The month in brief
Welcome to the November issue of the IRPM Technical Update. As a former US President once said, we live in interesting times and the last few weeks have been no exception. Another month, another leasehold consultation – this one following on from last December’s paper looking at the sale of leasehold houses and onerous ground rents.
A new working group - of which the IRPM is a member – has also been established to scrutinise standards in our sector. Among other things it will be considering proposals for a property agent regulator and looking at qualifications and continuing professional development for letting, managing and estate agents.
In other news, ARMA has launched its own client money protection scheme; the government has issued official advice to owners of high-rise buildings with combustible window panels; and the Tenants’ Fees Bill will go to the House of Lords for debate on 5 November. Our topic of the month this time round looks at major works to the common parts of blocks – and how to get buy-in from residents when you are using an interior designer.
If you have had to deal with an interesting management situation – or are facing a problem that you think other IRPM members would benefit from knowing about join the info@irpm.org.uk with title "IRPM Update Idea - FAO Marketing". We are always keen to hear from you.
IRPM News
IRPM is leading the way | Regional Seminars - key take-aways | Don’t overcharge clients, warns IRPM | 2019 exam dates announced | Annual Seminar 2019 - don't miss out
In the news
Labour slams government leasehold plans | Government issues warning over combustible window panels | Bellway sets aside £6M for cladding | ARMA launches CMP scheme
What’s new in HR
Don’t get caught out at Christmas
Social Housing
Council borrowing cap to be removed | Regulator warns on social housing safety | L&Q in tech trials for ‘smart’ estate management | Funding released to make social sector homes safe
Health & safety
Government announces private rental sector health and safety review | IOSH calls for cladding ban to be widened | Housing Associations should share fire safety information | Building safety information from MHCLG
PRS and B2R
Unanimous approval for Sheffield B2R scheme | £58.5M debt financing for Liverpool Waters | Property manager fined for overcrowded HMO | Moda Living secures major investment | Build to rent ‘soaring’ in the regions | Councils will pay landlords to rent properties
Scotland and Wales
Welsh Government will not pay for cladding removal | More cash for Innovative Housing Fund | Fire door testing in Scotland | Compliance and fire safety consultation response | South Wales property booms as toll is scrapped | Scottish Regulator wants annual statements | Welsh HA building falls by a third
Legislation
Tenants Fees Bill to be debated on 5 November | Changes to Tenants Association Regulations come into force | Government promises reform to leasehold sector | Regulating property agents – have your say
Legal update
Mark Loveday looks at this month’s key cases
Talking points
Block management systems | Serving eviction notices – could a paralegal help you get it right?
Topic of the month
Major interiors works: getting buy-in from residents
Events
What’s happening when and where
IRPM News
It’s happening, and IRPM professionals are leading the way
The long wait for government action on the regulation and qualification of residential managing and estate agents is over, writes Andrew Bulmer.
At least this is the end of the beginning, if still some way from the beginning of the end. Lord Best has been chosen to chair the MHCLG Working Group, formed to provide government with recommendations on regulating the sales, lettings and block management sectors and, crucially, to introduce a nationally recognised qualification for property managers. IRPM is at the table (see also Don't overcharge clients, IRPM warns below)
The working group is also tasked with making recommendations on a single code of practice and on associated fees/commissions. Two meetings are scheduled for November, suggesting that government wants swift progress, with final outputs in summer 2019. The working group will comprise IRPM, RICS, Propertymark, National Trading Standards, Prof Hodges, Leasehold Advisory Service, NLA, Citizens Advice and Ombudsman Services.
As I write this column, our 2018 Regional Roadshows are drawing to a close (see also Regional seminars – key take-aways below). It has been hugely rewarding to get around the country and meet so many members, and to take a sense test of the mood of the industry. I am delighted to report that there is real recognition of the importance of the customer in the day to day thinking and behaviours of managers; also a sharpening of health and safety practices and more strategic planning of maintenance and repairs. My own presentation pulled no punches; inviting managers to consider how today’s consumers really see us. I did wonder if I was pushing it a bit far, but most delegates really “got it”. Even better, some members are way ahead already! Those managers, with IRPM, are slowly shifting the dial, changing attitudes and behaviours and raising standards. It has been a privilege to meet, chat, listen to and learn from our members. As IRPM sits down with government, it feels good to have confidence in our professionals, who are leading the change for good. I thank you for that.
Finally, a big ask with a big hint. This is a call to action for every member. As part of the move to mandatory regulation, government will be looking at every organisation to see how its membership behaves and what value existing qualifications have. It is incredibly important that you complete your CPD records. Please, please, complete yours. And then encourage every other IRPM member you know to do theirs. If you are a boss or a team leader, challenge your team to get it done. It’s not hard - it takes only minutes but it will send a clear message to government that you take your qualification and your profession seriously. And remember, reading your Tech Updates counts towards your 15 hours. Do it now, while you remember. And thank you again!
Andrew Bulmer is CEO of IRPM
Regional seminars – key take-aways
Those of you attending this year’s regional seminars were left in no doubt that the working lives of property managers are about to change.
“Parliamentary time has been pencilled in at the back end of 2019 to tackle a tranche of leasehold legislation and change will start to filter through,” CEO Andrew Bulmer told members in Bristol, Birmingham, Brighton, and Manchester during September and October. And he delivered the same message in London on 1 November.
“I am invited to speak at conferences and meetings on a weekly basis. People want to hear what the IRPM has to say,” he confirmed. IRPM is a key part of the discussion around mandatory regulation and a nationally recognised qualification for property agents. The new working group set up to help raise standards in the industry (see Legislation below) will be considering who in the pyramid of management should be qualified and to what level. “These conversations start in November,” Andrew said, “and we are at the table”.
