The month in brief
Welcome to the July issue of the Technical Update. This month the government’s leasehold reforms are starting to bear fruit and we take you through some of the changes impacting our sector that have been announced in the last few weeks.
We also take a look at the latest announcements on building safety legislation, signpost the Law Commission’s reporting timetable and flag up our new programme of Regional Seminars.
Mark Loveday provides his regular Legal Update and in our Defects Database, Declan Strong explains the importance of properly installed and maintained lead flashings.
Finally, stand by for an imminent newsflash and IRPM's full commentary on Lord Best's soon-to-be released recommendations to Government on implementing mandatory regulation, qualifications and code(s) of practice for residential property agents.
As always, you can contact us with your news, views or queries by emailing the Editor at lesley@ davisaylingmedia.co.uk
IRPM News
CEO’s column | Regional seminars - book your tickets now | Board member vacancy – your chance to make a difference
Leasehold/block management
CMA investigates leasehold housing sector | Government responds to Leasehold Reform proposals | Property manager wrestles with cladding refund promise | Leasehold axed on all new houses | Labour pledges ban on leasehold ownership | Interim report recommends ‘beauty for everyone’
PRS and B2R
Build-to-Rent investment hits record high | Build-to-rent operator waives deposits and fees | UK landlords struggling to keep up with reforms, says research | No end in sight for rental demand
Social housing
‘Significant increase’ in affordable homes
Scotland and Wales
More affordable homes completed in Scotland | Energy efficiency grants for social landlords | Housing could become a human right in Wales | Welsh government demands 50% affordable housing on new developments
Fire safety
Building owners urged to remove combustible materials from balconies | Fire doors in council blocks are still not safe, research reveals | New approved Document B is published
HR News
Sex discrimination claims on the increase
Legislation
Government to bring Hackitt legislation to parliament this year | Law Commission sets reporting timetable
Legal update
Mark Loveday looks at this month’s key cases
Talking point
Leak detection systems – are they worth it?
Topic of the month
Complaints handling
Defects database
Duncan Strong takes a closer look at lead flashings
IRPM events
What is happening and where?
IRPM News
Passenger announcement – is there a pilot on board..?
Andrew Bulmer makes the case for regulation
Cruising steadily at 35,000ft, this announcement would make you pause momentarily, nervously lowering your first holiday Prosecco from expectant lips. It could spoil your day. It might well spoil your whole life, what’s left of it. So, on reflection, do you want your life in the hands of an unlicensed pilot? Thought not.
How about dodging your way down the motorway in a world where lorry drivers don’t pass a test or need a licence; where anyone could drive a 40 ton chemical lorry. An accident waiting to happen? Or do you love a bit of carnage?
Airlines and haulage firms are regulated in their own ways. But we all accept without question that the “nut behind the wheel”, the person doing the job, must demonstrate competence. And we wouldn’t want it any other way.
Property managers look after people’s safety, their environment, their biggest asset and their home/nest/sanctuary. If the job is as tricky as they say, so laden with responsibility, so safety dependant, and then considering the sums of money involved, surely they should have to pass a test too? You’re an IRPM member, so you get this already. While a minority of naysayers still argue that proving competence is unnecessary, a burden on business, a show of hands at the 2018 IRPM Annual Seminar confirmed getting your team qualified helps business, not hinders it. It certainly helped my business back in the day.
Which is why Mark Prisk MP, a Chartered Surveyor and a former Housing Minister who knows his subject better than most, is clear that between regulating firms and licensing individuals, you get a better result from concentrating on the individuals. This makes sense and there is evidence to back this up. Property Ombudsman, Katrine Sporle, confirmed to the IRPM Annual Seminar that most complaints are about poor communication or service from individuals (scroll down to Topic of the month for more on this).
Sure, the contract is with the firm and so the firm should be regulated. But if you want to stop the mistakes occurring in the first place, then the people doing the job need to be competent. Do you want to fly safe, or prosecute the crashed airline? Prevention is better than cure. Competence is better than rules. Which is why we are seeing firms increasingly getting their managers qualified, to de-risk their business, reduce complaints, invest in and keep their staff and win new business.
