Owning and Managing a Listed Building

Owning and Managing a Listed Building is considered by English Heritage and the Government to be a building of special architectural or historic interest, and worthy of protection. Houses are the most common buildings to be ‘listed’ but listed buildings range from major structures, walls, to individual boundary stones or lamp-posts.

Inclusion on the statutory list protects the exterior and interior of buildings from all types of inappropriate and unsympathetic alteration, under the Planning (Listed Buildings and Conservation Areas) Act 1990.

Buildings are listed to ensure that their “special interest” is passed down to future generations in good condition. The longterm interests of a historic building are best served by keeping it in use, and listing protects buildings while allowing appropriate positive change to occur.

Who decides?

The Government decides which buildings are included on the statutory lists, based on recommendations by English Heritage. Anyone can suggest buildings to English Heritage, using a simple form available on their website, but a building will only be included on the list if it is judged to be of special interest after being visited and assessed by an English Heritage inspector. You can visit www.englishheritage.org.uk for more information. If a historic building that may be worthy of listing is under threat, the local authority can serve a ‘building preservation notice’ on the owner and occupier. This ‘lists’ and protects a building for six months pending a decision by the Government as to whether it should be added to the statutory list.

It is a criminal offence to carry out work to a listed building, other than minor like-for-like repairs, without first obtaining Listed Building Consent, and it could lead upon conviction to a period of imprisonment and a very heavy fine.

What grade is it?

There are around 374,000 listed buildings in England. Buildings are classified into grades to indicate their relative significance:
Grade I (one) Buildings of exceptional interest – about 2.5% of all list entries (note: this can include whole terraces as just one entry) in England.
Grade II* (two star) Particularly important buildings of more than special interest – about 5.5% of all list entries in England.
Grade II (two) Buildings of special interest which warrant every effort being made to preserve them – the remaining 92. Each grade is equally protected under the planning system, the main difference is that English Heritage must be consulted on applications for works to buildings of grade I and II*

What alterations need consent?

Listed Building Consent is required for any alteration which materially affects the ‘special interest’ of a listed building. For example, consent would normally be needed for any of the following alterations:
• Adding an extension or rebuilding walls in different materials.
• Changing the roof pitch or roof covering materials.
• Inserting roof lights, removing, altering or adding dormer windows, adding solar panels or other microgeneration equipment.
• Altering or removing chimney stacks and pots.
• Covering existing wall surfaces e.g. with render, cladding or paint.
• Changing the size of door, window or other openings.
• Altering window frames or doors, replacement with different types, including replacement of singleglazing with double-glazing.
• Removing historic features e.g. door cases, chimney breasts.
• Forming new openings for any reason, including boiler flues.
• Changing the material of any rainwater goods.
• Adding any feature including porches, signs, satellite dishes,

security alarm boxes, CCTV cameras or external floodlights.
• Inserting cavity wall insulation.
• Works to boundary walls.
• Works to buildings in the grounds that were present in 1948 and at the time of listing.

• Altering the plan by removing or adding walls or forming new openings.
• Taking out or altering original features including staircases, fireplaces, decorative plasterwork, panelling, shutters, doors, architraves and skirting boards.
• Installing new ceilings, partitions, doors and secondary glazing.
• Filling in cellars, or digging out cellars to increase usable floor space.
• Removing or replacing floors or floor finishes.
• The obliteration of wall paintings, decorative tiles and mosaics.
• Installing new ducting, waste pipes and openings associated with new bathrooms.
• Inserting damp proof courses or tanking systems. Some works that require Listed Building Consent may also require Planning Permission or Building Regulations approval. You should check with the council before you apply for consent.

Listed Building Maintenance

If you own a listed building you should keep it in reasonable repair. The most important element of caring for historic buildings is maintenance, which if undertaken regularly can avoid the need for repair or restoration work altogether, saving you money and time, and sustaining the historic fabric of the building into the future. By establishing the nature, extent and cause of any problems at an early
stage by carrying out regular inspections, owners will have the opportunity of remedying defects promptly and economically.