The CEO also emphasised the importance of the IRPM’s voice in improving regulations around best practice and highlighted how “Doing the right thing” engenders trust in the profession. “In future our technical competence will be viewed through the lens of ethics and behaviours, safety and customer focus”.
Other speakers at the seminars included Gwilym Lewis from Appsecco, who gave a practical presentation on improving cyber-security via simple tools such as two-factor authentication and password management apps. “Don’t leave it to IT – you have a responsibility too” was the key message.
More pleas for a responsible approach to a complex topic were delivered by Cardinus Risk Management associate director Steve Johnson, who spoke on reinstatement cost assessment. This is another trust issue, he said, underlining the fact that residents are reliant on block managers to ensure their homes are adequately insured. “Never rely on market value or development costs: insurance cover is based on many other constantly changing variables, so it’s important to revisit the buildings policy every three years”.
Dr Shaun Lundy from 4Site Consulting talked to members about health & safety – an issue that has been pushed right to the top of the block management agenda over the last 18 months. And IRPM Head of Professional Qualifications, Kevin Fairless, gave an entertaining presentation on the increasing importance of the customer experience in the property management sector.
The by-now traditional legal update, from Brethertons’ Roger Hardwick, took members through the latest key cases and sessions at all the seminars ended with two workshop sessions – one legal and one on health & safety. Other speakers around the country included Cassandra Zanelli from PM Legal Services, Bukola Obadun-Craigs from Brethertons, Chris Phelan from Cardinus and Gudrun Burnet from Peabody.
This year’s seminars proved really popular, so if you missed out this time round, don’t forget to book a ticket for an event near you in 2019. The date for the 2019 IRPM Annual Seminar to be held in London is 13 June, so put it in your diary now.
Don’t overcharge clients, warns IRPM
In October, the Government announced a new working group, with a remit to consider the best way to raise standards in across the property agent sector (see Legislation for more on this). IRPM has a seat on the working group and will be representing our members’ interests as it works with government to improve the way the industry works.
Among other issues, the group will be considering a standardised approach for presenting transparent service charges to leaseholders and freeholders and an easier statutory-backed process for consumers to challenge unfair service charges. The group will also be asked whether other fees and charges which affect both leaseholders and freeholders are justified; should be capped or banned.
Earlier this month, the IRPM cautioned that the minority of agents that charge excessive fees must learn from the example of the lettings industry, where hiked-up fees have caused government to simply ban all tenants’ fees outright.
Andrew Bulmer, CEO of IRPM, warns “agents that abuse their position by charging excessively for their work are not just in breach of the RICS Service Charge (Residential) Management Code, but also run a very high risk of forcing the hand of government to take away reasonable fees from good agents. Take note of the precedent just set by government on the costs of complying with the new Residents’ Association rules, where they expect agents to absorb the cost and not charge additional fees. The government have the consumer’s interests uppermost in their mind. In short, play fair on fees or lose them.”
If you are taking your IRPM Associate or Member exams in 2019, the dates for these and the pre-exam workshops have now been announced.
Associate exams will be taking place in London and Manchester in February, followed by Glasgow in March. There will also be Associate exams in London and Birmingham in September.
Member exams will take place in London in May and October 2019, in Birmingham in May and September and in Manchester in October. Scroll down to the Events section in this issue of the Technical Update for the full listing with dates.
Annual Seminar 2019 - don't miss out
Following our sell-out 2018 Annual Seminar in May, we are delighted to announce that for 2019 we will be moving to an even bigger and better venue – London’s QEII Conference Centre. This well-known venue seats 700 and is centrally located in the heart of Westminster. The event takes place on 13 June 2019 and will be the perfect opportunity to listen to property experts form a range of specialisms providing thought leadership, insight and practical support for property managers in our rapidly changing sector.
This year’s seminar was the biggest leasehold/build-to-rent event of the year, with more than 500 of you attending. The 2019 event will sell out fast so don’t miss the chance to catch up with other leading professionals in the block management market and pick up some CPD points at the same time. Early bird tickets will be available from 1 December 2018.
In the News
Labour slams government leasehold plans
Shadow housing secretary John Healey has condemned government plans to tackle unfair leasehold practices as “too slow” and “too weak” (source: Inside Housing).
In October Mr Healey criticised plans unveiled by housing and communities secretary James Brokenshire to cap ground rent and introduce measures to ensure the majority of home sales are freehold.
In a letter to Mr Brokenshire, Mr Healey said: “I have serious concerns about the government’s actions on leasehold reform to date, which have been too slow, too weak and largely overlooked existing leaseholders.
The government estimates that on average leaseholders pay more than £300 in ground rent each year, with some paying as much as £700. If the new cap comes into force the fees are expected to be reduced to a nominal £10.
Government issues warning over combustible window panels
The government has issued official advice to owners of high-rise buildings with combustible window panels, a month after Inside Housing revealed their widespread use in social housing.
In an advice note published in October, the government said it was “important” that building owners check the panels used “to ensure they do not present a risk of fire spread over the wall”.
An Inside Housing investigation in August showed there were at least 117 council-owned tower blocks across the country with retrofitted window panels, the vast majority containing combustible plastics. The government advice note said the “clearest way” to ensure buildings’ safety was to “confirm that materials are limited combustibility or better”.
“Where the panels do not meet this classification, the most appropriate means of remediation is to remove and replace the panels. However, professional advice should be sought first,” it said. Such panels are typically made of combustible insulation covered by a thin metal sheet. They are used for aesthetic purposes, but can also help architects meet insulation targets. These were typically installed in refurbishment projects between the mid-1990s and the late-2000s.
