- IRPM News
IRPM CEO, Andrew Bulmer | Annual Seminar | Apprenticeship in Property Management - Media Reports
Leasehold still popular despite residents' concerns | Hackitt review to report in May | ARMA announces new insurance partner | New formula set to boost housing targets | ARMA ACE Awards entries invited - HR News
The gig economy and self-employed contractors - Social Housing News
Fire safety and housing in 2018 - the big issues | Places for People to launch £550m build-to-rent fund | Women in Housing Awards - Fire Safety News
Latest statistics on buildings with ACM cladding | Offshore freeholders urged to get together over cladding | FRA Apprenticeships announced | Manchester has too few compliant blocks says GFRS | Government steps up pressure to identify private high rises - Health & Safety
MHCLG wants your views on electrical safety in the PRS - News from Wales
Welsh Government tackles leasehold abuses | New report into PRS | Home Energy Efficiency Schemes Regulations amended - News from Scotland
PRS scheme approved | Changes announced to Housing Act in Scotland - Legislation
Government responds to consultation on regulation of managing agents in England | Government response to client money protection for lettings agents | Are you ready for the GDPR? | Government issues new powers to regulate HMOs | New regulations under Housing and Planning Act 2016 come into force | New guidance on landlords' ability to claim costs - Legal
Coates v Marathon Estates Ltd | Certification of service charge accounts and liability to pay service charge | Citiscape - tribunal determines who pays for cladding - Topic of the month - staff retention
- Events
April Fool? No, the MHCLG announcement was for real…
My first thought was, is this an April Fool jape? I read it through. It isn't. The biggest shake up in the property management sector is coming. It is good news, but it will affect all of us.
On 1st April, Housing Minister Heather Wheeler announced a host of measures to protect consumers, including the regulation of agents to a single code of practice and, critically, mandatory qualifications and CPD for agents/managers. That means they want to regulate both firms AND individuals and depending on your role, you will need a qualification to practice. If you're a qualified professional working for a regulated firm, this should be music to your ears. And it ought to be the biggest win ever for consumers in our sector. We have long asked Government to get rid of the rogues that drag down our reputation. However, there is a 'but…". And it is a big "but…".
Government must get this right and the details will be tricky. Who will get qualified and to what level? One per firm? How does that raise standards in a large firm with dozens, even hundreds of managers? Perhaps everyone who touches a consumer? Does a concierge need to be qualified? If so, to what? What about the small leaseholds, those Edwardian villas split into 3 flats? How does this work for our "build-to-rent" operators with their large unbroken blocks and on-site staff?
We are talking with Government right now. MHCLG (Ministry for Housing, Communities and Local Government) are setting up an industry working group to figure this out and we will be there. IRPM, your professional body, will help Government to deliver the right result, so that a healthy sector of qualified professionals can deliver better outcomes for our customers.
Government will be looking hard at CPD compliance. We still have members who have not completed their 2017 CPD record and a few naughty folk haven't done 2016 either. CPD is there for a reason; it is your way of staying up to date and safe. If you haven't done your 2017 logging yet, please get it logged in now.
For 2018 CPD, don’t forget to book for the Annual Seminar on the 23rd May; tickets are on sale right now through the IRPM web site and are selling fast. Regional Seminars around the country will be announced in due course.
The next few months are going to be lively and have the potential to catapult our sector into genuine professionalism, with the status and rewards that follow. Getting rid of the rogues is the Government's intention - that has to be good for both consumers and professionals.
Andrew V Bulmer BSc FIRPM FRICS
CEO
Annual Seminar – tickets now on sale
Tickets are now available for this year’s IRPM Annual Seminar, titled Change is coming – ready or not? The event will be held at the Park Plaza Hotel, adjacent to Victoria Station in London on 23 May. Last year’s seminar was a sell-out and the IRPM expects 2018 tickets to sell fast. Places are limited and cost just £75 for members. Non-members are welcome too, priced at £225. The full programme will be announced on the website during the next few weeks. In the meantime, add the date to your diary and join us on social media for key updates and news, using #IRPMSem18 on Twitter.