Damp problems, in particular, can often be remedied quickly and without using expensive and invasive damp proofing methods. Damp is usually the result of water getting into a building, for example through a leaking or blocked gutter. If the water source is removed and the building left to dry out naturally, the problem will normally be resolved. The inspection of a large house or similar sized building may well be within the capability of the average owner but if historic buildings are of particular importance or complexity, it may be necessary to employ experts from different specialisms to design appropriate repairs.

IPM have experience in managing a range of listed buildings and objects from a listed mill, a clock tower, a chess board and many other listed properties within their portfolio. If you would like to discuss your listed building and are looking for an expert in managing this type of property or development, please get in touch with a member of our team.

What is Right-to-Manage (RTM) and how can we start it?

If you are a first-timer, living in an apartment you may be confused by all the terms batted around like RTM, freeholders, leaseholders, managing agents.

So what is RTM?

Management is generally seen as those duties bestowed upon the landlord under the lease agreement that relate to the up-keep of the building and the legal governance of the property. In practice this means the collection of service charges to fund maintenance works and services while at all times being accountable to the leaseholders of the building.

Having the right to manage means that the leaseholders can force the landlord to give them the collective power to assume block management responsibilities through a limited company. This gives the owners of the flats much greater control over how their money is spent and what happens in the building.

Do I qualify for RTM?

Not all service charge schemes will qualify for the Right to Manage. For practical reasons RTM is restricted to certain blocks of flats. To qualify the building must:

  • be at least partly self-contained
  • have at least two leasehold flats within the property
  • have no more than 25% floor area non-residential
  • have at least two thirds of the leaseholders with leases longer than 21 years

50% or more of the qualifying leaseholders must also be in favour of becoming a member of the RTM Company. (For detailed information on the qualifying criteria, see the link at the bottom of this post.)

How easy is it to do RTM?

Two important notices must be served in accordance with the law to ensure the RTM Company is compliant. There are also considerations with the land registry that need to be addressed. For these reasons you should look to appoint a professional firm to help with the process.

How long does RTM take?

In most cases an RTM application will take about five to seven months from start to finish. It may take longer if the landlord decides to contest your application.

If I have a Right-to-Manage Company will I still need a managing agent?

In most cases yes.

When the RTM process has finished, the Directors of the RTM Company (usually volunteer flat-owners) will suddenly have the burden of block management responsibilities for the entire building to deal with. Having a professional agency to assist with billing, legal issues and maintenance makes sense therefore. Having said that, it is recommended that the Directors maintain an overview of their managing agent and ensure that important matters such as setting the budget are agreed jointly.

If I exercise my Right-to-Manage will my service charges go down?

In many cases, yes. In some cases, no.

Some freeholders charge well above the market rate for certain services owing to their indifference to leaseholders. Exercising the RTM will give leaseholders the opportunity to re-tender certain services and in some cases achieve big savings.

Buildings Insurance is commonly an area where costs are likely to go down. Conversely, some freeholders may have been under-investing in the property meaning that resident directors may decide to increase their service charges to get the building back up to standard.

Either way, the value of control is the main benefit to the leaseholders.

In Conclusion

Running a building through a Right to Manage Company is a much fairer and more democratic form of block management than the traditional freeholder-controlled model.

The RTM Company will be subject to a written constitution and must be transparent with its finances. In addition, all leaseholders have the right to be elected to the board of directors for the company. It is advisable for an AGM (Annual General Meeting) to take place each year to elect and re-elect the directors.

If you wish to obtain more information on taking over your block through the RTM process, or you have an RTM company which you’re looking for help with, please contact us for details.


Alternatively, below is arguably the most in-depth source for leaseholders to refer to, courtesy of The Leasehold Advisory Service.