Eleven councils, collectively owning 747 towers, said they had no records of whether their buildings have panels, let alone the materials used to make them.These include the Royal Borough of Kensington and Chelsea, where Grenfell is located, and Southwark Council, which owns Lakanal House
Bellway sets aside £6m for cladding
Construction News reported in October that developer Bellway has set aside nearly £6m to cover the costs of replacing dangerous cladding across its developments.
The housebuilder revealed in its full-year accounts that it had made a provision of £5.9m to pay for remedial work on a “small number of developments” found to have dangerous ACM cladding.
Bellway becomes only the fifth developer to publicly commit to funding the replacement of ACM cladding, joining Barratt, Legal & General, Mace and Taylor Wimpey.
ARMA estimates that around £1.3 billion in unprotected client funds is held by UK managing agents.Believing there is a clear need for greater protection of leaseholders’ money, the trade body has launched a CMP (Client Money Protection) insurance policy in partnership with NFU Mutual, exclusively available to ARMA members.
This is the first CMP scheme to be set up exclusively for block managers, who despite holding large sums of money in client accounts, remain unregulated by government. CMP will be made mandatory for letting agents in April 2019 but similar regulation for block managers continues to lag behind.
Money held is made up of clients’ service charges and reserve and sinking funds, all held in trust in individual client accounts. It is estimated that 40% of all managing agents have no CMP in place, meaning that money would not be insured should theft or misappropriation take place.
What's new in HR?
Don’t get caught out at Christmas
Christmas party season is almost upon us and for employers this is a time to be aware of your responsibilities for the wellbeing of staff when attending work events – even when they are held outside office premises.
It’s important to ensure acceptable conduct at office parties and other work-related social events and this useful checklist from XpertHR might help.
• Be aware that employers can be held vicariously liable for the actions of their employees at office parties, if those actions are deemed to have been committed in the course of employment.
• Distinguish between those social events where there will probably be vicarious liability and social events that are unlikely to result in vicarious liability.
• Provide a clear policy on the standards of behaviour expected at office parties and what kinds of behaviour are unacceptable.
• At the office party itself, put two or three managers in charge of monitoring the activities of staff and their intake of alcohol.
• Take steps to protect employees from third party harassment.
Click here to find out more about vicarious liability.
Social Housing
Council borrowing cap to be removed
As this issue of the Technical Update goes to press, it is anticipated that Councils’ Housing Revenue Account (HRA) borrowing caps will imminently be scrapped.
Communities secretary James Brokenshire has written to the chief executives of all stock-retaining local authorities, presenting a draft plan for removing the cap. The new measures are expected to come into force on 30 October, the day after the Autumn Budget. From that date, it is anticipated that HRA borrowing will be restricted by the Prudential Code only.
Mr Brokenshire’s letter states: “We intend to remove the borrowing cap by issuing a determination revoking previous determinations that specified a local authority’s limits on indebtedness.” After that, the government’s proposed aim “is to remove the borrowing cap as soon as possible, with further details confirmed in the Budget”.
Regulator warns on social housing safety
The Government’s Regulator of Social Housing has told housing associations and boards they must have ‘appropriate’ safety controls in place.
The Regulator’s Sector Risk Profile 2018 report warns social housing boards that they must be clear about their health and safety responsibilities to ensure that both tenants and social housing management staff are safe. “It is important that boards understand the specific issues that they face, carry out adequate stress testing and plan meaningful mitigations,” said the Chief Executive of the Regulator for Social Housing, Fiona MacGregor. “We will look for assurance from providers that they have robust stress tests, internal control systems and appropriate risk management,” she said.
“The aftermath of the Grenfell Tower fire has seen unprecedented scrutiny of the social housing sector, landlords’ relationship with their tenants, and public interest in the sector’s wider social role. “In this context providers must show how they are delivering on their social purpose and objectives, and meeting their promises and commitments.
“Where things go wrong providers should be open and transparent and look to put the issue right as quickly as possible. Failure to do so could not only undermine stakeholder confidence in individual providers but also affect the reputation of the sector as a whole,” she added.
The Sector Risk Profile 2018 is available to read on the RSH website.
L&Q in tech trials for ‘smart’ estate management
Housing provider L&Q is talking to technology companies about how their products could help manage its estates as part of the association’s new tech strategy (source: Inside Housing).
AIM-listed Photonstar, which provides lighting products and cloud-based building management services, is thought to have entered into “partnership” with an unnamed association, understood to be L&Q. However, L&Q said it had only invited Photonstar to undertake “early trials” of its products and services to assess their potential to enhance safety and the ability of the association to remotely manage sites.
The association, which manages more than 90,000 homes in England, is working on new strategies for using technology to manage its estates, with further announcements expected next year.
Funding released to make social sector homes safe
The Ministry for Housing Communities and Local Government (MHCLG) has announced that 12 councils and 31 housing associations will receive funding for the removal and replacement of unsafe aluminium composite material (ACM) cladding from 135 buildings.
In total, £248 million has been released to social sector landlords to fund the removal and replacement of ACM cladding from high-rise (defined as 18 metres or higher) social sector homes.
The money is the first tranche of funding released from the estimated £400 million announced by the Prime Minister earlier this year and means councils and housing associations can make their properties safe without having an impact on their other vital services.
As this work is ongoing and costs are estimated (and subject to change), 80% of the estimated costs will be provided upfront to ensure work can start with no delay. The work will be closely monitored by the government and the remaining 20% will be paid once work is complete and the final costs are known.
Health and safety
Government announces private rental sector health and safety review
The government has announced a wide-ranging review of the health and safety regulations as they impact the private rental homes.
