We Get an Agent and the Right to Manage!
I had already attended a number of meetings held by various leasehold organisations and the one that was the turning point for Wellington Mansions was held by the Campaign for the Abolition of Leasehold (CARL) in 2006. I had already been on their panel a couple of times but this time I was an audience member. I took my partner to this one and we were both impressed by the talk about buildings insurance given by guest speaker Roger Southam, CEO of Chainbow. At the end of his talk he asked the audience if they had any questions and jokingly my partner asked ‘will you come and manage our block please? He invited us to come and chat to him at the informal drinks that were held after the meeting and to our complete surprise he agreed to take us on.
Not only that, but shortly after we met the criteria for the Right to Manage, a ‘no-fault’ process allowing leaseholders to either replace their own managing agent with one of their own choosing or self-manage. No premium is payable and there is no need to go to court to prove ‘fault’ on the part of the freeholder. Establishing the company started with a meeting at the offices of our new managing agent. Not all the qualifying leaseholders were required to attend, just enough to provide a minimum of 2 directors and a company secretary. We had 5 qualifying leaseholders attend with three of those five agreeing to act in the capacity of two Directors and the agent as Company Secretary.
All were formally appointed by Board resolution and their details and signatures entered onto the application form for registering a new company. This was then filed with the Registrar of Company at Companies House and the company was also registered as a company limited by guarantee, more on which can be read here.
It was also decided that due to my leasehold knowledge I should be the communications link between the company and the managing agent as both Directors were in full time work.
The next step was that of serving the notice of participation on the other qualfying leaseholders who did not attend the initial meeting, and inviting them to become members.
The steps we didn’t have to adhere to as a result of having no freeholder were those of serving the claim notice and the right of access notice, and any management contract notices etc. Nor did we have to be concerned about rejected claims and unspent service charge monies and we also had no freeholder voting rights to concern us either.
On acquisition date our company took control of the management functions that should have been exercised by the former freeholder along with our new managing agent and myself. Under legislation these functions are described as ‘functions with respect to services, repairs, maintenance, improvements, insurance and management. What functions these are will depend on the type of the buidling but will usually include:
- Repairs, redecorations and the seasonal maintenance of the common parts;
- Services to the common parts such as lighting, cleaning, and grounds maintenance;
- Cyclical and seasonal maintenance of the structure of the building;
- Maintenance of plant and facilities, lifts, central heating, boilers etc.;
- Building improvements (if the lease includes them);
- The provision of caretaking and porterage, warden services in the retirement sector etc.;
- Arranging buildings insurance;
- The levying and collection of service charges;
- Service charge accounting;
- Compliance with all statutory requirements relating to the management and fabric of the building;
- Day-to-day management of the building.
There were however two requirements of the RTM legislation that were designed to ensure that no breaches of the lease were being committed and to report to the freeholder any that were. These were s100 (enforcement of tenant covenants) and s101 (tenant covenants: monitoring and reporting).
We knew long before we secured RTM in 2007 that our block was subjected to uncontrolled subletting and our difficulty lay in establishing just how many landlords had council or private tenants. Our leases don’t contain a key clause found in many newer leases which is that of not allowing the sub-letting the whole of the flat to a Housing Association, Local Authority, (or any other body whose objects include the provision of housing accommodation). Data protection was an also an issue when it came to finding out which flats came under council remit or were private lets.
It wasn’t going to be just our own council housing tenants on our block either but other councils under reciprocal arrangements, i.e. if one council ran out of properties, they could contact another to make up the shortfall.
So whilst we got enforcement powers to sue for debts, the ability to seek injunctions for breaches (such as repairs or nuisance), and the right of entry into a property for the compliance of covenants, we also needed to deal with the rogue landlords and problem tenants we inherited because of the uncontrolled subletting. There were also the legal issues surrounding the accessing of rented flats.
So the first of our landlord and tenant nightmares can be read here