Winter Maintenance for your Development Landscape

Do not slack on apartment landscaping maintenance during winter months or you could be paying an ugly price in the summer.

The winter months do not obviate the need for apartment landscaping maintenance. Giving lawns, plants, trees and shrubs the attention during this time ensures that the development grounds transform into lush and colourful landscapes when spring arrives.

Outdoor space is extremely important in keeping the feel and look of a development. Giving in later months a place for people to meet and relax. In the colder weather sprinkler systems left on can be particularly susceptible to temperature changes. Freezes can damage pipes and require immediate attention, so it is best to periodically check the system for leaks using zone-by-zone tests. Drain and test winterized systems zone-by-zone for repairs prior to spring.

With warmer temperatures, the potential for earlier germination of weeds is certainly possible. Apply herbicides and fertilisers now to fight weed germination that typically begins in April in slightly warmer climates.

Additionally, the landscape will need nutrients that it may not otherwise get from normal rainfall. Apply a slow-release fertilizer to ensure the lawn and vegetation has everything it needs to blossom in the spring. About half of the nutrients and nitrogen release in the initial application to give the landscape a jump. The rest will release over the next few months and stabilise growth. Green grass always looks better than brown!

Take advantage of those warmer days to do general clean up around the grounds. Clean leaves and dead plants out of beds and cut back grasses. The landscape will have a head start for new growth when warmer temperatures return for good.

For more tips on making the most of your development and to see how we uniquely manage many developments across the UK, why not get in touch with the Inspired Property Management team 01302 729500.



Service Charges Explained

What are service charges?

Service charges are fees that most leaseholders pay to cover their share of the cost of maintaining the building they live in.

Service charges usually cover the costs of:

Repairs to shared areas and the outside of the building, such as roof, external pipes, drains
Buildings insurance.
Freeholders’ administration or management charges

They can also be used to pay for shared services such as a caretaker, cleaners and the maintenance of shared areas.

You usually have to pay a share of everything even if you don’t use some of the services. For example, if you live on the ground floor and never use the lift, you probably still have to pay something towards its maintenance.

Which service charges you must pay?

Check your lease to see what service charges you must pay.

Your lease may set out in detail the services that you can be charged for.

It may also have a section that covers general services not specifically mentioned in the lease.

If your lease doesn’t have this type of clause, you don’t have to pay for anything that isn’t specifically included in the lease.

The lease may allow the freeholder to charge a reasonable management fee.

Cost of service charges

Service charges are usually variable. This means that the amount you pay changes each year.

Your lease should say:

  • what services you have to pay for and when
  • how your freeholder can collect the charges
  • how service charges are calculated
  • how they are divided between you and any other leaseholders
  • whether there is a sinking or reserve fund

Payment of service charges

Service charges can be paid annually or more frequently. Your lease sets out when you should pay yours.

You don’t have to pay service charges until the freeholder sends you a:

Request for payment
Summary of your rights and obligations
Your freeholder must send you a summary of the service charges if you write to them and ask for it.

You can then ask to inspect and take copies of the accounts, receipts and other relevant documents. The freeholder must allow this within one month of your request.

Sinking funds

Many leaseholders have to pay towards the cost of future repairs. This is called a sinking fund or a reserve fund.

Leaseholders are required to pay a certain amount every month or year to build up the sinking fund. You usually pay this as part of your service charges.

You only have to pay into a sinking fund if your lease says you have to.

Sinking funds provide a way to spread the cost of expensive works on your building.

If you sell your home before the money has been spent on repairs, you can only get a refund if your lease says this will happen.

You could agree with your buyer that they pay you a sum to cover what you have paid in to the fund.

Get advice if you want to set up a sinking fund. You need a formal agreement with the freeholder and all the other leaseholders.

Charges for major works

Your freeholder has to consult you if they are going to:

Set up a service such as gardening or cleaning that will cost you more than £100 a year
Carry out a repair or improvement that will cost you more than £250

Before arranging these repairs or services, the freeholder must:

  • Tell you what work they plan to do and why it is needed
  • Provide an estimate of the total cost of the work
  • For a repair or improvement the landlord must obtain at least two estimates.

