standard. 4. Negligent survey advice (Building Surveys/Homebuyers). Date defects came to light as claim needs to be made within 3 years of that date? 4 legal remedies - developer issues DIFFERENCE BETWEEN 6 YEAR AND 12 YEAR RULE Usually limitation on leases is 12 years because.... the 6 year rule applies to a simple contract. A simple contract requires acceptance and consideration (one off). Leases are usually in deed form as they contain covenants which run with the land - lease lease deed is about a solem bind in the case of a lease tied to land not a one off payment.

Question

"1. What practical requirements are there for the purposes of the buyer becoming a member of the freehold company, as envisaged by clause 34 of the 4th schedule of the lease. 2. Please could you confirm if clause 4 of the 5th schedule of the lease can be amended to ensure it fully reflects the risks to be accounted on the buildings insurance. " - Ms Sobot, St Marylands Road W2

Your answers in short are: 1. If they are not already a FH shareholder, buying a share at market price - our valuers can establish this for you at "their cost" 2. Any schedule of a lease can be amended but only with both parties agreement, therefore when a property extends their lease or buys the FH there is scope for modernisation, but only if both parties agree this

Question

"I am the Company Secretary of the company which owns the freehold of Hillside, a building which comprises 7 flats. All 7 lessees are shareholders in the company. The company is a member of the FPRA. I am the leaseholder of flat 2. We are about to appoint a contractor to carry out the external decoration of the building which is a three story Victorian house. We are unclear whether the Directors have any other responsibilities when appointing a contractor. We have read, for example, about the HSEs CDM regulations. To what extent do they apply in our case? Do you know of any guidelines or can you help us to decide what we need to do to ensure that we comply with them?" - Hillside Residents , KT6

The answer on CDM is The CDM Regulations deal with the management of health and safety and they place duties on clients, planning supervisors, designers and contractors to plan, coordinate and manage health and safety throughout all stages of the construction project. The reason why the Construction Design and Management Regulations will apply is that it is anticipated by the nominated contractor that the project will fulfil 1 of the following criteria: last more than 30 days, or involve more than 500 person days of work, or involve 5 or more people working on site at any one time

Question

"Each of the flats in our development has an associated garage with a separate Lease, that the shareholder Lessees purchased at the same time as they purchased the Lease of their respective flats. Unfortunately, neither Lease contains a specific clause that subletting is, or is not, permitted; with the result that none of the tenants of these 4 flats, is able to use the associated garages for their cars. For example, the non-resident Lessees of two of the flats have refused their tenant permission to use the garages. In one case, the Lessee himself is using it to store furniture and, in the other, to store his own motor vehicle. Because of this, one of the tenants has 3 cars parked in our restricted roadway, and another, his commercial, long wheel-base Transit van. When the cars belonging to the other two tenants, and resident Lessees are also parked in the roadway which is designated as being for the reasonable use only of the residents it is sometimes impossible for the contractor, delivery and emergency vehicles to obtain access. The garages associated with the two other Buy-to-Let flats are used by the tenants to store their company work materials, trade items, stock, tools, etc., and for use as an occasional workshop albeit possibly without the knowledge of their Landlord Lessee. In addition, not one of the tenants of these 4 flats respects the important terms and conditions of the main Leases scrupulously observed by each of the resident shareholder Lessees, and it would appear that no stipulation requiring them to do so is included in or added as an integral contractual codicil to the wording/terms and conditions of the one size fits standard, Short Term Assured Tenancy Agreements, the Lettings Agents ask them to sign. Given the current situation outlined above, I should like to ask if we, the Directors of THRALL, are empowered, entitled or able in any way to introduce and implement the following stipulations/requirements, i.e. that: (i) the garages associated with each Buy to Let flat MUST be let, empty, with the flat and used by the tenants ONLY for parking their cars ? i.e. that the Lessee cannot retain it for his own use, or sanction its use, for any other purpose during the period of the tenancy; (ii) only one car per flat is permitted on the premises (excluding short term, visitors)? (iii) each Short Term Assured Tenancy Agreement MUST have a summary of the main clauses of the flat and garages leases attached, and a custom worded clause added to their wording/terms and conditions, that includes the stipulation that these MUST be strictly observed at all times? (iv) persistent or failure by the tenant to observe the foregoing e.g. following one verbal and two written warnings by the Board will result in immediate termination of their Short Term Assured Tenancy Agreement and notice to quit? (v) NO tenant is permitted to sub-let a room in the flat to a third party? (vi) Letting Agents must notify the THRALL Board (or its property company ) IN ADVANCE of the name, number, nationality and entry dates of incoming tenants, and confirm that an adequate current, contents insurance policy is in force ? (vii) the non-resident shareholder Lessees of the Buy-to-Let flats be required to sign an agreement with the THARL Board, accepting the foregoing, and that any breach by the Lessee of these terms and conditions, will result in a legally-recoverable financial penalty ? " - Tudor House Residents, KT13 8TZ

