Tenant Info
The following information will be of interest to the any new tenant of a block of flats under our management.
But will also be useful as a reminder to existing tenants.
Congratulations on Your Lease Assignment
Congratulations on your assignment of a long lease to residential premises; that is to say, a lease for a term of 21 years or more for a part of a building (i.e. a flat in a block of flats).
Your conveyancer should, if they have not done so already, register your details with Land Registry to note that you are the tenant of the long lease for the premises and they should provide you with a copy of the leasehold title in that respect.
During your conveyance leading up to your agreement to take assignment of the long lease and to be bound by its terms and conditions we would usually be asked to provide replies to the Law Society pre-contract "LPE" management enquiries and when doing so we provide a bundle of management documents for due consideration during the conveyance.
By way of our said management replies we advise any prospective tenant to obtain a full building survey report carried out by a Building Surveyor who not only reports on the condition of the premises but also on the condition of the block as a whole because the costs incurred in maintaining and repairing the block and the provision of its communal services are apportioned to each tenant of the block to form part of their leasehold service charge liabilities.
We also advise that you obtained adequate legal advice about the meaning and intention of the terms of your lease, the outcome of your building survey report and our said management replies.
We also advise to obtain a full copy of the long lease for the premises to which you can always refer to, and also a summary of that lease written in layman terms by your conveyancer.
Our "Welcome Leaflet" provides the following important general information about living in a block of flats under our management and which covers the following topics:-
Additional Management Regulations / Tenant Reply Forms
In accordance with our additional management regulations, the following forms are for tenants to print out, complete and return to us when required if/when their circumstances change and/or when we request such :
Please do provide us with those completed forms as and when necessary to inform us of a change in your contact details or circumstances.
Bank Details for Remitting Settlement of Leasehold Charges
Throughout the term of your tenancy you are required to pay leasehold charges, such as service charges and perhaps a ground rent and/or insurance rent. Other charges (administration fees) may also become payable from time to time.
We allocate you a "Tenant Reference" (being a set of digits in the following form nn/nnn/nnn) and using that reference we maintain for you a “Tenant Account” to record your leasehold charges raised and your payments received against those charges.
We would wish to encourage you to use your bank’s internet or telephone banking facilities to remit payments by bank transfer into our client deposit bank account used specifically for the receipt of tenant payments.
Your bank should be able to advise how you can arrange to make such electronic payments if you are unsure yourself.
If you must remit payment by cheque then an administration fee of £3.50 must be applied for the handling of any cheque. This is because it is quite rare these days to receive a cheque and must then make a visit to our branch to deposit just one cheque and then we must await at least 5 working days to for clearance.
Our client deposit bank account details which you should use to remit payments towards your leasehold charges are:-
Bank: HSBC Plc at 1-3 Warwick Street, Worthing, BN11 3DE
Sort Code: 40-47-25
A/C No. 63668576
Payment Ref: nn/nnn/nnn (being your tenant reference)
Demands for payments shall be issued to your 'address for service' by first class post and accompanied by relevant supporting information which you should carefully read and retain for your records. Therefore, please use the relevant form (as listed in the above mentioned list of forms) to notify us of any change to you 'address for service'.
Bank Details for Remitting Settlement of Administration Fees
From time to time there may be occasions where we either pre-agree with you (or any authorised representative) the provision of a service, or must otherwise provide a service relating specifically to you, and for which we must charge you an administration fee as opposed to our fee forming part of our overall management fee payable by our client and recharged via the block's service charge provisions.
Such occasions may be when you need to: apply for consent before altering the leasehold premises, apply for consent before keeping a pet, provision of management information to assist you in a proposed lease transfer or securing a mortgage/loan against your lease, provision of information and/or copy documents as and when you request such, etc.
On these occasions you (or your representative) shall be provided with a fee invoice upon which our business bank account details shall be noted; being different bank account details to those used when remitting payment of leasehold charges.
Within each long lease to a block, there is usually a tenant covenant requiring each tenant of the block to pay their service charges promptly and for the benefit of each other.
Each tenant's lease may also have a "mutual enforceability covenant" allowing one tenant to ask their landlord to take action on their behalf against another tenant for their breach of covenant, such as the non-payment of service charges.
If a "mutual enforceability covenant" is not provided in a lease then, nevertheless, it may still be agreeable for the landlord and tenant to agree such separately.
These usual contractual provisions in a residential lease are made to help enforce the payment of service charges from a defaulting tenant due to the importance for service charges to be paid promptly.
Service charges are the 'life blood' of a block.
Without service charges being paid by each tenant, the ability to arrange to insure or maintain the block will be difficult and the provision of services (such as cleaning, grounds upkeep, etc.) may have to be postponed until service charge arrears are resolved.
What are service charges?
Service charges are charges payable by the tenant of leasehold premises to their landlord (or managing agent duly acting on behalf of the landlord) and being their agreed contribution towards costs incurred for the provision of services the landlord provides under the terms of the lease.