You have the right to comment on what is being proposed and can usually suggest alternative contractors.

If the repairs needed are urgent and essential, the freeholder can go ahead before you have had time to comment.

If you were not properly consulted, you can take legal action through the tribunal. It could decide that you don’t have to pay for all of the service charge.

Get advice if you are in this situation. Contact the Leasehold Advisory Service.

Most leaseholders pay a service charge to cover the cost of maintaining the building they live in.

What are service charges?

Service charges are fees that most leaseholders pay to cover their share of the cost of maintaining the building they live in.

Service charges usually cover the costs of:

  • Repairs to shared areas and the outside of the building, such as roof, external pipes, drains
  • Buildings insurance
  • Freeholders’ administration or management charges
  • They can also be used to pay for shared services such as a caretaker, cleaners and the maintenance of shared areas.

You usually have to pay a share of everything even if you don’t use some of the services. For example, if you live on the ground floor and never use the lift, you probably still have to pay something towards its maintenance.

Which service charges you must pay?

Check your lease to see what service charges you must pay.

Your lease may set out in detail the services that you can be charged for.

It may also have a section that covers general services not specifically mentioned in the lease.

If your lease doesn’t have this type of clause, you don’t have to pay for anything that isn’t specifically included in the lease.

The lease may allow the freeholder to charge a reasonable management fee.

Get advice if your lease doesn’t give enough information about service charges. You may be able to ask a tribunal to change it.

Cost of service charges
Service charges are usually variable. This means that the amount you pay changes each year.

Your lease should say:

  • What services you have to pay for and when
  • Whether there is a sinking or reserve fund
  • How service charges are calculated
  • How they are divided between you and any other leaseholders
  • Whether there is a sinking or reserve fund
  • Payment of service charges

Service charges can be paid annually or more frequently. Your lease sets out when you should pay yours.

You don’t have to pay service charges until the freeholder sends you a:

Request for payment
Summary of your rights and obligations
Your freeholder must send you a summary of the service charges if you write to them and ask for it.

You can then ask to inspect and take copies of the accounts, receipts and other relevant documents. The freeholder must allow this within one month of your request.

Contact the Leasehold Advisory Service for more information on service charges.

Problems with service charges

Common problems with service charges include:

work not done or done badly, for example you may be paying for weekly cleaning but the building is not: Cleaned regularly
Charges are too high
No information on what service charges are being spent on
Being charged for things not covered in your lease
Contact your freeholder if you are unhappy with the services you are paying for. You may be able to negotiate a lower price or a better service.

Court action by freeholders over unpaid service charges
If you don’t pay your service charge, your freeholder can apply to the county court and in theory you could lose your home.

The freeholder has to follow special procedures and get a court order to repossess your home because you haven’t paid your service charge.

Apartment Living Horror stories – Beware…

Living in an apartment can be total bliss, once you’ve found your dream place and made it your home, whether you are a resident or manage a block, you need to make sure you are fully aware of some of the horrors which can surface if you’ve not done your research!

From nightmare neighbours to spine-chilling service charges, you should be aware of the frightening facts that you might not expect or have overlooked before signing your lease.

Here are some of the terrifying facts you should know about living in or managing an apartment block. 

1. Discovering that the building is under-insured when you suffer a major loss, such as a fire can be horrific for the people involved knowing they can not recoup the full value of their losses.

2. Buying a short lease on a flat in a prime central London location, only to discover how much you’re going to have to stump up for a lease extension!

3. Being the property manager of a prestigious development block and spending three hours at a residents’ association meeting where they’re still discussing item one of the agenda – whether the trees should be trimmed or not!

4. Realising that the apartment owners in your building are all Airbnb addicts, who are infact sub-letting their own apartments and using your concierge as a hotel porter and having loud parties every weekend.