Lord Best will be issuing his eagerly awaited report on regulating residential property agents (RoPA) very soon. IRPM are on the RoPA Working Group, and while I am sworn to secrecy on the report contents, I can repeat what Lord Best himself shared ‘in confidence’ with over 700 IRPM Annual Seminar attendees; that firms should be regulated and individuals should be licensed. And you will get my full briefing on the details why qualifying/licencing competent managers is the right answer as soon as Lord Best’s report is out.
Meantime, enjoy your holidays and don’t give that pilot a second thought. You won’t need to. They passed their test and have a licence. Residents deserve that same peace of mind, and businesses confirm it is good for business. Win-win.
Andrew Bulmer is CEO of the IRPM
Regional seminars – tickets on sale now
Did you miss out on tickets for the Annual Seminar? If so, Regional Seminars are coming up in the autumn and tickets are on sale now. This year there are five to choose from in a range of easy-to-access locations around the country. The dates are:
- Bristol – 17 September
- Manchester – 2 October
- Southampton – 10 October
- Birmingham – 22 October
- London – 29 October
The aim of the seminars is to provide you with the knowledge and professional tools you need on a daily basis and to enable you to maximise your personal potential. Also, don’t forget that attending one of the seminars counts towards your CPD.
Details of speakers and content will be announced soon but as always, each event will feature expert speakers giving safety, legal and industry updates as well as keeping you in touch with your IRPM.
Early Bird tickets are now on sale until 31 July priced at £79 for IRPM members. Non-members tickets are £150. So book your place now and look out for updates on our event website.
Board member vacancy – your chance to make a difference
The property management industry is undergoing a massive cultural change that will bring positive improvements to the sector, its customers and consumers. Our mission at the IRPM is to raise standards in the management of residential property in the UK and provide individuals with independent professional accreditation. We are not a trade body and do not lobby on behalf of our members but we are an authoritative and trusted voice with government and stakeholders as an unbiased speaker of truth to power.
To fulfil our mission, the Institute is creating a vacancy on its board of directors for a forward-thinking individual specialising in customer/consumer service and consumer relationships. You will be joining an existing and highly motivated board, helping deliver that change within the Institute.
The board meets in London for a half-day, four times a year. Between board meetings, there may sometimes be task-and-finish projects/meetings that will require your attention. There is no remuneration package but reasonable travel costs are reimbursed.
The successful candidate will:
- have extensive experience and responsibility at a senior level for delivering a demonstrably successful customer experience
- be able to demonstrate a track record of implementing and managing change in customer service strategy at both the strategic and operational levels
- have experience of championing the customer and consumer at board level
- be able to prioritise key deliverables to maximise the impact of finite resources, working within a strong ethical framework
- have drive and passion for delivering exceptional standards to customers and raising these standards via education
- have experience and understanding of the residential property management sector.
Experience of professional bodies and the education sector would be an advantage but is not essential.
If this sounds like you - and you would like to make a difference to the management of the homes of millions of people, we would love to hear from you!
Please email your CV and covering letter, in strictest confidence, to info@irpm.org.uk for the attention of Zuzana Klaskova before Friday 23 August.
Leasehold/block management
CMA investigates leasehold housing sector
In June, the Competition and Markets Authority (CMA) launched an investigation into breach of consumer protection laws in the leasehold housing market. This is in line with the Government’s ongoing initiative to better protect home buyers. It was triggered by increasing concerns that purchasers of leasehold properties are not given clarity on the risks and obligations imposed on them.
The CMA’s review will focus on:
- Potential mis-selling – determining whether buyers are provided with necessary information about leasehold properties, the obligations imposed on them in the lease and their right to purchase the freehold; and
- Potential unfair terms – for example, excessive fees paid to freeholders and managing agents when homeowners want to carry out improvements to their properties and increasing ground rents which have an impact on the value and marketability of homes.
The CMA will be consulting with stakeholders including lenders, freeholders and developers to obtain information about the process behind leasehold purchases and the terms being offered. If the CMA considers that a company is mis-selling or proposing unfair terms, the CMA may take enforcement action against the company.