The service charges will vary from year to year depending on the costs the landlord incurs (or does not incur).
Examples of service charges
Service charges can include maintenance and repair (and sometimes necessary improvement to comply with regulations) of the structure, exterior, roofs, foundations, guttering, communal drains and pipes and common areas.
Service charges can include the cost of providing the necessary insurance covers required at the building.
Service charges can include costs for professional advice and services, such as the fees and disbursements of surveyors, risk assessors, accountants, solicitors and managing agent.
Service charges can also include taxes; Insurance Premium Tax (IPT) and Value Added Tax (VAT).
This list is not exhaustive and tenants should check their lease for the full details of service charges payable.
When are service charges payable?
The lease will state when service charges fall due.
Service charges may be payable annually at the beginning of the calendar year (January) but would more usually be payable twice yearly or perhaps quarterly on any of the 'accounting quarter days' on 25 March (Lady Day), 24 June (Midsummer Day), 29 September (Michaelmas) or 25 December (Christmas).
Most modern leases allow for service charge to be payable in advance of the landlord incurring the costs, based on an estimate of costs in the coming year.
Some leases however, usually older ones, allow recovery in arrears on an as-and-when basis. In other words, the the landlord has to incur the cost first and can then apportion and recover from the contributing tenants.
Estimated costs and final account (balancing service charge)
As mentioned above, the lease may state that the landlord estimates what he is going to spend in the coming year and bases the service charge on that estimate.
If this is the case, most leases require the landlord to produce an end of accounting period statement of account to summarise what has actually been incurred and supply this to each tenant.
If the statement of account shows that the landlord has incurred more than estimated the lease will normally allow for the shortfall to be recovered via a” balancing service charge” served to the contributing tenants.
On the other hand, if the statement of account shows that the landlord has incurred less than estimated the lease may state that a credit for the over-payment should be carried forward as a credit to the tenant's next yearly payment. Or, more usually, the over-payment may be transferred to the “reserve fund”.
Because the service charge provisions can vary from one leasehold scheme to another, those provisions must always be considered in each case.
Reserve Fund
Also known as a “sinking fund”, some leases allow the landlord to demand a contribution, via the service charge, to go into such a fund.
The purpose of such a fund is to build up a fund to help defray the costs of future larger scale works, such as repainting/redecorating the whole building or the interior common areas.
Using such a fund should mean that tenants will not face such a large one-off service charge demand when the work becomes necessary.
IMPORTANT
It is important to remember that there is no element of profit to the landlord in service charges.
Save for any reserve fund contributions and any agreement in the lease for any over-payment of the estimated service charges to be retained in the reserve fund, a tenant's service charge liability is their agreed proportion/percentage of the actual costs incurred by or on behalf of their landlord.
In other words, save for any reserve fund contributions, a tenant does not contribute to costs which have not been incurred.
Further Independent Information
See also the following industry leaflet: The Money – Service Charges and Ground Rent in Leasehold Homes
This information is subject to our website disclaimer set out at the foot of this webpage.
IMPORTANT: As an additional management regulation (if not already an express requirement of the long lease for the subject premises) you will need to apply for consent before being permitted to sub-let your leasehold premises or to continue any sub-letting arrangement for which you have not yet received consent.
To apply for consent to sub-let your leasehold premises please print out, complete and return our Sub-letting Checklist together with the other required documentation as stated within the explanatory notes accompanying our checklist.
Hamilton Fraser, the parent company of the Property Redress Scheme, publish some useful guidance notes on their website for landlords, including 'How to ensure you are compliant' and 'Are you compliant with the Homes (Fitness for Human Habitation) Act 2018'.
LandlordZONE is another useful website containing useful guidance notes, including 'Letting for the First Time' and their 'Lettings Document Checklist' and 'Property Repairs and Maintenance' in which is mentioned that "The landlord will also be responsible for parts of the building or land which does not form part of the tenancy, for example common parts and parts retained for the landlord’s own use."
The Private Rented Sector Code of Practice (“the PRS Code”) explains landlord's obligations in detail.
The government has also published on its website a number of ‘how to’ guides.
Introduction
Due to the complexities caused by sub-letting leasehold premises, it would be our preference and the preference of our clients if those people who are leasing premises in the buildings under our management did not do so. However, there is usually nothing in a residential long lease which can totally prevent sub-letting. It is extremely important therefore for those who choose to do so know fully what their obligations and liabilities shall be before they do so.
This article intends to give an insight into the complexities and difficulties which sub-letting of leasehold premises will cause but is provided subject to our disclaimer at the foot of this website and is in no way intended to be advice; legal or otherwise. Before embarking on sub-letting residential leasehold premises you should obtain your own and adequate legal advice and professional assistance.