Here's your answers: 1) if subletting is not restricted it is permitted 2) tenants have no right to use a separate garage/parking space just because they rent a flat that notionally goes with it (that is a matter of contract) 3) a good lease will prohibit trade, but then there is the burden of proof - suggest you'd need to get good CCTV footage 4) respecting the terms of the superior lease is a matter of whether the superior lease stipulates that any sub-tenancy requires the sub-tenant to enter into a deed of covenant to respect the lease, else there is no connection and your action is against the owner (landlord) of the flat 5) in respect of your proposed stipulations this depends on whether the lease allows you to IMPOSE estate regulations, this would need to be SPECIFIC in the words of the lease However, in practical terms (i) likely to be unenforceable (ii) no car should be permitted unless it has a space on the development, so the 1 car rule is not advised (iii) only enforceable IF (1) lease permits you to write regulations (2) you write a regulation that requires a deed of covenant to be entered into to observe the master lease PRIOR to granting permission to sublet and you retain the right to inspect and approve tenancy agreements - remember even then your recourse is only of the OWNER not the sub-tenant but this may put more pressure on the OWNERS to try harder (iv) impossible and unenforceable, what you need to do is to write to the OWNER about their breach of lease then get evidence and seek permission of the First Tier Tribunal to serve a Section 146 Notice to terminate their lease, the OWNER then can use this to help him serve notice to quit. Your stick is that you won't grant him/her permission to sub-let next time (v) this will be dealt with by a clause in the lease about letting to a single family and may render the property a 'house in multiple occupation' which can be reported to the council, again your route for recourse is to the OWNER as set out in (iv) above (vi) where the lease permits control of sub-letting via a written consent or licence to sublet, ie, an instrument in advance of the tenancy, you just make this one of your criteria (vii) this will fall out of the S146 forfeiture clause, so you already have a route for recovery, naturally, the lease will require you to pre-fund this.

Question

"We have a number of electric heaters in the common areas. The directors mindful of the costs of running such heaters wish to keep the heat level down. However some owners, and more often or not tenants wish the temperature to be higher. Has anyone had any experience of this and can recommend a minimum temperature. " - D Bodycpmbe , DA9

the answer is it would be unlikely that the lease requires there to be heaters int he common parts 99% of blocks do not have heaters in the common parts if one were to choose what temperature they should be at I would suggest adopt the usual temperature level recommended for BEDROOMS as opposed to living rooms which is in the region of 16 degrees