Under the existing regulations, councils must ensure private rentals meet current safety standards under the Housing Health and Safety Rating System. If tenants are found to be living in property that is deemed unsafe, local authorities can take enforcement action against landlords.
This system hasn’t been updated for more than 12 years, and the new review will consider whether - and to what extent - it should be updated. It will look at whether to introduce minimum standards for common health and safety problems in rental accommodation in order to keep renters safe. The review will also look into the provision of carbon monoxide alarms across all privately rented homes. At present landlords are only obliged to fit alarms where solid fuel is used.
IOSH calls for cladding ban to be widened
Safety experts have warned that a new government combustible cladding ban on new tower blocks does not go far enough (Source: SHP).
Speaking at the Conservative Party annual conference in Birmingham in September, Housing Secretary James Brokenshire said he would “bring about a change in culture on building safety” by banning the use of combustible materials for all new high-rise residential buildings, hospitals, registered care homes and student accommodation.
This announcement was welcomed by the property industry following numerous calls to ban the use of combustible cladding from a range of organisations, including the Royal Institute of British Architects (RIBA) and the Local Government Association.
However, the Head of Policy and Public Affairs at IOSH, Richard Jones, has warned that while banning the use of combustible materials on new high-rise residential buildings is “a step in the right direction”, it still does not go far enough.
The Chair of the Housing, Communities and Local Government Parliamentary Select Committee, Clive Betts agreed: “I welcome the Secretary of State’s announcement to ban combustible cladding but I am concerned that it will not be applied retrospectively and so not go far enough in providing the protection needed to those living or working in existing buildings with this cladding.
“I hope the Secretary of State will also move quickly to ensure that the current complicated web of building regulations, which compromises safety and puts people at risk in their own homes, is simplified and strengthened,” he said.
Housing associations should share fire safety information
Housing Minister Kit Malthouse suggested in October that the government may support proposals to require social landlords to give more fire safety information to tenants (source: Inside Housing). The comments were timely as they coincided with a number of large London providers announcing that they intend to start publishing fire risk assessments for their tower blocks. Currently, these assessments are kept private and are not provided to residents on request except in a small number of cases.
The Information Commissioner’s Office told housing associations they should publish risk assessments “proactively” and “in full” in August last year and Dame Judith Hackitt’s review of building regulations also calls for risk assessments to be made available to tenants.
However, as they are not public bodies, associations are not caught by the Freedom of Information Act, which means they cannot currently be compelled to release the documents.
Building safety information from MHCLG
Following the Grenfell Tower fire in 2017, the government established a comprehensive building safety programme that included an independent review of fire safety and building regulations.
The government response to the review confirmed, following consultation, a ban on the use of combustible materials on all residential high-rise buildings above 18 metres so that people are safe in their homes now, and in the future. Full details of the ban and how the recommendations of the Hackitt review will be implemented will be published later this year.
The latest figures show that more than 75% of social housing buildings with unsafe ACM cladding are currently removing and replacing it, with plans in place for the remaining 25%. Interim fire safety measures are in place in all affected buildings to keep residents safe until the cladding has been replaced.
PRS and B2R
Unanimous approval for B2R scheme in Sheffield
PLATFORM_, a leading developer and operator of private rented housing, has secured planning permission for 335 high quality homes designed exclusively for rent in Sheffield city centre.
The new development, located near to The Moor shopping centre and the Sheffield Retail Quarter, is less than a ten minute walk from Sheffield train station. It will deliver 335 homes in the Steel City, as well as a range of on-site amenities.
The site forms part of the wider £480m regeneration of the Retail Quarter, which is set to be completed in 2019.
£58.5 M debt financing for Liverpool Waters
Apache Capital Partners and B2R developer Moda have announced a new four-year £58.5 million senior debt facility, with an option to extend for two years, for their build-to-rent scheme at Peel Land and Property’s Liverpool Waters.
LaSalle Investment Management, provided the senior debt financing, which is secured on The Lexington, Liverpool at Princes Dock, Liverpool Waters through its fund LaSalle Residential Finance III.
A construction partner will be shortly announced for the £90 million development which is set to be Liverpool’s highest-specification build-to-rent scheme, The Lexington will reach practical completion in 2021 and represents one of the biggest single investments into Liverpool’s property market over the past few years.
Property manager fined for overcrowded HMO
A property management company which rented an HMO in Gants Hill to 23 adults in a house with a licence for six tenants has been fined £7,500 by Redbridge Council.
According to a report in Letting Agent Today, the tenants suffered from a lack of sufficient cooking, washing and toilet facilities. When neighbours complained about overcrowding, council enforcement officers found 16 people in the property with evidence of a further seven living there.
The managing agent in control of the property, Marvel Estates Limited of Forest Gate, initially appealed a financial penalty fine imposed by Redbridge council. However, the company later agreed to pay £7,500 following a central London tribunal.
Moda Living secures major investment
Moda Living has secured new institutional investment from National Farmers Union Mutual (NFUM) and North American investment house Harrison Street to fund seven new city centre build-to-rent schemes.
The new joint venture between Moda’s backers Apache Capital and Harrison Street, with additional investment from the NFUM, will support Moda’s plans to build more than 7,000 rental apartments. It is one of the most significant deals ever completed in the build-to-rent sector and marks the first time the NFUM has invested in build-to-rent.
The seven developments included within today’s announcement include The Lexington in Liverpool, Broad Street in Birmingham, Springside in Edinburgh, Holland Park in Glasgow, New York Square in SOYO, Leeds as well as two sites in London, which will be invested in over the next 20 months as they are brought forward for construction.
Trowers & Hamlins, JLL and Macfarlanes acted for Apache Capital. Dentons and DLA Piper served as legal counsel to Harrison Street. Gowling and Knight Frank acted for NFU Mutual.