Landlord Insurance Cover
When placing leasehold premises into the Private Rented Sector (PRS) to sub-let, you become the immediate landlord of the premises and subject therefore to extremely onerous 'landlord obligations' including: extensive 'repairing covenants', 'housing fitness obligations', but subject also to 'tenant rights'.
Therefore, you should obtain your own landlord insurance policy based on a carefully considered 'demands and needs' statement which considers all of the associated landlord 'risks and potential liabilities'.
Code of Practice To Be Followed
The Government continues to crackdown on poor practices of landlords and their agents who operate in the PRS.
It was reported that, in 2017, Citizens Advice had to help 65,000 private renters with more than 100,000 problems about their tenancy. However, the number of unreported tenants in the PRS who were suffering from poor practices in the PRS would have been much much higher.
The Government is therefore committed to ensure everyone has a decent, safe place to live, and with landlords fully complying with their obligations and has therefore published a number of ‘how to’ guides, which include checklists for new and existing tenants, landlords and letting agents to help ensure they are aware of, and can comply with, their legal responsibilities.
The Private Rented Sector Code of Practice (“the PRS Code”) explains landlord's obligations in further detail.
To Obtain Consent BEFORE Sub-letting
This agency and its clients support the Governments' commitments, and the wishes of the property industry generally, to help improve standards and this includes, when required or deemed necessary, imposing additional management regulations on those who choose to place their leasehold premises into the PRS to require only adequately arranged and controlled sub-letting arrangements for any leasehold premises within a block of flats under our management.
For all these reasons one should not proceed with, or continue, any sub-letting arrangement without either being an accredited landlord themselves or employing the services of an accredited letting agent who can advise and assist.
Use of Flats - Private Residence Only and for One Family Only (i.e. NO 'AirBnB' style lettings)
Whilst the lease must be checked in all cases, generally speaking, residential leasehold premises are leased by the freeholder of the building for the purpose of “residential dwellings”.
There will most usually be a user covenant stated in the lease to the effect that the premises is to be used as a “private residency only” and/or “for one family only” . In other words, the premises must be used as someone’s only or main home whereby they would be registered with the council as liable to pay the council tax and there must be no lodgings, or other such shared use.
Furthermore, there would also be a restriction such as "Not to underlet or part with possession of any part of the Premises ("any part" meaning less than the whole)" meaning that if there is, for example, a parking space and/or garage included in the demised premises then one could not, for example, sub-let the living accommodation (i.e. the flat) without also sub-letting the parking space and/or garage to be used with the living accommodation.
Landlord's 'Repairing Covenants'
Your 'landlord obligations' will include extensive repairing covenants which you make with your tenant and which you must observe and perform in return for the rent to be received.
Your repairing covenants should be expressly stated within the Assured Shorthold Tenancy (AST) contract you grant to your tenant but, nevertheless, Section 11 of the Landlord and Tenant Act 1985 will imply into the AST the minimum repairing covenants as if they have been expressly stated. Further information in this respect is set out at the bottom of this article under the heading "A Landlord's Statutory Repairing Obligations".
Your repairing covenants apply not just to the inside of the premises but also to the structure and exterior and all other parts of the building in which you, as the landlord, have an "estate or interest" and can be generally summarised as follows but please do consider obtaining adequate legal advice on the subject:-
TO KEEP SAFE AND TO PUT AND KEEP IN REPAIR
the leasehold premises and its appurtenances and any remainder of your 'leasehold estate’
TOGETHER WITH
the installations at the premises including those for conveying the utilities, heating, hot water, waste and soil
AND TOGETHER WITH
all parts of the ‘structure and exterior’ of the building (including but not limited to the drains, gutters and external pipes)
AND TOGETHER WITH
the remainder of your ‘interest’ which includes the common parts over which you shall be granting, or have granted, a use to your tenant (the 'associated common parts')
SO FAR AS
any disrepair or risk could affect your tenant's permitted use of the premises or its installations or appurtenances or of the associated common parts
Landlords General 'Duty of Care'
Associated with the aforesaid repairing covenants is your general and implied 'duty of care' owed to your tenant and any visitor.
This will not just involve keeping matters in repair but will also include having to deal with safety and security matters (risk assessments).
Fire Safety
You are also deemed to be a 'Responsible Person' at the building with regards to fire safety relating to the premises you are sub-letting and its associated common parts and must therefore comply with the fire safety requirements and to co-operate and co-ordinate your activities with the other responsible persons of the building.
Fitness for Habitation
As of March 2019, the Homes (Fitness for Human Habitation) Act 2018 extends the above said repairing obligations to consider "prescribed hazards", including any "unfit" hazard, such as:-
Dealing with Reports of Disrepair, Unfitness, Safety or Security Concerns
As the landlord of the premises you MUST act on reports from your tenant about any disrepair, unfitness, safety or security concerns and make adequate arrangements with a suitable and competent and fully insured tradesman; obtaining prior written consent from, or on behalf of, the freeholder of the building before carrying out any repair to the structure or exterior of the freeholder's building, or in any of the common parts, or before carrying out any installations, alterations or improvements within the leasehold premises.