Government responds to Leasehold Reform proposals
In June the Ministry of Housing, Communities and Local Government (MHCLG) responded to the Select Committee’s report on Leasehold Reform. The Government agreed with the committee on the following measures:
- giving clearer information to consumers on how to buy and sell leasehold properties
- working with developers on a standardised ‘key features’ document so consumers have clear details on the lease before they buy
- removing any financial value from future ground rent
- ensuring the Law Commission is able to fully consider the application of unfair lease terms
- updating planning guidance to state there should be clear and transparent agreement between developers and local authorities on public areas and utilities to be adopted
- exploring the best way to challenge unjustifiable legal costs, including changes to legislation that may be needed
- exploring legal changes to forfeiture
- extending mandatory membership of a redress scheme to all freeholders of leasehold properties
- implementing improvements to enfranchisement as soon as possible.
The Government also stated it will take on board the Committee’s views on commonhold in light of the Law Commission’s report and will consider the Committee’s recommendations on permission fees, major works (including a code of practice) and other charges.
The IRPM welcomes the recommendations, especially the proposed improvement in leasehold information to buyers of leasehold properties. For some years we have been asking government and trading standards to enforce the Consumer Protection Regulations 2008, whereby information that informs the buyers’ decision should be provided at the earliest opportunity. At last this position seems to be gaining traction. To read the response document in full click here.
Property manager wrestles with ACM cladding refund promise
Property manager Rendall and Rittner has found itself in a difficult situation with residents over cladding replacement at one of the blocks it manages in London. Residents at Paddington Walk have been sent bills for tens of thousands of pounds each to cover the costs of replacing the ACM cladding on their block, estimated to cost £8.9M to remove (source: Inside Housing).
Residents paid £3.5M towards re-cladding costs last year. However in June - just weeks after the government announced its £200M fund for removing cladding from private blocks – they received a further demand to pay the remaining money through their service charges. Residents are reported to be unhappy that they are still being pursued for costs following the funding announcement.
However, in a statement published earlier this month, Paddington Walk Management and Rendall and Rittner told the press that a delay in issuing requirements for accessing the funds is causing confusion. As soon as funding is received, they say leaseholders who have paid will be reimbursed their proportion of the funds.
Leasehold axed for all new houses
In future, all new-build houses will be sold as freehold. Speaking at the Chartered Institute of Housing conference in Manchester in June, Communities Secretary James Brokenshire MP confirmed plans to abolish the selling of new houses as leasehold properties and reduce ground rents for new leases to zero.
The government also intends to stop freeholders and managing agents taking as long as they want – and charging as much as they want - to provide leaseholders with the information they need to sell their home. A new time limit of 15 working days and a maximum fee of £200 plus VAT will be introduced to make the home buying process quicker, easier and cheaper.
And where buyers are incorrectly sold a leasehold home – saddling them with a property that could ultimately prove difficult to sell – consumers will be able to get their freehold outright at no extra cost.
These measures will require primary legislation which, with Brexit distracting Parliament, is likely to be two years away.
Labour pledges ban on leasehold ownership
Labour, like the Conservative Party, has the leasehold sector in its sights. In June it published its own proposals to ban the sale of new leasehold houses and flats and slash the cost of buying the freehold of an existing home. (Source: Inside Housing).
The party is launching its own consultation looking at ways to end leasehold ownership of both houses and flats, including allowing leaseholders to buy the freehold of their property for 1% of its value. Pledging to “save homeowners thousands” Labour plans to ensure that the freehold of a property worth £250,000 with a 90-year lease could be bought for £2,500. Labour’s proposals also include plans to revive Commonhold and end ground rent on new leaseholds and capping ground rents on existing homes at 0.1% of the property value, up to a maximum of £250 a year.
Interim report recommends ‘beauty for everyone’
The Building Better, Building Beautiful Commission has published its interim report. It is recommending that councils encourage the redevelopment of retail parks and large supermarkets into communities that include homes, shops and businesses and deliver ‘beauty’ as well as functional spaces. The report calls for greater weight to be given to securing beauty in the planning system and for communities to be given an early and more effective voice in the planning process to help end identikit homes and ‘boxland’ developments.
The proposals are contained in the Building Better, Building Beautiful Commission’s interim report, ‘Creating space for beauty’, published on 9 July 2019.
The report examines the fundamental reasons for ugly developments and public mistrust, and also calls for communities to be given an earlier say in the development process, encouraging greater use of master-planning – rather than communities engaging in “planning by appeal”.