Build to rent ‘soaring’ in the regions
New data shows that build-to-rent development is soaring, with the regions outpacing London. According to Q3 research from trade body the British Property Federation, around 132,000 build-to-rent homes are finished or underway, up by a quarter year-on-year. During Q3, around 23,000 build-to-rent homes were under construction in the regions, compared to around 18,000 in London.
Johnny Caddick, managing director of Moda Living, commented: "House price growth, demographic shifts and changes in consumer habits have seen renting more than double over the last 15 years. Many investors are looking to increase their exposure to build-to-rent as a defensive, counter-cyclical asset class."
Councils will pay landlords to rent properties
A new scheme that aims to increase the rental stock has been launched in Rochford, Essex. Rochford District Council is offering landlords cash payments of up to £5,000 to accommodate homeless families as a shortage of social housing means a new approach to finding homes is needed.
The council is making the funds available to landlords with long-term empty properties that could be brought back into use in order to help meet the local housing need. Anyone interested in the scheme should contact emptyhomes@rochford.gov.uk.
A similar scheme in London, being operated by Barnet borough council is also offering a grant to landlords – this time to help them bring empty homes back into use. Up to £25K is on offer to help get their properties onto the rental market, either by refurbishing them or converting commercial properties to residential use.
The size of the grant on offer depends on the property in question, with £15, 300 available for a one-bedroom property, £20,400 for two bedrooms and the full £25,000 for three bedrooms. To add an additional incentive an extra £2,500 is available for anyone signing up by 30 November.
Landlords or their property advisers wishing to apply for an Empty Homes Grant can call 0208 359 4359.
Scotland and Wales
Welsh Government will not pay for cladding removal
The Welsh Government has “no plans” to pay for the removal and replacement of unsafe cladding on six tower blocks owned by Cardiff Council, according to Inside Housing.
In June, the authority confirmed it would be stripping the high rises after their non-ACM cladding systems failed combustibility tests.
Despite agreeing in May to pay £3M to replace ACM cladding on three towers owned by Newport City Homes, a spokesperson for the Welsh Government said: “We currently have no plans to fund remediation work on non-ACM cladding.”
More cash for innovative housing fund
Successful bids for the second year of the Welsh Government’s £90m Innovative Housing Programme have been announced. The three-year fund, of which £43m was available this year, aims to support development projects that utilise novel construction techniques to speed up the building process, improve sustainability or reduce fuel consumption.
Rebecca Evans, housing and regeneration minister for the Welsh Government, said: “We are investing in our Innovative Housing Programme to reduce fuel poverty, reduce the impact of housebuilding on the environment, and reduce the health and well-being inequalities which are exacerbated by poor-quality housing”.
The Scottish Government has issued guidance on Sample Testing of Fire Doors, following recently issued guidance to Building Standards Managers, relating to the testing of Fire Doors by the UK Government's Ministry for Housing, Communities and Local Government (MHCLG).
An initial letter was issued on the 6 August to draw attention to issues about fire door tests. A second letter was issued on the 18 September providing an update. The fire door test guidance document can be downloaded here.
Compliance and Fire Safety Consultation Responses
Anyone who responded to the Scottish Government's recent recent consultation on Building Standards Compliance and Fire Safety can take a look at the other responses here.
A report on the consultation analysis will be available in early December 2018.
South Wales property booms as toll is scrapped
Property prices in south east Wales have soared since last year’s announcement that the Severn Bridge toll would be scrapped, according to research by online estate agents Housesimple.com
Land Registry property figures reveal that since the decision was announced in the summer of 2017, average sold house prices across the three Welsh local authorities closest to the Severn Bridge - Monmouthshire, Newport and Torfaen - have increased 13.2% - more than four times average price rises across the UK over the same period.
Torfaen, which is just 34 mins from the bridge, saw property prices boom 11.9% since August 2018.
Comparatively, average house prices in the three local authorities in England closest to the bridge, have gone up just 3.1% over the past 12 months.
Scottish regulator wants annual statements from social landlords
The Scottish Housing Regulator has launched a consultation on the future of social housing regulation in Scotland, which includes the proposal for ‘annual assurance statements’ for local authorities and housing associations.
Under the proposal, social landlords would send statements to the regulator setting out, with evidence, how they are meeting the standards in the Scottish Social Housing Charter and regulatory requirements.
The regulator would require that the statements be submitted between April and October each year and they should be made available to tenants and other service users.
Welsh HA building falls by a third
Welsh housing associations have seen construction of new homes fall by more than a third in the last year, according to official statistics.
Figures released yesterday by the Welsh Government show housing association completions fell 35% over the period compared with the previous year.
However, Community Housing Cymru (CHC), which represents housing associations in Wales, said the sector is still on track to help deliver ministers’ target of 20,000 new affordable homes between 2016 and 2021. Overall housebuilding also fell, with private sector completions decreasing by 12%.
Work started on a total of 6,002 new homes, 19% less than in the 12 months to the end of June 2017. However, local authority building increased eightfold, with 99 new council homes completed, compared with just 12 in the previous year.
Legislation
Tenants' Fees Bill to be debated on 5 November
November 5 is the next key date for the passage of the Tenants’ Fees Bill, the measure which is likely to result in the banning of letting agents’ fees levied on tenants (source: Letting Agent To-day).
The key issues likely to be discussed at committee stage are first, the level of the cap on the security deposit: at earlier debates in the Lords, some members raised concerns that the cap should be reduced, possibly to four weeks rent.
Second, there will also be debate on the inclusion of default fees with so-called ‘reasonable costs’. This has been raised by pressure groups such as Shelter and Citizens’ Advice, which suggest the wording be tightened to prevent rogue agents inserting unnecessary charges in under the ‘reasonable costs’ banner.