Question

"Q1: In broad terms what might the valuation approach be to sell a balcony to a flat and give them the right to enclose it subject to planning permission etc when their current legal status is a right to use the balcony only. Q2: We live in a 5 year old development and have problems with the property developer repairing loose and leaky roofs on these three buildings. Crest sold the freehold to a leaseholder-owned freehold company, but some of these problems predate this changeover. Q3: The management company is supposed to run the development on behalf of the freehold company, and the management company deals with the hiring and firing of the agent. it seems that the freehold company can only step in if the management company are failing to do their job. I do wonder what power the 3 freehold company directors have in forcing an agent change, without having to propose a resolution of all members (which we are far from certain would be successful). Incidentally, there does not appear to be anything in the management company's articles of association requiring management company members to consent to a change of agent - it seems to be simply a board decision. There is however a requirement to consult members only when something will cost more that 250 per flat (ie. exceeds approx 15,000), but I don't think this applies to a change of agent? " - N Bedford, NW6

ANSWER 1: In broad terms the valuation approach might be Added value to property from the extra floor space (post development) Less build costs = Equals residual land value to be shared between the parties The residual land value of the balcony is released by the marrying of 2 legal interests under the principles of marriage value the benefit might be split 50 : 50 ANSWER 2: The developer should have given you an NHBC, Buildmark or Zurich Guarantee which covers different building elements for up to 10 years. Roofs is usually 2 years for gutters and flashing and 10 years for structure. There are 4 legal routes which can be followed and there are protocols to follow. The developer is accountable to you despite the freehold having been sold as they have duties under the Defective Premises Act in 'contract law' to the 1st purchaser and also duties under latent defect legislation The route map should be 1. The Agent should have formally written to the developer And you should ask for copies of these letters. There is a contractual obligation to give Crest the opportunity to carry out the remedial works or not 2. Your Agent should get the remedial works quantified, expert surveyor, as the defect needs to be benchmarked to (a) building regulations and (b) against build defects as opposed to lack of maintenance issues. The quantified remedial works should also be presented to Crest giving them a last chance before you pursue your remedies in either: A). County Court claim for 'actual financial loss' if they non action forces your hand to do the works B) ' or Construction Tribunal Claim You don't actually necessarily need to do either as if this does not wake them up then you lodge the issue with NHBC, Zurich or the Premier warranty. This will cost you nothing but will cost the developer. The guarantee people will inspect and adjudicate and have the power to spend the developers money. The drawback is that usually there is a 950 excess on claims and if 10 flats in a building they will deduct 10 x 950 - 9,500 from the cost of the works. But going to the guarantee will show the developer you mean business. Depending on the outcome you may be able to still continue to County Court if you can prove that you (the FH company) with the covenants to manage the building inherited a roof not fit for purpose. Time is of the essence as sometimes the claim can be marginalised to just original purchasers as subsequent purchasers do not benefit from the same contractual rights to build quality that the original buyers do. In any event the limitation period is 6 years. If you Agent is not giving you advice like this and setting out a route map you are being fobbed off, probably until you loose certain contractual rights. All developers have a 'commercial director' whose entire day job is dealing with such issues. Ask for his name and the correspondence with him. If there is none then your issue is not properly on the developer's radar. ANSWER 3: There is some merit to the freehold company forcing the issue but as always decisions by agreement are preferable. You do not need agreement of all members to change agent - just 51 percent of the Board. Changing an agent does not need members consent nor does changing the cleaner. Both are hired help. The 250 consultation applies to "works" not professional help

Question

"In our block of 8 flats,we have a proposal to obtain a gas barbeque. Can you advise on the regulations we have to abide by on this, or indicate the appropriate legislation etc. " - N Philip,

These matters usually fall to the estate regulations - a typical version of estate regulations are available on request from Ringley. Essentially the usual approach is: 1) only permit organised parties, organised by the FH or Residents Management Company 2) if a private party is to be agreed to then require a deposit for damage or burn marks to the grass etc.... 3) gas should not be kept near a building in any quantity, so storing this well away from the property at the end of the garden may be a condition 4) who will clean it - is the likely problem - if nobody, then it will soon become a rusting eyesore Gas canisters are a hazard but a normal hazard that millions of households would consider a fair and normal risk (1 canister for 1 BBQ)