Interim Chairman of the Commission, Nicholas Boys Smith said: “We need to move the democracy up-stream from development control to plan-making. Beauty should not be just a property of old buildings or protected landscapes but something we expect from new buildings, places and settlements. We need to deliver beauty for everyone, not just the wealthy. This will require, ultimately, some fundamental changes. Hopefully our report will start part of that important debate with the public and the professions.”
The final report is expected later this year.
PRS and B2R
Build to Rent investment hits record high
Institutional investment in the Build to Rent (BTR) sector reached a record high last year, according to research reported in Letting Agent Today earlier this month. Bidwells’ Build to Rent Summer 2019 Analysis suggests there was a record £4 billion allocated to the sector in 2018.
According to the report, almost two-fifths of these transactions were forward-funded and the investment brings the total up to £6 billion in the last two years. London accounted for £1.6 billion of BTR investment last year, with £417 million invested in the South East and Eastern regions.
Build-to-rent operator waives deposits and fees
Last month, Housing Secretary James Brokenshire called for renters to be able to ‘passport’ deposits from one landlord to another. Moda Living, which builds homes for rent, has welcomed the proposal but is going one step further by announcing that renters in its developments won’t have to pay anything towards either deposits or fees.
According to the Deposit Protection Service, the average rental deposit is about £1,040 in England and Wales, going as high as £1,750 in London. But the only payment Moda customers have to make before moving in is a £200 reservation to hold their apartment, which is fully refundable and comes off the first month’s rent. Johnny Caddick, managing director at Moda Living, says the company is “looking to change the perception of renting by offering hotel-style service and creating communal spaces within our buildings for all residents to enjoy.”
UK landlords struggling to keep up with reforms, says research
New research commissioned by Market Financial Solutions (MFS) has revealed that many of the UK’s landlords are struggling to keep pace with new legislative and regulatory reforms introduced in the past year.
The bridging lender commissioned an independent survey of 400 UK landlords, all of whom let one or more residential properties to tenants. It found that 30% do not understand the changes to House in Multiple Occupation (HMO) licensing, which came into effect in October 2018 and stipulates the minimum sizes of rooms.
When it came to tax, there was also significant confusion:
- 28% do not understand the reforms to inheritance tax that have changed the tax-free allowance on properties being passed down; and
- A quarter (25%) do not know about the reforms affecting tax relief on mortgage repayments, which were implemented in April this year.
The research also found that far more landlords opposed these reforms than supported them:
- 44% are against the banning of letting fees, compared to 23% in favour.
- The abolition of Section 21 (37% against, 16% for), and the changes to buy-to-let mortgage relief (48% against, 16% for) attracted similar disapproval.
Almost one in three (28%) landlords admitted to not fully knowing what the abolition of Section 21 means. A similar number (27%) said they do not understand the tenant fees ban (June 2019) or how it may affect them.
No end in sight for rental demand
Demand for rented homes looks set to increase according to new data indicating that many people who don’t own a property will not do so for some time. The latest Zoopla UK Cities House Price Index shows the average income required for a first-time buyer to purchase a home has grown 9% since 2016 and stands at an average of £54,400. Based on the data supplied by Zoopla, this is around £4,500 more than the amount needed three years ago.
The average deposit required for first-time buyers to purchase in a major UK city is currently £38,418. However, first-time buyers in London now need an average household income of £84,000 to purchase a home, which is unaffordable for most would-be purchasers. Despite being the lowest figure recorded since 2015, the level of income required to buy a home is pushing up demand in the rental market. This is not expected to change in the forseeable future.
Social housing
‘Significant increase’ in affordable homes
Government housing accelerator Homes England has published its latest annual housing statistics. These show a significant increase in the number of affordable homes being built in England. Between 1 April 2018 and 31 March 2019, the new figures show there were 45,692 new houses started on site under programmes managed by Homes England and 40,289 houses completed. These are the highest levels of starts for nine years and the highest levels of completions for four years. In total, 67% of these housing starts and 71% of the completions were for affordable homes. Homes England has also welcomed a £1 billion funding boost, announced by Communities Secretary James Brokenshire at the Chartered Institute of Housing conference held in Manchester at the end of June.
Scotland and Wales
More affordable homes completed in Scotland
There has been a large increase in the total number of affordable and social rented homes in Scotland and the Scottish Government is on track to hit its target of 50,000 affordable homes by 2021.