5. Returning to your penthouse apartment on the 15th floor, weighed down by luggage to find the lift is broken.

6. You overlook charging the residents for major works which took place more than 18 months ago and find out that you can only recover £250 per resident.

7. Realising that your property manager has been using your block’s sinking funds and you now have nothing to carry out urgent repair works.

8. Discovering that your tenant has been keeping a family of black sable ferrets in their flat even though pets are prohibited in their lease and they’ve been breeding uncontrollably!

9. Having taken over the management of the smallest building in your portfolio, which has the most difficult leaseholder, you spend most of your time having to deal with them on the phone or in person, over stones from the driveway or leaves on the paths.

10.  Being the third manager to be appointed by the courts of a building in disrepair with no sinking fund and the residents cannot afford any uplift in service charges – and they all hate each other and can’t agree on any works! Total nightmare…

We all have horror stories but it’s how we deal and manage with situations. You should always be prepared when it comes to having all the facts as a leaseholder and knowing what your responsibilities are if you decide to be part of a Residents Management Committee.

A good block property managers will assist you in ensuring your property is managed efficiently and all issues are dealt with quickly, for more information about how Inspired Property Management could alleviate some of your horrors get in touch with one of our expert property managers today by calling 01302 729500.

Does building development interfere with the rights of an RTM company?

If a Landlord’s decides to develop a building, what will be the impact on the RTM Company be and what rights do they have?

When an RTM Company acquires the right to manage a block, they take over responsibility for the performance of management functions in respect of that block. Management functions are functions in relation to services, repairs, maintenance, improvements, insurance and management. The Landlord is prevented from doing anything that the RTM Company is either required or empowered to do (except if the parties agree).

Often, leases reserve a right for a Landlord to develop neighbouring or adjoining property, despite the fact that this may affect the demised premises. A landlord’s right to develop its property is in conflict with the rights of a right to manage company to manage the building and perform those management functions.

This tension has recently been considered by the County Court in Francia Properties Limited v Aristou (Unreported). Reported by Cassandra Zanelli from Taylor and Emmet Solicitors.

Relevant Facts

In this County Court case, the Landlord sought a declaration from the Court that it was entitled to develop a new flat on the roof space of the building. The lessee of the current top floor flat objected, as did the RTM Company.

One of the issues considered by the County Court was whether the construction of the new flat would interfere with the management functions exercised by the RTM Company.

Decision of the County Court

The County Court agreed to grant declaratory relief in favour of the landlord.

It was agreed between the parties that the roof and roof space of the building were retained by the landlord.

The Court decided that in the absence of an express of implied prohibition, a Landlord is entitled to use its retained land as it pleases. The roof was part of the Landlord’s retained parts, and therefore the Landlord was entitled to develop it.

Although the roof and roof space formed part of the buildings over which the RTM Company exercised the management functions, the RTM legislation does not take away property rights from the Landlord.

Essentially, what the RTM Company was required to do was manage the roof of the building. Although this would be affected by the works needed to build the new flat (and would change the size of the building and therefore the responsibilities of the RTM Company), this was not an absolute bar to the works.

The tension between the Landlord’s right to develop and the RTM Company’s obligation to perform the management functions could be resolved by allowing the landlord to carry out the works so long as the Landlord took all reasonable steps to minimise the disturbance to the management functions of the RTM Company both during and after the works.


This decision (albeit at County Court level) provides some guidance on how the tension between a Landlord’s proprietary interests (and right to develop) and the rights of an RTM Company can be reconciled.

We understand that permission to appeal the decision has been granted!

What is a Section 20 Notice?

So you are going through your daily post and find an envelope from your managing agent. You open it up to find something called a Section 20 notice of intent telling you that your Landlord (Freeholder) plans on doing some pretty major works to the building.