It may well be that there are others at the building who are also sub-letting their leasehold premises, in which case, the obligations may be considered "joint and several" whereby the first landlord who becomes aware of the concern should make the necessary arrangements to deal with the concern but who may then wish to notify the other applicable landlords to, perhaps, share in the consequential costs.
A main entrance door to the building, or a lift, are examples of common parts which may be used by anyone renting a sub-let flat thus, would likely fall to the repair obligation of more than one landlord at the building.
For all of the reasons mentioned above, you should have an established policy and procedures for:-
Could one "pass the buck" so to speak, so that the said statutory "Section 11" landlord repairing obligations could be "passed up the chain" to instead be carried out under the repairing arrangements agreed by the Leasehold Scheme?
You should not expect for matters which you have subsequently agreed to become responsible for as a landlord of the premises and associated common parts to be carried out under the leasehold scheme (as would be the case if you were occupying the premises as your own home).
You must consider that Section 12 of the Landlord and Tenant Act 1985 bars a landlord from relying on any agreement collateral to the tenancy you have granted (such as your long lease which forms part of the leasehold scheme) from excluding or limiting their repairing obligations.
Furthermore, any repairs carried out under the leasehold scheme would be service charge expenditure to which all tenants of the long leases of the scheme would be required to contribute towards as part of their service charge liability yet, Section 19 of the said 1985 Act protects them from having to do so if it was not necessary nor reasonable of their landlord (i.e. the freeholder) to have incurred the cost.
Local Authority Intervention/Enforcement
Should your tenant make a complaint to the local authority about poor living conditions or safety concerns, or their landlord's failure to carry out repairs they have reported, then the local authority may well take up the tenant's complaint with the landlord.
For example, the local authority may consider the problem to be a statutory nuisance (such as water ingress,damp, mould, disrepair) under the Environmental Protection Act 1990 and serve an Abatement Notice. Such a notice would be served on you as the landlord being the "owner in receipt of the rack rent" (and/or their agent/representative) as per Camden LBC v Gunby [2000] 1 WLR 465.
Alternatively, the local authority could carry out a Housing and Health Safety Rating System (HHSRS) Risk Assessment under the Housing Act 2004 and then order you, as the landlord, to carry out the required safety actions arising.
Further Information
For further independent information, please refer to the following guidance:-
Private Rented Sector Code of Practice (“the PRS Code”)
The Private Rented Sector Code of Practice (“the PRS Code”) is a recognised code which the Government has introduced with the assistance of various regulatory and trade association bodies to set and improve the standards by which properties which have been placed into the Private Rented Sector to let, or sub-let, should be managed.
Those various regulatory and trade association bodies which help to produce the PRS Code and who endorse the code and who require their members to subscribe to and follow the code include the: Property Redress Scheme (PRS), The Property Ombudsman (TPO), Royal Institute of Chartered Surveyors (RICS), Institute of Residential Property Managers (IRPM), Association of Residential Managing Agents (ARMA), Association of Residential Letting Agents (ARLA), National Association of Estate Agents (NAEA), British Property Federation (BPF), Residential Landlords Association (RLA), Tenancy Deposit Scheme (TDS) and others.
The PRS Code is also endorsed by local authorities and should be upheld and enforced by those authorities.
The PRS Code will be referred to by the court when having to assess the standard of a landlord’s management in order to determine a matter of a breach of landlord obligation.
Therefore, the PRS Code is a code which we too endorse and require to be followed by those who are sub-letting flats in a building under our management thus, underpin the requirements of our additional management regulation to require adequate control over any sub-letting arrangement.
Accordingly, if there is any Immediate Landlord who is sub-letting a flat in a building under our management who is ignorant or dismissive of, or in contravention of, the PRS Code then we reserve rights to put in place: additional management regulations for that landlord to obtain prior written consent before arranging or renewing a sub-letting, or to formally require that landlord to confirm that they acknowledge and shall observe and perform the PRS Code, and/or to place any such contravention of the code with the Local Authority for enforcement, and/or to seek instructions from our clients with a view to taking any possible enforcement action under the terms of the respective long lease.
Having regard to the requirements and recommendations of the PRS Code, the following are general requirements of our additional management regulation which are particularly relevant to a landlord's Implied Repairing Covenants, however, the reasonable conditions to be imposed shall have regard to the situation in each case, for example, our expectations of a property investment company or a person in the business of property investment will be much higher than that of an individual having to sub-let their one and only property:-
A Landlord's Statutory Repairing Obligations
Notwithstanding the landlord repairing obligations which may have been expressly stated in any short tenancy (i.e. a tenancy for 7 years or less, such as an Assured Shorthold Tenancy (AST) contract), nevertheless, Section 11 of the Landlord and Tenant Act 1985 implies into such tenancy contracts a minimum standard of landlord repairing obligations and, as of 20 March 2019, the enactment of the Homes (Fitness for Human Habitation) Act 2018 extends those statutory landlord obligations.