Apprenticeship in Property Management
The IRPM has had a phenomenal response from members asking about funding to train existing or new staff. If you don’t pay the Apprenticeship Levy did you know that you could be eligible for 90% or 100% rebate/grant? Or maybe you are paying the Apprenticeship Levy but do not understand fully how to use these available funds to train existing or new staff.
Whatever the case, the hugely successful IRPM Apprenticeship in Property Management can work for your business and is the only Property Management Apprenticeship leading to an IRPM professional qualification.
At present the IRPM is offering a Level 3 which is perfect for new staff and has an employer satisfaction rating of 82% and we are about to launch a Level 4 which is ideal for training existing staff.
Contact the team at IPRM to understand how this great member benefit can work for you.
Leasehold still popular despite residents' concerns
In light of the Government’s aim to crackdown on ‘unfair and abusive practices within the leasehold system’, online housing agent Sellhousefast.uk has taken a closer look at sales of leasehold properties in England and Wales. Sales data from the Land Registry on properties sold in 2017 was analysed, along with data for previous years and the online agent found that, despite the well-publicised issues facing owners of leasehold properties, they are still popular with buyers in both England and Wales.
Key findings were that:
- Leaseholds accounted for 31.9% of all properties sold in 2017- 5% more than in 2016
- New-builds accounted for just 15.9% of all leaseholds sold
- Freehold flats are virtually non-existent as they make up only 2.13% of all flats sold in 2017
Sellhousefast.uk also looked at the share of leaseholds sold in the 20 largest English cities in 2017 and found major differences. The leasehold system was found to be most widespread in London and Manchester where, respectively, leaseholds accounted for 67.13% and 52.58% of all properties sold. Sheffield had the third largest share of leasehold properties at 46.75%, followed by Liverpool with 37.23% and Newcastle upon Tyne with 34.07%.
With leaseholds accounting for 35.12% of all properties sold in Wales in 2017, Neath was found to have the highest proportion of leasehold properties sold in the country. The Welsh capital of Cardiff had the second highest proportion of leasehold properties (24.32%), followed by Swansea (19.19%), Newport (14.19) and Barry (12.80%).
Hackitt review to report in May
The final report of the Hackitt review into building regulations and fire safety is due out in May, (source: Building). The independent review by Dame Judith Hackitt, a former chair of the Health and Safety Commission, follows last June’s fire at Grenfell tower in west London which killed 72 people.
An interim report came out a week before Christmas but Building understands the final report will now be out in the second week of May. A source said: “It’s running very efficiently, there won’t be any slippage.” Hackitt’s interim report said she was “shocked” by some of the practices she had seen, calling for better enforcement to “hold to account those who try to cut corners.” She said a “cultural change” was needed instead of “doing things cheaply”.
Last month, Building reported that worries were growing over how much Hackitt’s report will add to the cost of residential towers. Some are predicting that regulation changes on cladding systems, sprinklers and means of escape could add up to 20% to a building’s cost.
ARMA announces new insurance partner
ARMA now has a new insurance partnership with NFU Mutual, offering what the organisation describes as “a host of benefits” to ARMA members choosing to insure with the company. NFU Mutual was selected for its financial strength, mutuality, renowned claims service and expertise in insuring property and is expected to provide a first rate, ‘no-quibble’ claims handling service for the benefit of property managers and leaseholders alike as well as access to expert advice from local dedicated agents based around the UK. More information at www.arma.org.uk
New formula set to boost housing targets
Building Online reported in March that the government is to press ahead with controversial plans that will dramatically increase housing targets across large swathes of the south of England.
A standardised methodology for calculating housing need at the individual council level is to be introduced via alterations to the National Planning Policy Framework (NPPF) and will replace the existing system under which planning authorities can decide how to measure their local housing needs. A draft version of the new methodology, known as “objectively assessed need” was unveiled in a consultation paper issued last autumn entitled Planning for the Right Homes in the Right Places. This contained a table showing that some local authorities were likely to see a doubling of the official assessment of the number of new homes needed in their areas, mainly in the major cities and south-eastern shire counties.
