Government launches new service for leaseholders to track Building Safety Fund progress

Leaseholders will be able to track their building owner’s progress on remediation through a new online service, the Department for Levelling Up, Housing and Communities (DLUHC) has announced.

Through the new Leaseholder and Resident Service, which aims to speed up the process of removing unsafe non-aluminium composite material (ACM) cladding from the highest-risk buildings, leaseholders in tower blocks will have access to updates on the status of their building’s application to the government’s Building Safety Fund.

As part of the process, leaseholders will be given a unique code to track their building’s progress.

The government said the online portal, launched today, will expose building owners who are failing to take action to fix their properties by making the process more transparent.

The move follows housing secretary Michael Gove’s building safety announcement last week, during which he promised leaseholders statutory protection from non-cladding costs.

He also said he would force developers to foot a £4bn bill to remove unsafe cladding from buildings between 11 and 18 metres tall.

The Building Safety Fund was launched in May 2020 after chancellor Rishi Sunak announced that the government would be providing £1bn in funding to remove dangerous non-ACM cladding from buildings taller than 18 metres.

In 2021, the government announced that it would be increasing the funding by £3.5bn.

But the latest figures from the DLUHC, published today, show that progress is slow. None of the social housing blocks granted building safety funding have had their remediation work completed yet.

So far the government has approved £976m for the remediation of non-ACM cladding – £851m for the private sector and £125m for the social sector.

But as of 31 December 2021, the Building Safety Fund’s total expenditure, including both sectors, was only £219m.

Building safety minister Lord Stephen Greenhalgh said: “It is unacceptable that four years after the Grenfell tragedy innocent leaseholders are still living in buildings with unsafe cladding.”

He added that building owners are responsible for making their buildings safe.

“We will no longer allow them to shirk from their duties and hide behind processes and corporate loopholes.

“Everyone – including leaseholders – has a right to know what is happening with their building and to live safely,” he said.

Geeta Nanda, chair of the G15 and chief executive of Metropolitan Thames Valley, said that ensuring residents affected by building safety issues are kept up to date with information is “essential”.

“We welcome the new Building Safety Fund online portal, which will help ensure that the information being provided to residents on this critical funding support is as accurate and up to date as possible,” she said.

Kate Henderson, chief executive of the National Housing Federation, said greater transparency over the progress of the Building Safety Find is a “positive move”.

“Housing associations are committed to working with the government to tackle the building safety crisis and support all efforts to protect leaseholders from costs,” she added.

WHY HAS THE GOVERNMENT INTRODUCED THIS SERVICE?

The applicant for the BSF, usually the building owner or managing agent, is responsible for keeping leaseholders and residents updated about the progress of their building’s BSF application. Rather than waiting for information from the applicant, leaseholders and residents will be able to access information directly.

HOW CAN THE SERVICE BE ACCESSED?

Leaseholders and residents can access the Service by inputting a ‘unique building code’ for their building.  All applicants have been sent information about the Service and their building code before its launch and they have been asked to share this with leaseholders and residents.

In addition, each private sector resident will be sent their building code directly via the post (20-24 Jan).

If you are a leaseholder and do not have this information, you should request it from the applicant (usually the building owner or managing agent).

HOW OFTEN WILL THE INFORMATION ON THE SERVICE BE UPDATED?

All application status updates will be published on the third week of each month.

DOES THE SERVICE INCLUDE INFORMATION ON BUILDINGS WITH ACM CLADDING?

No. The Service currently only includes buildings that are part of the Building Safety Fund (BSF) which covers unsafe non-ACM cladded buildings.

The government is however considering options for providing information on ACM cladded buildings and will review feedback on the new Service to inform decisions.

In the meantime, leaseholders and residents of buildings with ACM cladding that are being remediated should contact their responsible entity (usually the building owner or managing agent) for updates on ACM projects.

 

You can find out more information on the government website.

Top cause of damp in the winter and how to treat it

Damp is something no homeowner wants to deal with. Essentially, damp is just excess moisture in your home that can’t escape and can cause plenty of problems, some costing money to resolve.

A room with damp may feel cold and unpleasant, and if ignored, it can even result in more serious structural issues. However, IPM have pulled together their top tips on how you can prevent, and even fix, damp in your home.