Two further points likely to be debated at committee stage next month will be the grounds under which a holding deposit can be retained by a letting agent or landlord, and issues pertaining to homelessness - feared, by some, to be an inadvertent by-product of the ban on fees.
The committee stage of a bill usually takes between four and eight days The bill will then go to the Lords Report Stage and then a Third Reading. This is followed by Royal Assent - and then it becomes law. This remains scheduled for spring 2019.
Changes to Tenants Association Regulations come into force
The government has issued the Tenants' Associations (Provisions Relating to Recognition and Pro-vision of Information) (England) Regulations 2018 (SI 2018/1043) relating to recognised and relevant tenants' associations. The regulations apply in England only and come into force on 1 November 2018. To see a copy of the regulations click here.
Government promises reform for leasehold sector
Earlier this month, the government released its latest consultation, Implementing reforms to the leasehold system in England, which sets out to tackle problems being faced by leasehold homeowners.
In 2017, the government finally recognised the need to improve fairness and transparency in the leasehold market and pledged to close some of the loopholes that harm the consumer. This was followed by a consultation last December on the sale of leasehold houses and onerous ground rents.
This latest consultation paper sets out the Government’s four key areas of reform and is asking for views on four key measures. These are:
- A ban on unjustified use of leasehold for new houses.
- Reducing future ground rents to a nominal (affordable) sum.
- Ensuring that the charges paid by freeholders towards maintenance of communal are-as are fairer and more transparent, as at the moment they do not have the same rights as leaseholders to challenge the reasonableness of the service charges levied and the standards of the services provided.
- Improving the system for selling leasehold properties.
In the consultation paper, the Secretary of State for Housing, Communities and Local Government says, “Now I intend to deliver our promises”. It remains to be seen whether he will prove to be as good as his word.
Read the consultation in full here. The deadline for responses is 26 November.
Regulating property agents – have your say
After years of discussion about the way the property industry is regulated, the government has finally decided to bring property agents into line with the other professions and set minimum entry standards for lettings, estate and managing agents. A working group, chaired by Lord Best, to develop a new regulatory regime has been set up and its terms of reference have been published. In particular, the working group will be responsible for advising on:
- Setting up an independent property agent regulator.
- A legally enforceable code of practice for letting and managing agents, and whether some-thing similar could be provided for estate agents.
- qualifications and continuing professional development for letting, managing and estate agents.
- developing a system for delivering transparent service charges to leaseholders and free-holders.
- an easier system allowing consumers to challenge fees and service charges.
- whether other fees and charges which affect both leaseholders are justified; and whether these should be capped or banned.
IRPM has a seat on this working group and will work with government to raise standards and improve the way industry works. The public good is best served by having a competent, viable and ethical management sector delivering good service and outcomes for consumers while properly rewarding responsible agents who work to high standards and behave ethically. The working party is expected to report its findings to government next summer - so watch this space…..
Legal Update
To qualify or not to qualify… as an S20 long-term agreement
Following on from May’s decision in Corvan v Abdul-Mahmoud, Mark Loveday takes a look at another case that tackles the thorny issue of QLTAs
The background to this case is Corvan v Abdel-Mahmoud decided in May of this year. Corvan decided that an agreement between a landlord and a managing agent could be a Qualifying Long Term Agreement under s.20 Landlord and Tenant Act 1985, if it was for a period of over one year. The Upper Tribunal decided that the question was whether the term of the management agreement must exceed 12 months, rather than there being a mere intention or expectation that the services may be provided for a period extending beyond 12 months.
In Corvan, it was held that the agent’s written retainer exceeded one year, and it was therefore necessary to go through the full statutory consultation process with leaseholders before entering into it. Failure to do so limited the agent’s fees recoverable from each leaseholder through the service charge to £100 per flat.
In the splendidly-named case of Bracken Hill Court at Ackworth Management Co Ltd v Dobson, [2018] UKUT 333 (LC), Upper Tribunal, the lessee-owned management company employed a managing agent, and sought to recover the costs of the agent through the service charge.
The leaseholders raised a similar argument to Corvan. But the agreement with the managing agent was oral. The agent gave evidence in the F-tT that the management agreement was “renewed annually” over the phone with a director of the management company for 364 days (or for one year). The F-tT held that the agreement was subject to the consultation requirements and that the managing agent’s fees were effectively capped at £100 a year per flat.
On appeal, the Upper Tribunal found that the F-tT was wrong. The only evidence (from the agent) pointed towards the management agreement being for no more than 12 months. It said that “the fact that as a matter of history the parties have renewed the contract each year does not alter the fact that, upon the proper construction of the contract between them, the contract was only for 364 days (or for one year) and would not last longer than that unless it was renewed”.
Practical Points
Corvan was a big worry for managing agents. It is rare for them to consult lessees about their own management fees. But the issue only really arose in the first place because the agents did not have a written management agreement – contrary to para 6 of the IRPM Code and to para 3.2 of the RICS Residential Service Charge Management Code (3rd Ed). The latter specifically requires agency agreements to state the “duration” of the retainer. The moral is, ensure you get a fresh written retainer every year.
Other must-read cases
Cheerupmate2 Ltd v Calce [2018] UKCA (Civ) 2230, Court of Appeal, 4 October 2018. A landlord had not validly forfeited a 900-year lease of premises in Hyde on the basis of arrears of ground rent of £2 a year. The landlord had given the tenant a preliminary notice under s.166 of the Commonhold and Leasehold Reform Act 2002, but the notice was in an outdated form - and invalid.