Announcing the revisions to the NPPF, Housing Secretary Sajid Javid told the House of Commons that the new formula for calculating housing need will be “a big improvement on the current situation in which different councils calculate housing need in different ways, wasting time and taxpayers’ money”.
ARMA ACE Awards entries invited
Following the success of last year’s ARMA ACE Awards, the 2018 awards have been expanded with seven new categories, including four for managing agents and two for external suppliers. There will also be a special Honorary Industry Award to recognise individuals that have made a significant contribution to the sector over their careers. The Awards are open to ARMA members, partners, associates, affiliates and external suppliers to ARMA members.
The deadline for entries is 27 April 2018. For full details and to enter, click here.
The gig economy and self-employed contractors
During 2016 and into 2017, several Employment Tribunal rulings found that the way a company sees employment status between an individual and organisation could be wrong. In the case concerning Uber drivers, Uber is challenging the outcome again, and the case will be heard at the Court of Appeal sometime this year.
The latest ruling to be challenged is the case of Pimlico Plumbers, who appealed to the Court of Appeal in February 2017, when one of the plumbers, Gary Smith, was deemed a worker rather than self-employed by the Tribunal.
Mr Smith originally took the case to the Tribunal in 2012, claiming that he was unfairly or wrongfully dismissed by Pimlico Plumbers in May 2011 following a heart attack. He had worked exclusively for Pimlico Plumbers between August 2005 and April 2011 on a self-employed basis and was VAT registered and paying tax on the self-employed basis. Following his heart attack, he asked to reduce his days from five to three; this was refused by Pimlico, who took away his van. Mr Smith claimed to have been dismissed and the Tribunal found in his favour, meaning he was entitled to worker rights and benefits, including access to sickness and holiday pay, and reasonable adjustments. Pimlico appealed, first to the Employment Appeals Tribunal, and then to the Court of Appeal – the appeal was refused by both. In February 2017, the Court of Appeal found that Mr Smith was a worker because he was required to use the Pimlico branded van for work and cover a minimum number of hours a week.
The company then appealed to the Supreme Court, the highest court, and the case opened on 20 February 2018. The case has been heard and the Justices will be reserving judgment until a later date.
Fire safety and housing in 2018: the big issues
In light of the interim recommendations from the Hackitt Review, Debbie Larner, head of practice at the Chartered Institute of Housing (CIH) has set out some key pointers to professionals in the social housing sector for the year ahead.
- Don’t wait – act now. The first message from the report comes across very strongly – do not wait – put in place any relevant and remedial measures to ensure buildings are safe and which offer reassurance to your tenants.
- A change of mindset is required across the board. While it is clear that there are serious systemic faults in processes and procedures – the review recognises that a fundamental cultural and behavioural change is required among all agencies and professions involved in the design, planning, build and management of homes.
- Levels of professional competence must be raised. A lot of emphasis has been placed on the competence (or lack of) of fire risk assessors. The report also calls into question the competence of those involved in the design, construction and ongoing operational management and maintenance of complex and high-risk buildings.
Says Debbie: “As housing professionals we all have a key role in ensuring that whoever we commission, contract with and employ has the professional skills and competencies to do their role. We need to understand what this looks like and ensure our own staff have the appropriate qualifications, experience and competencies – accredited where relevant – to do their roles”.
Finally, residents must have a voice. Debbie advises that property professionals “take a bit of time to look at how you listen to and address residents’ concerns (and not just on fire safety) – do you have good systems in place? Are you accessible, transparent and accountable in your dealings with your residents?”
Places for People to launch £550m build-to-rent fund
PfP Capital, set up a year ago by 60,000-home housing association Places for People, will aim to forward-fund developments around the country to deliver 3,000 homes. It will be seeded with three residential schemes worth around £150m, which will be funded through a special purpose vehicle.