Signs of damp

Autumn and winter – or really any rainy, windy period with long wet spells – is the worst time for getting damp. Usually, you’re able to smell the distinctive, musty damp smell, but there are other warning signs of damp that you should be aware of, including small black or grey spots on walls, ceilings, and sealant, excessive condensation on windows as well as growing mould in hidden spots such as behind furniture.

So, where should you be checking for damp?

  • Walls and ceilings
  • Bathroom and kitchen
  • Windows
  • Furniture
  • Basements and cellars

What causes damp in your home?

Many things can cause damp, and since water and moisture tend to cause damage over time, it may already be too late once you do finally notice. If you can identify what’s causing the damp earlier, you’ve got a better chance of diagnosing and treating it.

1. Penetrating Damp

When the exterior of your home lets in water, even a small crack can cause major issues. Older houses, in particular, can face issues like weathered flashing and mortar pointing that’s falling away, allowing rain to pool and trickle in. Also, check you have no leaking or blocked gutters causing erosion.

2. Poor ventilation

Moisture does not just come from outside, every time you run a shower, leave laundry to dry, cook or wash, you’re introducing a little bit of moisture into your home, which is a top cause of damp. If this moist air can’t escape, it will build up and cause condensation. Modern homes are designed to be watertight, which is great for stopping penetrating damp, but not so great for ventilation.

3. Lack of waterproofing

Whilst older homes certainly have their charm, sadly they are more prone to having damp. Unlike more modern properties, waterproofing tends to be somewhat poor in older homes, so moisture is more likely to pass through ceilings and walls. Chimneys, in particular, can be a cause for concern. This is because if an old chimney isn’t fully blocked off, water can trickle down, causing issues in rooms that may not even have a fireplace anymore.

4. Rising damp

Damp-proof course is a sort of space built into the walls of houses preventing damp from spreading through the walls. Unfortunately, some older properties may not have these, or they may just be less effective, essentially meaning moisture can rise from the ground below the house and move into the house and floors above. If your home begins to feel cold and smell a bit musty, getting progressively worse the closer you are to ground level, you may have rising damp.

How to treat damp

Treating damp is possible – however, it’s better if you can try prevent it occurring in the first place. Here are some effective ways you can ensure your home remains warm and cosy:

1. Treating damp walls

Damp walls may be a pain, but they can be easily treated. Warm soapy water should do the trick and remove any black mould spores and spots from walls. However, professionals may need to be called if you have a serious case of rising damp as they might need to replaster and damp-proof internal walls, which removes any damage and stops it from happening again.

2. Ventilation

Don’t have extractor fans in your home and find that rooms stay damp for a long time (for instance, post-shower)? Well, it may be worth investing in these as they are extremely important in filtering out excess moisture. However, if that’s not possible, opening your windows slightly should help keep your home ventilated and well-aired.

Another solution for poor ventilation is a dehumidifier. These budget-friendly machines pull moisture out of the air and are perfect for that that one particular room which has a specific problem with damp, such as your attic or basement.

3. Keep your house warm

During the colder months, make sure your heating is running for at least some of the day and that it maintains a constant temperature. Sudden drops in temperature and cold spells in your home could cause condensation, especially around windows.

Other ways of keeping your house warm include investing in double-glazed windows – if you don’t already have them – and making sure you have loft and wall insulation to avoid heat escaping your home. As a bonus, this will also reduce your heating bills!

 

The three big priorities renters are looking for in 2021

As we continue with imposed regional restrictions in 2021, we are reminded of how it began and what it has taught us all so far.

The March lockdown caught many people off-guard and the world was forced to adapt quicker than they had ever expected. The letting market is no different. Tenant priorities have changed, as they look for new features within their tenancies and their properties.

Bigger spaces

Lockdown restrictions and social distancing guidelines throughout the year have forced people to assess their living situations. As more people are working remotely, the demand for extra working spaces has risen. This has been evident in larger cities where extra space, whether indoors or outdoors, can come at a premium. The rise of the home office has pushed tenants to look elsewhere to properties that can match that demand and give them that extra space.