Section 11 of the said 1985 Act implies that the landlord (a.k.a. "the lessor" of the short lease) must not just keep in repair the premises they are letting together with its various installations but MUST also:-
"keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes)"
"any part of the building in which the lessor has an estate or interest".
where "interest" is a reference to include any common parts associated with the letting of part of a building, such as the sub-letting of a leasehold flat - see Para 23 of the Supreme Court in Edwards v Kumarasamy [2016] UKSC 40 where Lord Neuberger confirms that:-
"as a matter of property law, a right of way over land constitutes an interest in that land, although it does not constitute an estate in that land - see subsections (1), (2)(a) and (3) of section 1 of the Law of Property Act 1925."
and at Para 25 of that judgement, Lord Neuberger goes on to clarify that:-
"The only possible way of excluding the common parts of the Building in the present case from the ambit of Mr Kumarasamy's [the leaseholder/Lessor] statutory liability to Mr Edwards [his tenant of an AST], would be to limit the word "interest" to an interest in possession. However, quite apart from the fact that this would involve reading words into a statute when it does not appear to be necessary, such an interpretation would scarcely be consistent with the liability of a landlord under subsections 11(1)(a) and 11(1A)(a), which impose repairing obligations for items demised to the tenant, which, ex hypothesi, are not in the possession of the landlord."
Section 12 of the said 1985 Act is the "statutory bar" to prevent a landlord of a short lease from reneging on their said statutory obligations by providing that:-
"A covenant or agreement, whether contained in a lease to which section 11 applies or in an agreement collateral to such a lease [such as the long lease for the premises from which the short lease has been derived], is void in so far as it purports (a) to exclude or limit the obligations of the lessor or the immunities of the lessee under that section, or (b) to authorise any forfeiture or impose on the lessee any penalty, disability or obligation in the event of his enforcing or relying upon those obligations or immunities, unless the inclusion of the provision was authorised by the county court."
but subject to the caveat provided at Section 11(1B) that:-
"Nothing ... shall be construed as requiring the lessor to carry out any works or repairs unless the disrepair (or failure to maintain in working order) is such as to affect the lessee’s enjoyment of the dwelling-house or of any common parts".
Contrasting this statutory landlord repairing obligation with the repairing obligations usually found in a freeholder's "leasehold scheme", such repairing obligations are contractual; the intention of such having been agreed at the time (perhaps decades ago now) between the original freeholder (usually the developer) and the original tenants (a.k.a. the original leaseholders) whereby each tenant would be expected to live in their respective leasehold premises and meet their respective service charge liabilities (usually being their agreed contribution to the freeholder's actual costs incurred) and, in return, the freeholder would repair the main structure and exterior of the building and its common parts for the benefit of the original tenants (or any successors in title).
However, underpinning that contractual service charge agreement is a number of statutory protections to be borne in mind; the main one being Section 19 of the said 1985 Act which requires service charge expenditure to be necessary and reasonable.
If, therefore, one or more of those tenants (leaseholders) choose not to live in the premises they are leasing from the freeholder as originally expected but choose instead to become the immediate landlord of the premises by sub-letting the premises and putting into place their own "Section 11 Repairing Obligation" then it can no longer be said that it must be necessary and reasonable for the freeholder (at the cost liability of its tenants) to have to incur repair costs for which another landlord of the building has subsequently agreed of their own volition to be liable for in return for rack rent.
Your landlord of the flat should be the leaseholder of the flat (i.e. a tenant of the freeholder of the building).
If this is not the case, please contact us so that we can look into the sub-letting arrangements
for the flat you are renting.
This information is subject to our website disclaimer set out at the foot of this webpage.
The Government continues to crackdown on poor practices of landlords and their agents who operate in the Private Rented Sector (PRS).
It was reported that, in 2017, Citizens Advice had to help 65,000 private renters with more than 100,000 problems about their tenancy. However, the number of unreported tenants in the PRS who were suffering from poor practices in the PRS would have been much much higher.
The Government is therefore committed to ensure everyone has a decent, safe place to live, and with landlords fully complying with their obligations and has therefore published a number of ‘how to’ guides, which include checklists for new and existing tenants, landlords and letting agents to help ensure they are aware of, and can comply with, their legal responsibilities.
Is your landlord a good landlord carrying out their obligations for your safety and amenity and in return for the rent you pay them?
If you have to report any maintenance requirement or any safety or security concern, you should report such to your landlord and in accordance with their policy and procedures which they should have provided you with.
Your landlord owes you a duty to put and keep safe and in repair:-
so far as any disrepair may affect your use or enjoyment of the premises or the associated common parts.