Duval v 11-13 Randolph Crescent Ltd [2018] EWCA Civ 2298, 18 October 2018. Where several leases in a block of flats had covenants (i) prohibiting cutting into walls etc., and (ii) requiring the landlord to enforce the terms of the leases of other tenants, the landlord was in breach of the lease if it gave any lessee a licence to cut into the walls.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
Talking points
Why Excel is dead (as a block management system)
Are you still using Excel for portfolio management? Ben Gallizzi asks whether a specialist block management system could offer a better solution
When it comes to block management, there’s so much to think about that managing agents should be taking advantage of any opportunity to make their lives easier. However, there are still block management companies out there using systems like Excel, which could never be classed as a specialist block management tool, to manage their entire portfolios.
Excel is a difficult system to use and to get the best out of. In addition to having to manually enter all the data required to keep records up to date, if any data is entered incorrectly it can have a serious knock-on effect which could cause significant financial damage (and worse) to the company. One minor error can affect all data entered after it; this could snowball into a huge issue for the company that can take a huge amount of effort to find and rectify. There is also GDPR compliance and the robust management of contractor certifications to consider.
With this in mind, it makes more sense for block managers to consider using a specialist system that does all the hard work for them.
Accountability
Specialist systems allow companies to look at how they are handling repairs and maintenance as a whole. They can see how contractors are performing, which is important – for example, a main KPI could be how quickly contractors turn the job around. Additionally, companies can set targets and publish reports to customers, making their overall operations - in addition to the individual work of their block managers - fully accountable.
Planned maintenance
As far as successful block management is concerned, planned maintenance is key. The ability to arrange tasks like smoke detector and lift inspections ahead of time helps to ensure that they will never inadvertently become non-compliant. A specialist system can enable block managers to view their entire portfolio across one dashboard to see which checks and certificates are due for renewal. With block management companies periodically in the news for breaching safety regulations, the ability to draw on planned maintenance capabilities within a system designed to be used in that capacity can only improve efficiency.
Contractor management
One of the most important responsibilities that block managers will have to handle on a regular basis is the selection and management of contractors working on the various parts of the block that need to be repaired or maintained. One of the key features that specialist block management software offers is the ability to upload and track certifications and insurances that indicate whether a contractor is legally allowed to operate. If they are instructed but their documents are not valid, block managers could be liable for prosecution and fines. Visibility in terms of whether they’re allowed to work, therefore, is a vital aspect of block management compliance that is automatically updated and easily viewable within a dedicated system, as opposed to on an Excel spreadsheet that might not be updated regularly.
Growing a portfolio
In terms of the wider issues around growing a portfolio (something all property management companies are concerned about), specialist systems allow companies to provide and, vitally, demonstrate a better service both internally and externally. They can have confidence that potential customers can see that they will meet their goals – showing is always more powerful than telling!
Ben Gallizzi is Content & Social Media Manager at Fixflo
Serving eviction notices - could a paralegal help?
Amanda Hamilton from the NALP advises using a paralegal to ensure that block managers who find themselves having to serve an eviction notice on a tenant, are able to deal with the situation as efficiently as possible
If you’re in the unfortunate position of needing to evict a tenant due to non-payment of rent – what can you do? There are two routes that can be taken; either by serving a Section 21 Notice of Possession or a Section 8 Eviction Notice under the Housing Act 1988.
A Section 21 Notice allows you to take back the property at the end of a fixed-term tenancy agreement or if there is a break clause. You do not have to provide any reason to claim possession. Alternatively, a Section 8 Eviction Notice comes into play when there are grounds for eviction if the tenant hasn’t paid the rent, is being a nuisance to neighbours or has damaged the property. Both notices produce the same outcome – you get your property back.
However, it is essential you have followed the correct procedure or your claim may fail. If you are not comfortable doing everything yourself it can be worth taking on the services of a paralegal who can offer the same advice as a solicitor but will generally charge considerably less. Before appointing one, just check they belong to a recognised membership body such as the NALP and have a licence to practice with the proper indemnity insurance in place.
Whether you are doing it yourself or engaging a paralegal to act for you, you need first to decide which eviction method suits your needs most.
Section 21 Notice - You must give the tenant no less than two months’ notice, telling them that you need them to vacate the premises. The Section 21 is only valid for six months from the date of issue. If the tenant does not comply with the notice, you will need to prove to the court that a notice was served. To do this, it’s important to serve the notice by hand, with a witness and to keep a copy.
Section 8 Notice – this gives the tenant two months to leave the property. Start by writing a letter to the tenant giving notice that the rent has not been paid and letting them know that if it is not paid immediately you will take action to remove them. When serving a Section 8 or a Section 21 you must follow the correct procedure and have all your tenancy paperwork (including deposit, inventory etc.) up to date.
Even if you have good grounds for eviction, it’s sometimes worth serving a Section 21, instead of Section 8 if the tenancy is coming to an end or a break anyway.
Once the correct forms have been served, your tenant is legally obliged to leave on the specified date. If they don’t, you can apply to the court for a possession order. You can either keep the tenant on and sue in the county court for the arrears of rent, or you can opt for the possession order straight away to terminate the agreement. It is worth remembering that it is a criminal offence to evict a tenant by any means other than obtaining a court order for possession.
If the tenant fails to vacate, you will need to use county court bailiffs; this is where following the correct procedure will be open to scrutiny. Depriving someone of their home is a serious matter and judges expect landlords to follow the proper procedure and have perfect paperwork. If the Section 21 Notice has been properly served, the good news is, the landlord is entitled to possession by default.
More information to enable you to do this for yourself can be obtained online
Amanda Hamilton is Chief Executive of the National Association of Licenced Paralegals (NALP), a non-profit Membership Body and the only Paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its training arm, NALP Training, accredited recognised professional paralegal qualifications are offered for a career as a paralegal professional.