A noticeable trend is the growth in appetite for properties outside of the capital and large cities in the UK. Not needing to be in such close proximity to the office has allowed prospective tenants to widen their radius. Pre-COVID, the thought of living in a city centre high-rise apartment complex wouldn’t come with too many challenges.

Now however, the isolation factor may still linger even with recent news of a potential upcoming vaccine. Time will tell when, and if, normality significantly returns, but people won’t forget. The idea of living in a different type of property, in a different area and possibly nearer family is becoming more popular.

Longer tenancies

The desire for tenants to stay in larger properties for longer has accelerated during 2020. Properties with more indoor and outdoor space have taken precedence over city-centre flats in close proximity to the office. This has ultimately increased the average tenancy length across the board.

Recent data from, Zoopla, indicates that tenant demand in rental property continues to rise. On average, demand from tenants in the private rental sector in September rose by 20% compared to the previous year. This increase has pushed prospective tenants to look for longer rental periods.

While the housing market remains open, remote and virtual management is highly encouraged. IPM are already at the forefront of technology by using their app to help manage, assess and communicate with tenants.

More flexibility

While 2020 has forced many people to adapt, it has also encouraged them to be flexible. More people are looking to try new areas, new properties and new ways of living before they commit to a purchase. This has been the case even pre-COVID.

However, what we are seeing now is more people trying new areas and properties that they otherwise would not have considered. For example, the growth in demand from London-based individuals for properties outside of the capital attests to this.

By renting, tenants can analyse the short to medium-term with an eye on the long-term. What they value now, or previously, might have changed. Tenants can see how the economy responds and whether a vaccine will return us to a more normal working/living environment.

For many, living further away from work and working from home has encouraged a better work/life balance. This trend is showing no signs of slowing down. Therefore, it is becoming clearer how significant the rental sector is for the future of the housing market.

Flexibility doesn’t just mean in terms of how people want to live, but the way the live with the increased rise in pet ownership. Many tenants are looking for flexibility in their leases to allow pets and designated exercise areas within their developments.

There are lots to think about in 2021 but the biggest factor is how we all adapt to these new changes.

 

New leasehold reforms to ‘transform the future of home ownership’

The Law Commission of England and Wales has published a package of leasehold reforms which it says will “transform home ownership for millions of people in England and Wales”.

The improvements would make it easier and cheaper for homeowners to buy the freehold, extend their lease, or convert to commonhold. The reforms will also pave the way for a system where flats are sold with freehold title (as part of a commonhold).

The reforms would also make it easier and cheaper for leaseholders to take over the management of their building without buying the freehold, by exercising the right to manage.

It has been estimated there are at least 4.3 million leasehold homes in England alone.

The reforms – laid out in three reports – work in tandem with planned changes from the Government, but the Law Commission says it is ultimately up to Government to decide whether the reforms should be compulsory (in all or some circumstances), incentivised, or left optional.

The first report, the Enfranchisement report, recommends changes to make the scheme of enfranchisement rights work more smoothly and efficiently. This would allow buildings with up to 50% non-residential space would qualify (rather than 25%, as is currently the case), as well as enabling leaseholders to make a claim straightaway, rather than having to wait for two years.

Additionally, the price to purchase a block would be reduced by allowing leaseholders to compel landlords to take “leasebacks” of some flats.

Leaseholders would be able to buy the freehold of multiple buildings at once and a new right to a lease extension for a term of 990 years would be introduced, in place of shorter extensions of 90 or 50 years under the current law.

The second report, the Right to Manage report, recommends the removal of existing obligations on leaseholders to pay the landlord’s costs of the RTM process, including of any Tribunal action.

It also wants to make the RTM claims process easier by reducing the number of notices that leaseholders must serve, and giving the Tribunal the power to waive minor procedural mistakes in the process.

The third report, the Commonhold report, sets out a plan to make commonhold not just a workable alternative to residential leasehold for all involved, but the preferred alternative.

The recommendations place leaseholders in control of the conversion process and enable conversion to commonhold without the agreement of every person, with safeguards to protect those who have not agreed.

It also wants to introduce flexibility into the way commonholds can be built and managed, enabling their use for developments of all types and sizes – moving away from a “one size fits all” approach which the Commission says makes the current scheme too inflexible for many developments.