Your landlord also owes a duty of care to any visitor of the premises.
Your landlord is also deemed to be a 'Responsible Person' at the building with regards to fire safety matters relating to the premises you are renting from them and the associated common parts you use with the premises and must therefore comply with fire safety requirements.
For all of the reasons mentioned above, your landlord should have an established policy and procedures for:-
For further information, please refer to the following independent guidance:-
Important: A failure to obtain consent before carrying out an installation, alteration or improvement may well place you in breach of your lease but may also increase the buildings insurance premium to be paid or could even vitiate or void the buildings insurance policy in full or in part . Please also see our information published on this website under the Tab entitled "Buildings Insurance".
Please note: To avoid falling into a conflict of interest with our client, we are unable to consider any application for landlord's consent whilst there is any subsisting breach of lease (i.e. arrears) or breach of any management regulation or if there is any unresolved claim being made against our client or this agency.
Introduction
Remembering that a tenant of leasehold premises is not the freehold owner of those premises but an owner of the long lease for the premises (their lease granting them exclusive use of the premises for a period of time subject to the terms and conditions of their lease), you will appreciate why the freehold owner should be notified before their tenant carries out any installations, alterations or improvements to its premises and why a freehold owner may well require their tenant to make an application for prior written consent before doing so.
A guidance note, endorsed by many of the industry regulators and trade associations (including RICS, LEASE, ARMA and IRPM), providing further information as to why a freehold owner's prior written consent is often needed before carrying out any installations, alterations or improvements to leasehold premises can be found HERE.
Sections on this webpage:-
Requirement to Apply for Consent
As an additional management regulation, any tenant of a block under our management MUST apply for consent before carrying out any installation, alteration or improvement (see further below for an example list of such works) at our client's block and such an application clearly detailing what the proposed works are.
A copy of the additional management regulation can be obtained by clicking HERE.
Upon receipt of such an application we can then properly consider the nature and extent of the proposed works and the lease requirements and advise further as to whether the works may proceed without the need for a formal written consent or whether formal written consent must first be obtained.
Example list of works considered to be installation, alteration or improvement works
Each application must be considered on its own merits of course but, as a general rule of thumb, any minor works which amount to simply decorating or repairing what is already in situ without the need of a specialist tradesman should not require formal written consent.
The following list is not exhaustive but examples works to be subject to a conditional licence of consent:-
Requirement for Your Project to be Properly Designed, Managed and Carried Out
Before being able to apply for freeholder’s consent, planning permission, listed building consent and/or conservation area consent may be needed from the Local Authority and building regulations approval may also be required.
Any works to any horizontal or vertical ‘Party Structure’ of the Block must first be subject to The Party Wall, etc. Act 1996 requirements with the owners of any adjoining premises (which would include the tenant of any adjoining premises in the block) to obtain their written consent and to establish the requirements to protect their interests.
All works permitted by way of freeholder’s consent must be carried out in accordance with all Building Control Regulations and, in the case of any works to the structure or exterior of the block or its common parts, in accordance with all applicable Health and Safety Regulations.
Whilst consent to reasonable proposed works should not be withheld, the application for consent will need to be accompanied by enough documentation to evidence reasonableness.
The documentation provided should be able to evidence without question that the works have been properly considered and specified by a Designer and shall be properly managed by a Contract Administrator (CA) and shall be carried out safely by only a fully insured, competent and considerate Contractor who is (or their sub-contractors are) registered with the applicable recognised competent person schemes.
Recognised competent person schemes include: Association of Plumbing and Heating Contractors (Certification) Limited (APHC), Capita Gas Registration and Ancillary Services Limited (GSR), Certass Limited (CERTASS), Certsure LLP trading as ELECSAor NICEIC, Fensa Limited (FENSA), HETAS Limited (HETAS), NAPIT Registration Limited (NAPIT), National Federation of Roofing Contractors Limited (CompetentRoofer), Assure Certification Limited (ASSURE), Stroma Certification Limited (Stroma).
Whilst the roles of Designer, Contract Administrator and Contractor could conceivably be performed by the same person, the roles should to be kept separate for anything other than the smallest / straightforward projects in order to avoid conflicts of interest. If things were to go wrong, having assigned separate professionals to the separate roles there will be no “blurring” of the roles and of responsibility thus, no argument as to liability nor vitiation of the respective professional indemnity insurance.
Summary of the Type of Documentation / Information to Accompany an Application for Consent
Please ensure that the information and documentation accompanying your application for consent includes or fully details:-
Example List of the Documentation / Information to Accompany an Application for Consent
Whilst the roles of Designer, Contract Administrator and Contractor will always exist, whether those roles should be carried out by the same person or a different person will depend on the size and/or complexity of your project and/or the risks involved.