The problem is that not many people know about the Section 20 consultation process, nor do they know what their rights are and how the whole process can impact them.
The Section 20 consultation process generally has three stages:

  • A notice of intention
  • Notification of estimates
  • Notification of award of contract

Let’s break it all down then and let you know what it is, what it all means for you and how it can be beneficial to you and the rest of your neighbours.

What is the ‘Section 20’ law?

When you hear your managing agent mentioning ‘Section 20’ they are referring to Section 20 of the Landlord and Tenant Act 1985 as amended by the Commonhold and Leasehold Reform Act (CLRA) 2002, excuse the mouthful there.

The intent behind the law was to give some protection to residential leaseholders so they may be duly consulted on any works that would eventually cost them more than £250.

(Section 20 law covers two parts, one for any major works that cost over £250 per leaseholder and then one part for long term contracts which we will cover in another article)

The law also enables a cap on the amount any leaseholder will pay if the Landlord does not carry out the required consultation.

To put clearly, if your Landlord does not carry out the consultation process as the law requires, you will only have to pay £250 towards the works, whatever they may be.

So what does your Landlord have to do?

What is the consultation process?

Your Landlord is required to carry out consultation with you which is broken down into (typically) three stages:

Stage 1 – Section 20 Notice of Intent

This is the more than likely the notice you have just received which has led you to this article. The Notice of Intent must include the following three pieces of information:

  • Describe generally the works that will be undertaken
  • The reasons why the works are required
  • An invitation for any comments or observations on the above information

To be clear, when we say comments or observations, this means you can make suggestions on any additional works you think needs attention, any companies you think the managing agent should ask for a quotation and so on.

You will be given 30 days from the date of the notice to provide any comments or suggestions so you do need to act quickly as soon as you receive this notice.

Stage 2 – Notice of Estimates (also known as the Section 20 or Paragraph b notice)

After the Notice of Intent’s 30 days are up, your managing agent will then send you a Notice of Estimates. This notice will also contain a breakdown of any comments or suggestions they received from the first 30 days’ consultation so you all can see what is being said.

The Notice of Estimates needs to include the following:

  • At least 2 quotes for the work (and only 1 estimate needs to be independent of the Landlord or Managing Agent)
  • Any comments / observations from the first notice of intent
  • Details of where the specification and quotations can be reviewed (office address, hours of opening etc)

As with the Notice of Intent, you have 30 days from the date of the notice to provide any comments or suggestions on the quotes you have been provided.

Stage 3 – Notice of Reasons

Now this notice is not always required however if the Landlord / Agent decides that the lowest quotation received will not be the one chosen to carry out the works, then this notice must be sent to explain the reasoning behind the decision.

Why am I getting a Section 20 notice?

As mentioned above, the Section 20 consultation process is only valid when there are works to be completed when your total contribution is over £250 (including VAT). This means that if there are 60 flats in your building and there are works that will cost £15,000 + VAT in total, your Landlord will have to complete the consultation or run the risk that you will only be liable to pay a maximum of £250 towards the project.

At times this consultation can be a nuisance, for example, imagine being in a building of 4 flats. For any work that is £1,000 + VAT in total, the landlord will have to complete a minimum 60 days’ consultation. Realistically, £1,000 + VAT is not a huge amount when it comes to repairs and therefore it can become a drain on efficiency.

How long does a Section 20 Notice last?

Whilst there is no specific law that states how long a notice lasts, there is precedent to state that a delay in the progression of the consultation process may allow changes in the ‘general situation’ of the building which could lead to problems in recovering the contributions from each leaseholder.

For example, if a project is delayed by two years, flats may have been sold in that time, it may cost more for certain aspects of the project, the building condition may have worsened in the time it’s been delayed.

These would all be possible reasons for a Landlord to re-commence the consultation process in order to avoid problems further down the line.

Where can I get more information on this Section 20 notice?

There is a plethora of information out there available from formal guides to the Section 20 notices and consultation process to blogs covering the most recent case laws.