New statistics indicate there were more than 9,500 affordable homes delivered in 2018-19, This represents an increase of 12% on the previous year. Completions of social rented homes accounted for 6,573 of the properties, 25% more than the previous year.
The statistics also show a record increase in the number of new build homes completed across all sectors, which reached more than 20,000 for the first time in ten years.
Energy efficiency grants for social landlords
Extra funding to make homes warmer and promote carbon reduction has been announced by the Scottish Government. Social landlords will benefit from £3.5 million in extra funding to improve the energy efficiency of their properties. The funding is being provided for measures such as insulation and internal improvements to social rented accommodation.
To receive the funding projects must also include activity to reduce a building’s carbon footprint, such as ground source heat pumps, biomass energy from organic material and solar panels.
Housing could become a human right in Wales
Three leading housing organisations in Wales are calling for the right for housing to be recognised in Welsh law. Tai Pawb, CIH Cymru and Shelter Cymru have launched a downloadable jointly-commissioned report looking at the positive impacts that incorporating the UN-enshrined right to adequate housing would have on the housing crisis in Wales.
The report makes a strong case for the recognition of the right to housing in Wales, demonstrating how it would help address key housing issues such as homelessness and the severe shortage of affordable and accessible housing. The report demonstrates how the right to housing would help solve issues such as the lack of accessible homes, requiring there to be a focus on those most in need of housing. By adopting a rights-based approach to housing, Wales would follow a growing number of countries where the right to housing is a constitutional principle, including Finland, where homelessness has fallen by 35% since 2010. In a similar period, homelessness in Wales has risen by 63%.
Welsh government demands 50% affordable housing on new developments
Julie James, the Welsh housing minister is calling on planning departments across the country to demand that at least 50% of housing on development sites be affordable.
Labour’s minister for housing and local government at the Welsh Assembly, is writing to councils urging them to take “all opportunities to create housing developments with at least 50% affordable housing”.
With the removal of the Housing Revenue Account borrowing cap and support from the Welsh government to build affordable housing, the minister is determined to ensure this is a key part of reviewing their local development plans.
Fire safety
Building owners urged to remove combustible materials from balconies
The government is calling for building owners to remove combustible materials from balconies on residential buildings, following the fire at a block of flats in Barking in June (Source: Architects Journal)
The MHCLG issued a downloadable advice note on 24 June recommending that "The removal and replacement of any combustible material used in balcony construction is the clearest way to prevent external fire spread from balconies and therefore to meet the intention of building regulation requirements and this should occur as soon as practical". However, the Architect’s Journal reports that the advice note is likely to add to confusion over how official fire safety regulations apply to balconies.
Using combustible materials on the cladding or balconies of buildings over 18m in height has been banned since the end of last year but the Journal believes it is is unclear from the latest advice whether the government now believes this applies to buildings that are lower than 18m.
Building regulations expert Geoff Wilkinson told the AJ that the advice note suggests developers and architects now have to meet the requirement for external fire spread "without giving any measure of how to prove it".
Fire doors in council blocks are still not safe, research reveals
Tens of thousands of fire doors that fail to meet safety standards are still being used in council homes across the country, with only a few replaced since the Grenfell Tower fire, according to research carried out by Inside Housing.
Of 326,863 doors in houses owned by 98 councils across the country, it is believed that 33,522 - around in 10 - doors do not meet the 30-minute standard, while several local authorities are still carrying out inspections to identify whether any of their doors need replacing.
Lord Gary Porter, chair of the Local Government Association, told Inside Housing that councils “are struggling to confirm that the fire doors that have come back onto the market meet their requirements”.
The Ministry of Housing, Communities and Local Government (MHCLG) is still working with National Trading Standards and the Association of Composite Door Manufacturers to develop a remediation action plan, while further tests are ongoing.
With only an estimated 8% of non-compliant doors now replaced, the councils that provided data have already identified a combined £22.3m bill, and many have yet to calculate the cost of replacing doors in their properties.