Likewise, the required documentation to be produced for your project will also vary depending on the size and/or complexity of your project and/or the risks involved.
By the time you reach the stage of applying for freeholder's consent for your properly arranged project, you should have in your possession sufficient documentation and other information to accompany and support your application, so it should be little more than taking copying of those documents and other information.
The following list examples the documents / information to accompany and support an application for consent:-
Requirements of the Proposed Building Works Contract
Your proposed building works contract is the documentation your Principal Designer would have produced and tendered to obtain your estimate(s) and being the contract you are proposing to instruct your Contract Administrator to award to your nominated Principal Contractor.
There are various template contracts available from which to create a building works contract, such as those produced by the Joint Contracts Tribunal (JCT); some must be paid for whilst some are free to download.
The JCT Home Repair and Maintenance Contract is a template contract for minor repairs and maintenance carried out to domestic premises by a contractor (such as electrical rewiring, plumbing or painting and decorating). It covers the sort of things which may not take a great deal of time – perhaps a day or less in some cases and maybe up to 2 or 3 weeks for others. The contract is designed for work which isn’t structural and isn’t likely to involve more than one trade.
The Federation of Master Builders (FMB) Plain English Building Contract for Domestic Work is another template contract for minor repairs and maintenance carried out to domestic premises by a contractor.
A building works contract should include arrangements for:-
Administration Fee
Because dealing with applications for consent is not a block management matter but a provision of a service to a specific tenant, our time-attendance and any disbursements incurred in in such matters cannot be carried out for a management fee charged to our client (which in turn would be recharged to the block's service charge) so must instead be charged as an administration fee directly to the tenant requiring the service.
Administration fees for dealing with consents are authorised by Section 19 of the Landlord and Tenant Act 1927 and Section 158 of the Commonhold and Leasehold Reform Act 2002 and Section 1(1)(a) of Schedule 11 thereto subject to prescribed tenant rights.
Given the nature of the work, such a fee cannot usually be estimated until the application for consent has been received and can be considered, but there is a minimum fixed fee to be paid upon making an application for consent and with the possibility of additional fees (including any disbursements) payable should we need to revert back to you to obtain any missing information/documentation or should the matter become protracted.
Therefore, to avoid additional administration fees, please follow the guidance given above to ensure that your application for consent is accompanied by the fullest of documentation and information to detail your proposed works and to evidence that your works shall be properly managed and carried out.
On occasion, the Landlord/Agent may also need to seek advice and/or assistance of others, such as Surveyors or Solicitors, but only with the Applicant undertaking to be responsible for those additional professional costs.Please find below our two guides on fire safety within flats.
For the reasons explained on this page concerning the disclosure requirement of the Insurance Act 2015, if you have not done so already or when your use of your leasehold premises change, please complete and return the "Use of Flats" Insurance Survey Form.
For further information about the requirement to disclose all material facts to a buildings insurer, please see HERE for further information provided by Pi-Property Insurance.
Making a Worthwhile and Justifiable Insurance Claim
If a tenant considers that their leasehold premises has suffered damage as a consequence of an accident caused by an insured risk
The insurer reserves its rights to appoint a Loss Adjuster to investigate the merits of any claim and to protect or reduce the insurer's liability as discovered necessary. Should it be discovered that an incident occurred due to negligence as opposed to an accident then that will be considered and may invalidate the claim.
It must be remembered that making a claim against an insurance policy is, ultimately, a claim to recover costs.
Anyone must be prepared to expend their own money to have any urgent works carried out to make safe and/or to prevent any further damage and then hope to seek recovery of most of their costs at a later date. It would be very optimistic to expect to recover all costs.
Indeed, in the event of any successful claim, it may well be subject in any case to a policy excess, such as £500 for 'escape of water' and £1,000 for 'subsidence'.
For non-urgent repairs, at least two comparable estimates should be obtained to accompany any claim for the consideration of the insurer.
Once a successful claim has been paid out, claims history can have a detrimental effect for future insurance arrangements. Commonly, insurance premiums will increase until the insurer has recouped their losses. In other cases, an insurer may refuse to re-insure.
Therefore, the decision as to whether a claim is justifiable and worthwhile and as to the amount to be claimed should be carefully weighed up against the time and effort of having to prepare, submit and progress a claim and having to obtain comparable estimates and the detrimental effect any claim will have on future insurance arrangements.
IF you are certain that you have a worthwhile and justifiable claim that will be approved by a Loss Adjuster if one is assigned to consider your claim then please notify Pi-Property Insurance (part of Morrison Edwards Insurance Services Ltd.) within 14 days of the incident using their following contact details and then complete and submit to them a Claim Notification Form accompanied by all relevant information, photos, estimates, reports, witness statements, etc. to help substantiate your claim:-
Address: Pi-Property Insurance
1 Arrow Court
Adams Way
Alcester
Warwickshire
B49 6PU
Claims Tel: 01789 761 680
Claims Email: piquote2@morrisoninsurance.co.uk
Claims Website: www.pi-propertyinsurance.co.uk/Property-Insurance-Claims
Insurance Act 2015 and Requirement to Disclose Risks?