Professor Nick Hopkins, Commissioner for property law, said: “The leasehold system is not working for millions of homeowners in England and Wales. We have heard how the current law leaves them feeling like they don’t truly own their home.

“Our reforms will make a real difference by giving leaseholders greater control over their homes, offering a cheaper and easier route out of leasehold, and establishing commonhold as the preferred alternative system. The reforms will provide a better deal for leaseholders and make our homes work for us, and not somebody else.”

Julie James MS, Minister for Housing and Local Government, Welsh Government, commented: “These comprehensive and much anticipated reports mark a significant step towards much needed reform. It is clear that the current leasehold system often fails resident leaseholders and these reports will give us a better understanding of the issues involved; we now need to take the time to consider them carefully.

“The Law Commission have undertaken a mammoth task in unpicking the current law, engaging widely on the options for change, and putting forward comprehensive recommendations and I’m grateful to them for their excellent work.”

What will Brexit mean for property prices?

Whether you’re a staunch remainer or avid Brexiteer, there’s no denying that the uncertainty around when the UK will leave the EU, and the terms under which it may happen, is causing property market uncertainty.

On Tuesday, Theresa May said that it might no longer be possible for the UK to exit the EU on 29 March 2019 as originally planned, although this still remains her preference. The prime minister has promised to put her withdrawal agreement to MPs for a ‘meaningful vote’ by 12 March. If, as many predict, the deal is rejected again, Mrs May has offered two further votes: one allowing MPs to rule out leaving the EU without a deal, and another allowing her to push back the Brexit date.

The announcement followed Labour leader Jeremy Corbyn’s declaration on Monday that he would back a second EU referendum if Labour’s own proposed Brexit deal wasn’t adopted. Many are now predicting that Brexit will be delayed until the end of June at the earliest.

What might a no-deal Brexit mean for house prices?

Many business leaders and financial experts have expressed concerns about the potential consequences of a no-deal Brexit. In September 2018, Bank of England governor Mark Carney warned that leaving the EU without a deal could send house prices tumbling by a third, and this week he added that UK growth would be ‘guaranteed’ to fall in the event of a no-deal Brexit.

So, what does all of this mean for the property market, and what impact has the vote to leave the EU already made on house prices and sales volumes? New analysis of the property market activity before and since the Brexit referendum indicates what experts from the estate agency, building, mortgage and buy-to-let sectors think will happen over the coming months.

What’s happened to house prices since the Brexit vote?

House prices did stagnate for a while following the referendum in June 2016. This could well have been down to the usual pattern of prices growing in spring and plateauing over summer, which was also apparent the same month in 2017. But, with Brexit looming ever closer, house prices suffered a bigger post-summer dip than usual in 2018, dropping from a peak of £232,797 in August to £230,630 in November.

The latest ONS House Price Index shows that they crept up slightly in December, meaning that the current average UK house price is £230,776.

Are UK house prices falling?

Looking at year-on-year house price change over the longer term can be another useful way of understanding what the market’s doing. Transaction volumes since the referendum is another way of judging the health of the housing market by looking at transaction volumes, meaning the number of property sales in any given month. A lower number of sales can indicate market uncertainty, which is often triggered by events such as an election or a referendum. According to HMRC’s most recent seasonally adjusted figures, there were actually more house sales in January 2019 – 101,170 to be exact – than in the same month the year before (99,830).

What’s the pre-Brexit market like for sellers?

Two commonly used measures of how the market is performing for sellers are stock per branch – which is the average amount of properties on each estate agency’s books – and time to sell. In January, the average time for a property to go under offer shot up to 77 days, the highest it’s been in years – and this could be partly due to nervousness around buying a home in the run-up to Brexit. Stock per branch was also up year-on-year, from 42 in January 2018 to 45 in January 2019.

As it stands, the only thing that’s clear is that nothing is clear, and you’d be justified in having no idea whether now is the right time to buy, move, invest or remortgage.

Source and information provided by Which.co.uk

Read more: https://www.which.co.uk/news/2019/02/what-will-brexit-mean-for-house-prices/ – Which?

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:
External:
• 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.

Internal:
• 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.

http://www.lease-advice.org/publications/documents/document.asp?item=21

 

 

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.