New Approved Document B is published
On 5 July the government issued a circular announcing approval and publication of publication of the new clarified Approved Document B (Fire safety) 2019 edition. This includes
• Volume 1: Dwellings
• Volume 2: Buildings other than dwellings
The changes made to the Approved Document apply only to buildings and building work in England. However, they do not apply in any case where a building notice or an initial notice has been given to, or full plans deposited with, a local authority and either the building work to which it relates if that work
(a) has started before the date that a building notice, initial notice or full plans have been deposited; or
(b) is started within the period of two months beginning on that date the building notice, initial notice or full plans have been deposited.
The design of blocks of flats has moved from volume 2 to volume 1. But there are no changes to the technical guidance and no new policy is being introduced as a result of this work.
A separate call for evidence on the technical review of the building regulations and associated fire safety guidance closed on 15 March 2019. The responses are being considered and further announcements will be made in due course. Future policy changes will be subject to separate public consultation.
The Approved Document B (Fire safety) 2019 edition will come into force on 30 August 2019.
HR News
Sex discrimination claims on the increase
New research from employment law firm GQ Littler has revealed that sexual discrimination claims in the workplace increased by 69% in the last year. The #MeToo movement has helped give women the confidence to report cases of discrimination at work, and employers need to continue ensuring staff feel comfortable enough and know how to report instances of bullying and harassment, says the report.
If you are unsure of the best way to ensure that discrimination doesn’t happen in your business, the CIPD has updated its helpful factsheet, outlining good employment practices for tackling sex discrimination at work. Go to the Resource Hub to find out more.
Legislation
Hackitt legislation expected this year
The government has announced that the legislation to implement Dame Judith Hackitt’s recommendations for building regulations and fire safety ‘will be brought before parliament later this year’ (Source: The Fire Protection Association).
Dame Judith’s review of building regulations and fire safety was launched last year after the Grenfell Tower fire. An interim review published in December 2017 found that a ‘universal shift in culture’ is needed to rebuild trust ‘among residents of high-rise buildings’. This is also required to ‘significantly improve the way that fire safety is assured’, and the report calls on the construction industry, building owners, regulators and government to ‘come together’ to address ‘shortcomings’.
IRPM worked with the Hackitt team to determine the competencies required of the proposed new Building Safety Manager role.
The government announced in December 2018 that a ‘stronger and more effective regulatory framework’ will ‘implement the recommendations’ made by Dame Judith, and ‘commits the government to a programme of reform over the coming years’ as well as reviewing building regulation fire safety guidance.
Inside Housing has reported that Housing Secretary James Brokenshire has confirmed that legislation to implement the ‘new post-Grenfell system of building regulations’ will be brought before parliament later this year, with the bill to be ‘put to MPs in the next parliamentary session’. This would mean that a vote would take place ‘at some point’ in 2020 or 2021, with legislation likely to be enacted in 2021.
Law Commission sets reporting timetable
The Law Commission has recently published its business plan, setting out the timetable for future reports and consultations.
Reports relating to their work on commonhold, right to manage and enfranchisement can be expected as follows:
- Right to manage – February 2020
- Commonhold – February 2020
- Enfranchisement – late 2019 or early 2020
For more information go to www.lawcom.gov.uk
Legal update
When can approval for works be reasonably withheld?
Mark Loveday looks at a case from June which received considerable press coverage and which provides some useful pointers for property managers
The claimant in the recent case of Hicks v 89 Holland Park Management Ltd was a celebrated architect. She owned a plot of land in Kensington and wished to obtain planning consent and then build an unusual subterranean house. The defendant owned the freehold of an adjacent block of flats, which were held on long leases.
By a deed made in 1968, the claimant could not:
- Make or amend any planning application for the site “unless the revised or amended drawings and specifications had first been approved by” the Defendant (clause 2(b)), or;
- Commence work on site “before the definitive plans drawings and specifications of the said buildings have first been approved by” the Defendant “or his surveyor” (clause 3).
The claimant applied for consent under both covenants, but in a Decision Letter dated 20 January 2017, the defendant refused approval. The claimant issued proceedings arguing that the refusal was unreasonable.
The judge decided it was unreasonable for the defendant to refuse or withhold approval under either provision of the Deed on the grounds of
(a) aesthetics,
(b) the effect or possible effect on trees or
(c) the disruptive effect of construction: Braganza v. BP Shipping Ltd [2015] UKSC 17, Victory Place Management Company Ltd v. Kuehn [2018] EWHC 132 (Ch) [2018] HLR 26 and No. 1 West India Quay (Residential) Ltd v. East Tower Apartments Ltd [2018] EWCA Civ 250 [2018] 1 WLR 5682.