The announcement comes as the government announced new support for the build-to-rent sector at the launch of the new National Planning Policy Framework, stipulating that councils should plan for build-to-rent.
Now in their sixth year, the Women in Housing Awards highlight the achievements of the many women who make a major contribution in housing. The categories recognise both individuals and teams and this year a new Woman of the Year category has been introduced to recognise a truly inspirational ambassador for women in housing.
For more information or to make a submission click here.
Latest statistics on buildings with ACM cladding
The latest government data release on ACM cladding has now been published. It reports that the total number of residential buildings over 18 metres and public buildings in England on 15 March 2018 where it has been confirmed that Aluminium Composite Material (ACM) cladding is installed or was previously installed was 319. This is an increase of five since the last data release which was based on data from 16 February 2018.
Of these 319 buildings, 306 have ACM cladding systems that the expert panel appointed by the English government advises are unlikely to meet current Building Regulations guidance and therefore present fire hazards on buildings over 18 metres (an increase of five buildings since 16 February 2018).
Of these 306 buildings unlikely to meet current Building Regulations guidance:
158 are social housing buildings (managed by either local authorities or housing associations);
134 are private sector residential buildings but these also include hotels and student accommodation; and
14 are public buildings, including hospitals and schools.
Offshore freeholders urged to get together over cladding
The Leasehold Knowledge Partnership reports that Sir Peter Bottomley has urged government to hold a public meeting and call in Vincent Tchenguiz, William Waldorf Astor and the offshore owners of residential freeholders to resolve the Grenfell cladding issue.
Sir Peter told Communities Secretary Sajid Javid: “This week saw the first proper tribunal decision, regarding Citiscape in Croydon (See Legal in this issue of the Technical Update for more on this) which is owned by the Tchenguiz interests.
“Ordinary taxpaying residents there are being asked to pay tens of thousands of pounds, and the same thing is happening at New Capital Quay in Greenwich, Heysmoor Heights in Liverpool, and in another 129 blocks that I could name.
“May I put it to my right honorable friend that he ought to get together the Tchenguiz interests, William Waldorf Astor’s Long Harbour and Abacus interests, the builders, the leaseholders and their representatives in order to have a roundtable in the open?
“Instead of waiting two years until an inquiry is done, it is time to get these people together and talk about a simple deal whereby, for example, the builders put up a third, the freeholders put up a third and the Government/tenants put up a third to get the cladding removed and replaced.”
The Institute of Fire Safety Managers (IFSM) has announced that it is to develop an apprenticeship standard for fire risk assessors. The key function of a fire risk assessor under the initiative will be to carry out fire risk assessments of simple/less complex premises which can be described as small buildings with a simple layout such as small shops, offices or industrial units with non-complex means of escape and life safety issues. That definition of simple or less complex buildings is defined more specifically in the actual standard.
The apprenticeship standard is set at Level 2 and lists the knowledge and skills required at this level. The IFSM has approved the final standard and is currently looking for educational delivery systems to see how best it can be introduced to interested young professionals.
Manchester has too few compliant blocks, says GMFRS
Information released by Greater Manchester Fire and Rescue Service (GMFRS) shows that just 117 of the 489 blocks inspected in and around the city were found to be compliant with fire safety guidance. Action plans were issued by GMFRS inspectors to the owners of 299 buildings to bring them up to safety standards. Another 66 notifications of deficiencies were issued, while the fire service filed enforcement notices on one block.
Social landlords owned 213 of the buildings inspected, with 151 managed by housing associations, 62 by councils or ALMOs, 242 by private companies and 34 by student accommodation developers.
Government steps up pressure to identify private high rises
On 6 March the MHCLG issued a letter stating that it will provide funds of up to £1m to assist local authorities in their work to identify all private sector high rise blocks that may have unsafe cladding. In addition, further advice will follow setting out the statutory role that local authorities can take in enforcing action to deal with any blocks that may be identified.