Below we have compiled a few links that you may find useful to read through:

  • The wording of the Landlord and Tenant Act itself can be viewed here.
  • Association of Residential Managing Agents guide to the section 20 process is here.


If you need any further information or maybe you have questions regarding your current project or the section 20 notice you have received, simply give us a call and we can either help you or connect you with an appropriate person.

Green Dream For Your Apartment

So you’ve achieved your dream of a stylish apartment but you want to maximise your minimal outdoor space. What can you do to make your balcony greener and what works best in various size spaces?

Firstly before you go ahead with any balcony makeover, check in your lease what you can and cannot do on your balcony as your landlord may have some restrictions on furniture or plants.

If you have the green light, so to speak for your green space here are some ideas and inspiration to get you thinking about your outdoor space. Use planting of different sizes or try some creative ways of hanging different types of plants to create a green wall. Flowers planted in a box that hangs on the balcony rail work well, which avoids taking up valuable floor space. Or you could try a railing-mounted table to provide a great perch for a glass of wine without cluttering up the balcony with table legs. Check out some more ideas from WooHome website.

Small-Balcony-Garden-ideas –  Garden Image from the Balcony Gardener © CICO Books
Small-Balcony-Garden-ideas-with-rug – source of image Rue Magazine

Now, go an have some fun and create your own green oasis for your apartment. For more information about your lease please log onto the tenant portal found on our website.

What Are RMC’s Responsible For?

IPM explore what it means when you are a Director of an RMC.

So each year you pay an amount of money to your property managing agent. You get a budget with lots of categories, which you may be unsure of. You then get a set of accounts saying what the property manager has spent your money on after the year is over.

What are the Directors of Resident Management Companies (RMC) responsible for?

Fundamentally, the Directors of your RMC must act in a way that promotes the success of the development to which they are a Director of.

They have the responsibility to make decisions that are in the best interest of the company members (usually the leaseholders) have to justify their reasoning. What this means is that the Directors must make the best decisions possible for the development.

Managing Agents Financial Update

Most Directors of RMC’s meet on a quarterly basis to review various information and factors, including the financial health of the building.

Below are the financial reports you must receive:

  • Budget vs Spend to date
    This is an ongoing report highlighting what was budgeted for at the beginning of the year and what has been spent in that category up to a specific date. Ideally the amount spent to date should tally up with the amount to be spent for the rest of the year
  • Service Charge Arrears
    This is probably the most important report. Service Charges are the essential component of the management service income which is required to invest back into the development.
  • Cashbook report
    It is important to find out the ‘cash flow’ status of the building. A periodic cashbook is essential to Directors. Clear analysis of exactly where money is being spent can allow Directors to make better financial decisions for the building over the financial year.
  • Bank Balances
    A simple summary which compliments the other financial reports above. With buildings potentially having multiple bank accounts for service charges, reserve funds, sinking funds, an overall view of the balances can be a useful insight.

Your Managing Agents Maintenance Update

With the financial information being of upmost importance, it is essential to review this first.

After that has been completed, your Managing Agents now need to provide an update on maintenance and strategy, both completed to date and for the rest of the year.

Upon commencement of IPM’s management service our team hold regular meetings with leaseholders. This enables us to ensure we manage any requests, maintenance issues or concerns. promptly to reduce time and cost to all parties.

With the latest in property management software you can view, pay and manage all matters to do with your development on-line using our tenant portal.

The Hidden problems for Landlords with Airbnb

With research suggesting that London will become a nation of renters in the next decade, there is one type of tenant that is starting to cause problems for Landlords and residential block management companies specifically in London.

Airbnb is a new way of renting your home and has grown in rapidly in popularity. Their website allows you to list your apartment as a whole or even a room in your home, to rent out to others for long or short periods of time. According to their website, they have around 1.5 million listings across 190 countries (bear in mind, there are only 195 countries in the world).

So why is this a potential problem for Landlords?