There was no suggestion that the proposed new house would affect the value of the defendant’s property. The defendant could only justify its decision by reference to certain “construction issues” referred to in the 2017 Decision Letter. This in turn involved a detailed consideration of the concerns raised by the defendant’s engineer in 2017.
The judge scrutinised the engineer’s 2017 report in some detail and rejected numerous of these concerns as not being proper objections to giving consent. He concluded there was only one generic issue of importance that was properly an area of concern for the defendant, namely the possible effect of movement and subsidence caused by the construction of a deep basement area on the site in close proximity to the flank wall of the block.
In 2017, the engineers had identified a risk of “slight” cracking. The judge concluded that refusal of consent under clause 2(b) on the basis of a risk of slight cracking was one “no reasonable decision maker occupying the position of the Defendant could have reached”. But structural issues concerning ground investigations, groundwater investigations, excavation and ground support, monitoring and the risk of settlement were material to permission under clause 3 of the Deed. The Judge held that the defendant unreasonably refused consent under clause 2(b) of the 1968 deed, but not clause 3.
Why is this case useful?
Applications by leaseholders for permission to carry out works frequently arise in the context of block management. This case received a great deal of publicity in the national press as a result of the A List celebrities involved in the dispute. But it gives some useful pointers about what would and would not be proper grounds for refusing consent to works, and the test to be applied by managers considering applications to carry out works.
Must-read case
Camden v Morath [2019] UKUT 0193 (LC).
A local authority had a headlease of an estate with 395 flats. Some leases allowed it to pass onto the leaseholders of the individual flats charges the Council was required to pay its own landlord. Some 28 did not. The Upper Tribunal upheld a decision not to vary the 28 leases to allow the Council to recover its costs. Those leases did not fail “to make satisfactory provision” for service charges under section 35(2) of the Landlord and Tenant Act 1987 because the service charge provisions were “clear and workable”.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
For more case law, go to the Resource Hub.This section is updated on a regular basis.
Talking Point
Leak detection systems – are they worth it?
The Association of British Insurers estimates that a burst pipe can release enough water to fill 48 bathtubs. Imagine that amount of water flooding through the ceiling of a flat and then think about the amount of damage that could be caused as a result. Sadly, that scenario isn’t an unusual one. Between 2014 and 2016, the total cost of escape of water claims rose by 24%. And during the first nine months of 2017, escape of water claims cost insurers £483 million.
The ABI reckons claims are increasing for a number of reasons: high spec kitchens with integrated plumbed-in appliances and more bathrooms in new properties; increased use of push-fit pipes by the plumbing industry; and in some cases, poor pipe installation. Whatever the cause, for property managers as well as residents, a serious leak in a residential block is a major headache. Residents frequently fall out over water damage and insurance claims, which on average are around £25,000 for a burst pipe. Add to this the fact that 1 in 5 UK homeowners has no contents insurance and property managers inevitably find themselves involved in disputes. Many block insurers are now introducing additional excesses for water damage so leaks add up to a big problem for everyone, not just those immediately affected.
In response to this growing problem, a number of companies have developed leak detection systems. Two of the best known are LeakSafe, and Aqualeak which both offer systems suitable for residential blocks. These systems cleverly detect leaks, raise the alarm and even shut off supply to prevent large-scale escape and water damage.
In June, Aqualeak produced a new technical guide that explains the way leak detection systems work. It answers the key questions that should be considered prior to installation, such as:
- Do I need a flow-based or sensor-based system?
- How many zones do I need to monitor?
- Should I use cable or probes?
- What do I want my control panel to do when a leak is detected?
Water leak detection: Selecting the right system for your application explains how leak detection systems are configured, the components required and includes technical illustrations showing how systems are installed. LeakSafe also has a useful list of frequently asked questions on its website at www.leaksafe.com which are a good starting point if you are thinking about installing a leak detection system.
And the really good news for residents – apart from preventing water damage of course- is that leak detection systems can have a positive impact on block insurance premiums. Some insurers will reduce claims excesses if a leak prevention system is installed.