See: www.nationalparalegals.co.uk
Twitter: @NALP_UK
Facebook:
LinkedIn - NALP - National Association of Licensed Paralegals
Topic of the month
Major interiors works: getting buy-in from residents
Belvedere Court, an iconic grade II listed building designed by the architect Ernst Ludwig Freud has recently undergone a refurbishment to its common parts, bringing it back to its former glory. Designer Sam Bheda, who was commissioned by the RMC directors to oversee the design and redecoration works offers some insight into how block managers and residents can get the best out of their interior design – and their designer.
Belvedere Court was built in the 1930s for rental only and mainly let to Jewish families from Europe, moving to Britain to escape the Nazi occupation. The flats incorporated modern facilities, including waste disposal chutes, fully fitted kitchens and central heating. The block is a fine example of ‘moderne’ design and is characterised by streamline pavilion windows, stone bands, stepped entrance surrounds, crittal windows and a number of other architectural features which are typical of the period.
Like many London blocks, the common parts hadn’t been redecorated for some time, around 15 years in this case, so they looked very dated - the walls had previously been rag-rolled in a peachy colour and the carpet looked tired. The interior didn’t live up to the prestige of the building, so it was important to bring the block back to life by developing a scheme that would be sympathetic to the period architecture and at the same time be inviting and comfortable for the residents of Belvedere Court.
The vision for the project was to design a space that would re-capture the elegance of living in a 1930s apartment block. This included developing the interior design concept, the colour palette and materials, the design direction, sourcing products from specialist suppliers as well as designing bespoke items.
As far as redecoration projects go this was fairly complex, as there were also multiple parties involved from the residents and block directors, to the professionals and specialist contractors and suppliers. All-in-all, the works took about a year but the end result has been very well received by the residents of the block. The financial investment is also paying off, with one local estate agent confirming that the flats have benefitted from an uplift in property values of approximately 5-7%.
Regular communication to keep everyone informed
One of the difficulties with projects of this nature is the contradicting views from the various stakeholders involved, so the consultation and planning stages are crucial. Initial meetings with key project stakeholders often present an opportunity to help shape the brief and to put forward ideas and suggestions that residents may not have considered. In order to get buy-in from residents, it’s helpful to have a meeting at the early stages of a project where they can put forward their views about the improvements they would like to see to their block. Establishing a sub-committee to represent the views of residents, especially if it’s a large block, is also a good option. Open and transparent communication between all the parties and stakeholders involved is vital - residents should be kept informed at strategic points throughout the process and RMCs/other professionals must always be aware of progress at each stage, about any issues that come up, delays and so on.
Planning ahead and establishing timescales
Residents should also have a clear understanding of what works are required and when they will need to take place. Planning ahead and being organised is essential because much of the design work will need to start first and will essentially inform the content of the s20 notices issued, estimates obtained from contractors and so on. An interior design project, from the initial researching and concepts through to sourcing and specifying, can take a long time so this should always be borne in mind. Remember that at key stages, consultation with residents and RMCs will be required. If listed buildings consent is needed, the timings will need to allow for this. And with every project there will always be delays so build in some contingency.
Establish a realistic budget
Establish a realistic budget based on the scope of the project. It is important to shape the budget based on an understanding of what the client requires from a design and decoration perspective.
Involve the block manager
Block managers also have a key role to play in getting buy-in from residents by ensuring their interior designer fulfils a few key tasks including:
- Research the block - A newly designed interior, particularly where historic mansion blocks are concerned, should be contextual to the style and architecture of the building as well as its location. Understanding the historical context will help shape the design ideas and the end result will be more sympathetic.
- Produce mood boards and samples - Produce mood boards that convey the design direction and thoughts on colours and materials to be used in the project. Once approved, the designer can source the specific items that will be used and present these to the residents, ie samples of flooring, paint colours, artwork and other decorative finishes. Design is an evolving process and during the project, there may need to be some refinements based on feedback.
- Oversee the scheme to successful completion - The designer should work alongside the block manager to establish the specification for tendering out the works to contractors then oversee the works alongside other professionals such as architects and surveyors. Regular site meetings with the property manager/surveyor can help ensure the design scheme is being implemented in accordance with the brief. There are many decisions required while the works are in progress and problems often arise that need design input, so it’s important that the designer is engaged until the project is successfully completed.
To see more details from this project, you can visit Sam Bheda’s website studio@sambheda.com
Events
6 February 2019 – Associate Exam Workshop, London
7 February 2019 – Associate Exam Workshop, London
26 February 2019 – Associate Exam, London & Manchester
26 March 2019 – Associate Exam in Glasgow
3 April 2019 – Member Exam Workshop, London
4 April 2019 – Member Exam Workshop, London
9 May 2019 – Member Exam, London & Birmingham
13 June 2019 – Annual seminar
14 August 2019 – Associate Exam Workshop, London
15 August 2019 – Associate Exam Workshop, London
11 September 2019 – Associate Exam, London & Birmingham
11 September 2019 – Member Exam Workshop, London
12 September 2019 – Member Exam workshop, London
26 September 2019 – AGM 2019
26 September 2019 – Fellows Day 2019
15 October 2019 – Member Exam, London & Manchester
ARMA
To book
IRPM members (associates and above) can attend ARMA courses at the discounted ARMA members rate.
LEASE Webinars
LEASE has many
Brethertons Webinars
IRPM members get a substantial discount on the charges for these webinars.
ARLA Propertymark
To book courses for 2018.
Chartered Institute of Housing
For more information on their events visit their website.
National Leasehold Group
For their seminar listings
RICS (open to non-RICS members)
For all RICS courses