Let’s look at 3 reasons why AirBnB may not be the best decision for your flat or the building as a whole:

Renting out the flat may be a breach of the lease

When you bought your flat you signed a Lease, right?

Well, that Lease will have covenants or obligations on how you can use the flat as well as any restrictions within your lease.

Whilst there is no such thing as a standard Lease, there are certain covenants that tend to come up again and again.

Some of these restrictions cover any subletting of your flat, which may include:

  • If you require permission from the Freeholder to rent your flat out
  • How you can rent your flat out (i.e. minimum rental periods, holiday rentals etc.).
  • Any restrictions on noise in the flat
  • Any obligations for living in the apartment (i.e. providing access to the Freeholder, disposal of waste and so on)
  • Any house rules that may apply (which can include no Airbnb rentals)

Ignorance is no excuse and there are serious implications to breaching the Lease covenants so you need to make sure you review your Lease before agreeing to any Airbnb lets.

Airbnb may impact the building insurance

Building insurance policies do vary so we can only provide a warning from a general point of view but you do need to check your own individual policy.

Part of the service charge you pay each year will be for your building insurance premium, which is dependent on the ‘risk’ associated with the building.

In part, the residents of the building make up an element of that risk and therefore should you rent out your home to an Airbnb guest then this may increase the risk, in turn either increasing the amount of risk to the building and / or increasing the overall premium.

Worst case scenario, something happens and the insurance policy does not cover the cost based on there being an unknown tenant.

If you have a mortgage on your home, you should also check with your mortgage provider that you can provide a short term let otherwise you also run the risk of breaching your mortgage agreement.

Liability for damages caused to communal areas

So here is the scenario, you decide to rent out a room in your home whilst you are away on holiday, you decide to take out the Airbnb Host Guarantee which will cover you for up to £600,000 worth of damages to your home.

There are exceptions to this Host Guarantee such as cash, pets and certain valuables that are not covered but £600,000 is a sizable amount to cover most issues, right?

Well what happens if your Airbnb tenant causes damage to the communal area?

This could then be you who is held responsible for the cost not the tenant from Airbnb!

Most building insurance policies can cover accidental damage to communal areas but as we mentioned above, the insurers may not pay if you haven’t informed them of the new short let.

How can Directors of Resident Management Companies stop allowing Airbnb lets?

There are two main ways in which a Director of a Residents Management Company can prevent harmful Airbnb rents, a legal way and a non-legal way.

The Legal Way

As we have mentioned above, the Lease is quite clear on how a flat can be used and any restrictions that can apply so this is your first move.

Check the Leases, they may say that Landlords must seek permission to rent their flat out, have they received permission to do so in this instance? What were the terms of that permission and were there any restrictions on minimum rental lengths?

With any contract, it’s important to make sure each party, the Residents Management Company and the Landlord are clear on what they are allowed to do and more importantly, what they aren’t.

If there are restrictions in place or permission is simply not been provided, we suggest you broach the subject in a polite notice asking for resolution to the problem. Usually these types of matters are simply an oversight and can be quickly resolved.

Whilst it may be causing problems having Airbnb tenants coming and going, do not start by sending legal desist letters to the Landlord in question. This will only make matters worse and remember that you live in a building that has a community of flat owners, it’s about working together for the overall benefit to the building.

The Non-Legal Way

Residents Management Company are typically formed of the individuals that own a flat in the building, therefore you all naturally have a commonality between you.

It seems logical therefore that the Residents Management Company can agree on a set of house rules, even if these are not supported by the formal Lease terms.

Yes, these can become complicated with new owners but with an engaged approached to all owners in the building, highlighting the problems that short term lets can bring, this can be a low cost, friendly approach.

Airbnb is not all doom and gloom however, it has opened up a new way to experience the world as well as a new business opportunity for portfolio Landlords.

Do not get caught out, check whether you are allowed to rent your flat for Airbnb guests before doing so and you will keep a lot of people happy.