Topic of the month
Dealing with complaints
Property Ombudsman Katrine Sporle told delegates at the Annual Seminar in June that the majority of property management complaints dealt with by the ombudsman service start with poor communication.
In 2018 200 cases were resolved. “Communication is a common theme,” said Katrine. “Wilful ommissions cause problems down the line…it’s really important that we concentrate on the professionalism of the service on offer.” She cited failure to check documentation and failure to communicate cancelled meetings as just two of the simple, easily resolved issues that can escalate into a complaint if not dealt with swiftly.
“Receiving complaints means you have to deal with them,” said Katrine. Every business, no matter how efficient, generates complaints from time to time. The Ombudsman’s advice is never to ignore them, even if they are in the form of a less than flattering post on social media. “Give your customers access to how to complain at the outset and never pass a complaint down the line – deal with it. Customers want to know that the complaint is being taken seriously and they want to know what you are doing to put it right.”
Katrine advises a five-step approach:
- Always say ‘thank you for your feedback’ no matter how negative it is – complaints help a business to get it right next time.
- Articulate the issue clearly to make sure you’ve fully understood the problem.
- Focus on the problem, not the person.
- Set out your proposed resolution.
- Summarise and explain the options – making it clear that the customer can escalate the problem if they wish – either further up the company or to TPO.
It is important that property managers remember that people’s wellbeing may be genuinely affected if they feel they are unable to resolve a complaint, she said.
The Property Ombudsman website has plenty of tools to help you improve your complaints handling. TPO provides a range of templates to download and personalise including a model in-house complaints procedure to follow, a complaints acknowledgement letter and a timescales flowchart. There is also a very comprehensive set of FAQs that look in detail at the procedures to be followed if you receive a complaint, how best to acknowledge that complaint and how to investigate and conclude or escalate the issue.
Katrine urges property managers to “develop a culture of customer care” by welcoming complaints and feedback and developing a strong strategy to deal with them. Also, she believes it is very important to ensure you have an out-of-hours service in place to deal with problems as they arise and take the heat out of problems occurring when offices are closed. “It’s not that hard” she said, but it is an issue that is vital to the reputation and public perception of the industry.
You can use TPO’s complaints toolkit and download templates here.
Defects database
Lead flashings
What are lead flashings and why are they important? Declan Strong explains
Lead flashings are a common sight on almost all roof types and are a fundamental element in providing waterproof protection to roofing systems. Used at penetrations in roofs such as chimney stacks, dormer windows and parapet walls, lead flashings are installed to maintain a watertight roof and reduce water ingress and internal mould build-up.
Defects in lead flashing can be slow to show themselves, possibly over a number of months or even years. Failed lead flashings can result in conditions that will give rise to dry and wet rot, insect infestations and other forms of decay.
The main signs for property managers to look out for when considering if lead flashing needs replacing are splits and cracks. These will ultimately lead to failure in providing water proofing protection. It will become clear on closer inspection when lead flashing has deteriorated due to heat expansion and contraction. If there is a build-up of mould or water ingress within a dwelling below the roof then defects in lead flashing would be the first place to investigate and a roof survey should be undertaken.
When lead does split or damage, the correct way to repair it is to weld a piece of lead over the affected area. This can be quite an advanced procedure and welding lead can be a difficult task to carry out successfully. For this reason, flashing tape can also be used, which is an adhesive aluminium strip covered on one side by a bitumen layer. It is important to note however that this is not a permanent repair and only has a life expectancy of around two to three years. Welding new lead provides a much longer term solution. In some cases, the damage to the flashing may require full replacement of the material. Lead flashing has a life expectancy in excess of 100 years if allowed to expand and contract freely.
Declan Strong is a building surveyor with Earl Kendrick
IRPM events
Visit the Events page for more details
14 August 2019 - Associate Exam Workshop - London
15 August 2019 - Associate Exam Workshop - London
11 September 2019 - Associate Exam in London & Birmingham
11 September 2019 - Member Exam Workshop - London
12 September 2019 - Member Exam Workshop - London
25 September 2019 - Member Exam in Glasgow
26 September 2019 - AGM 2019
26 September 2019 - Fellows Day 2019
15 October 2019 - Member Exam in London & Manchester
