We receive many calls from leaseholders, freeholders and Directors of Residents Management Companies who struggle with many aspects of the management of their blocks of apartments or estates. Here is a case study on how we have helped on those occasions:
Development in Hanley
For confidentiality, we have not disclosed the name of the development here, but we were approached by Directors of a residents management company about managing their estate of 12 flats. The estate had been in the family for decades and had been handed down to the Directors to manage. The Directors were busy people with their own jobs and had had no training in block management.
The first step was to review the leases. Our block manager reviewed all 12 leases to ensure they were similar and to see the apportionment percentages for each flat. The lease also spelt out the extent of the development as well as what parts of the estate were retained for the landlord to maintain and what parts of the estate were part of the leaseholders’ dwellings. In this development, the lease stated that the gardens and windows were privately owned by each flat owner, so it was easy for us to work out that there would be less communal maintenance involved.
We visited the estate with the Directors, to do a walk about to identify the properties, the boundaries, the communal areas and to observe the general condition of the communal carpark, hedges, roofs, guttering and rendering. We also discussed various health and safety requirements in order to comply with current laws and regulations.
After collecting all the information from the Directors, we were able to return to our office and formulate a proposal for the services we thought were necessary and to quote our fees.
In this instance, we identified two urgent matters to be done immediately; a missing Health and Safety and Fire Risk Assessment and a Building Reinstatement Valuation to ensure the correct sums were insured under the buildings insurance. As the estate had never had Service Charge Budgets before, we drafted a Service Charge Budget for all the required items, and implemented a system for invoicing to go out in accordance with the dates in the leases. We also advised the need for a reserve or sinking fund, in order to start accumulating funds in a client account to attend to any future unforeseen repairs.
We advised the Directors to hold a residents meeting for us to meet the residents to explain the need for block managers. Unfortunately, after decades of not paying any Service Charge Budgets, most of the residents did not bother to turn up for their meeting. We looked at the Residents Management Company Articles of Association and gave some advice regarding the running of their company. We reviewed the lease and recommended the variation of a key clause too, to improve the future prospects of the leaseholders selling their flats.
We spent a lot of time onboarding the block and the leaseholders onto our systems. We created a leaseholder portal and a mini-website for the development so that all leaseholders could access the relevant documentation, account information and news about their development from the comfort of their computers. A dedicated client account was also opened to receive the client monies for this particular development.
Handling the onboarding of this block has not been easy for our staff at Belvoir. We have had to deal with irate leaseholders now faced with having to pay Service Charges that are plainly spelt out in their leases. However, we have a lot of experience in property management and stakeholder management, and so we continue to put out all information and communications with all stakeholders with full transparency and honesty. All our decisions are made in the best interest of the leaseholders for their safety and to protect their asset.
Our service will now bring this block up to speed with current health and safety and fire safety regulations, as well as protect their property from losses due to underinsurance. The Service Charge Budgets and reserve fund will ensure there are funds in the account for when the roofs and guttering will need changing. This avoids the situation of the leaseholders having to pay large sums out of their own pockets should these big repair items appear unexpectedly. Our service also protects the Directors against any negligence or prosecution by the Health and Safety Executive.
If anything in this case study rings a bell with you or your development, please contact Ramona Hirschi or Josie Humphreys for a confidential discussion. Tel: 01782 478444 / Email stoke-on-trent@belvoir.co.uk