Buildings insurance is based upon the information provided to the insurance company.
As a result of the Insurance Act 2015 (the ”Act”), significant changes have been made to the law in relation to commercial insurance and has a significant impact on the operation of buildings insurance policies, including disclosure obligations towards insurers.
The Act also impacts upon the remedies insurers may adopt in the event of obligations not being complied with. This means that anything that might influence the judgement of an insurer in fixing the premium, setting the terms or determining whether they would take the risk must be disclosed.
If uncertain whether anything is material to be disclosed and in order to identify what must be disclosed, there is an obligation to carry out a reasonable search before presenting all "material circumstances" and the risk to be insured, including:-
For further information about the requirement to disclose all material facts to a buildings insurer, please see HERE for further information provided by Pi-Property Insurance.
Accordingly, if you have not done so already or when your use of your leasehold premises change, please complete and return the "Use of Flats" Insurance Survey Form.
The Buildings Sum Insured
Obviously, the cost of building a block of flats and its multi-residency risks is greater than a self-contained building.
This is why it is so important that the Buildings Sum Insured is correctly and prudently calculated, then recalculated every 3-5 years and index-linked in the meantime.
Calculation
The Buildings Sum Insured must include adequate provision to include: the cost of fully demolishing and clearing site and rebuilding from scratch and must also include adequate provision for all of the professional fees (architect, surveyor, structural engineer, contract administrator, project manager, etc.) and local authority fees for all required consents, plus VAT where applicable.
The Buildings Sum Insured is not the same as the market value of the flats added together, which might be higher or lower.
A chartered surveyor must be used to calculate the prudent Buildings Sum Insured to ensure the sum is adequate so that the insurance cover obtained is wide enough to protect the interests and investments of the freeholder, the tenants and all mortgagees.
As to how exactly a surveyor calculates the Buildings Sum Insured ... you will need to speak with a chartered surveyor !
Review / Recalculation
The Buildings Sum Insured must usually be reviewed by a chartered surveyor every 3 to 5 years.
In the meantime, the Buildings Sum Inured will need to be adjusted upon each annual renewal by way of being index-linked to an appropriate rate to reflect the changing cost of rebuilding (i.e. change of cost in materials, labour and logistics).
The Risks to be Insured
Policies are not all the same. The insurer/broker offering the cheapest deal may not necessarily provide the appropriate level of cover required.
A buildings insurance policy is not a policy to cover cost of maintenance or repair, but the cost of repairing consequential damage arising from an insured risk.
The respective policy for the specific building will need to be considered in all cases but the 'blocks of flats' risks to be insured would usually include the following risks:-
As an additional policy cover, Terrorism Cover should also be purchased because damage caused by, for example, a fire or explosion associated with an act of terrorism will not be covered under a buildings' insurance policy.
Home Contents Insurance
Your personal contents (appliances, clothing, personal effects, etc.) will not be covered in case of loss or damage.
Carpets will not usually be covered either.
You must ensure that you obtain and maintain adequate home contents insurance for your personal contents, including carpet.
Landlord's Insurance (if you are Sub-letting)
We have a separate area on our website that informs of the types of risks and potential liabilities as a landlord should you decide to sub-let leasehold premises and any landlord is therefore best advised to obtain adequate landlords insurance cover.
Almost all flats in England and Wales are leasehold.
Understanding what it means to lease a residential property can be unclear.
The following series of guides have been published on the ARMA website and which you will find helpful when considering taking assignment of a long lease for residential premises:-
There are many other useful guides published on ARMA's Leasehold Library.
We are not, and nor do we hold ourselves out to be, surveyors, valuation advisors, financial advisors, or legal advisors although we will refer to relevant laws, case law, regulations, rules and codes of practice as a point of reference for your further consideration.
No responsibility can be accepted by Helm Estate Services Ltd. or its authors or website developers for any loss occasioned to any person acting (or refraining from acting) as a result of any information included or omitted from this website.
Director: Darren J. Winter MIRPM MIoD
Registered in England and Wales (Company No. 8959726)
Registered Office: A2, Yeoman Gate, Yeoman Way, Worthing, BN13 3QZ (an address provided by Kreston Reeves (Chartered Accountants) )
Postal Address for correspondence: 60 Windsor Avenue, London, SW19 2RR (an address provided by ukPostBox)
Registered with the Information Commissioners Office (ICO) as a Data Controller under the Data Protection Act. (Registration No.ZA067062)
Member of the Property Redress Scheme (PRS) (Member No. PRS012962). A hard-copy of our Complaints Handling Procedure shall be provided upon written request
© 2014-2019 Helm Estate Services Ltd. All rights reserved.