MHCLG wants your views on electrical safety in the PRS
A new government consultation published in February is seeking views on whether legislation should be introduced to require landlords to perform regular electrical safety checks in privately rented residential properties. It is also asking for comments on aspects such as the frequency of checks, persons authorised to perform such checks, record keeping duties and on how best to ensure compliance. The consultation paper Electrical Safety in the Private Rented Sector can be downloaded at www.gov.uk and responses must be submitted by 16 April 2018.
Welsh Government tackles leasehold abuses
The Welsh Government has agreed with major developers that they will no longer sell leasehold houses unless absolutely required legally.
In addition, for houses and flats which qualify for support under Help to Buy – Wales:
- new criteria will require a developer to present a genuine reason for a house to be marketed as leasehold
- leasehold contracts will have to meet minimum standards, including limiting the starting ground rent to a maximum of 0.1% of the property’s sale value
- leasehold agreements will have to run for a minimum of 125 years for flats and 250 years for houses.
The Welsh Government provides smaller home builders with affordable loans through the Wales Property Development Fund and the same Help to Buy – Wales leasehold criteria will now apply to properties built through this scheme.
Welsh housing minister Rebecca Evans has not ruled out further measures. She said:
“We have acted swiftly to take targeted and tangible action over concerns about leasehold sales on new build homes and, where leasehold is already the tenure, I am setting up a new group to recommend reforms to the system. I intend to put in place a voluntary code of practice to underpin these measures, improve standards and to promote best practice.
“This is only the start of my plans to address concerns around leasehold. I have not ruled out the possibility of legislation in the future, which may well be needed to make leasehold, or an alternative to it, fit for the modern housing market.”
The National Landlords Association has published a report focusing on ways to bring about positive change in the Welsh Private Rented Sector (PRS) entitled 'Improving the Private Rented Sector in Wales; making it happen for landlords and tenants'
Launching the report in the Welsh Assembly, NLA Chairman Adrian Jeakings, welcomed the support of partners Citizens Advice Cymru and the housing minister Rebecca Evans in making the publication possible.
Home Energy Efficiency Schemes Regulations amended
Section 15 of the Social Security Act 1990 provides that, in Wales, the Welsh ministers may make, or arrange for the making of, grants towards the cost of work to improve thermal insulation, or otherwise reduce or prevent the wastage of energy in dwellings. The Home Energy Efficiency Schemes (Wales) (Amendment) Regulations 2018, coming into force in April, amend the 2011 regulations in order to allow grant funding for the installation of low energy light bulbs.
Private rented housing developer Moda has secured planning permission to transform the old Strathclyde Police headquarters in Glasgow into a build-to-rent neighbourhood. Under plans approved by Glasgow City Council, Holland Park – named after the grand hotel-style lobby that will sit on Holland Street – will offer 433 high-tech homes designed exclusively for rent, as well as 45,000 sq ft of amenity space that all residents will have access to.
It will be developed in a joint venture with real estate investment management firm Apache Capital Partners, the £120m scheme will start on-site later this year, with the first homes available in 2022.
Changes announced to Housing Act in Scotland
All homes in Scotland will be required to have a minimum number of smoke alarms under changes being made in the wake of the Grenfell Tower blaze. Following a consultation on fire and smoke alarms, the existing high standard required in private rented housing will be extended to all homes.
The Housing (Scotland) Act 1987 will be amended to reflect the new requirements, which insist on:
- at least one smoke alarm installed in the room most frequently used for general daytime living purposes
- at least one smoke alarm in every circulation space on each storey, such as hallways and landings
- at least one heat alarm installed in every kitchen
- all alarms should be ceiling mounted, and
- all alarms should be interlinked.
The following changes to this standard, all supported by the responses to the consultation, are also proposed:
- to allow specified types of sealed long-life battery alarms as well as mains-wired alarms – reflecting the availability of appropriate technology and will encourage compliance
- to specify a maximum age of ten years for alarms and
- to require carbon monoxide detectors in all homes.
If occupants are private tenants, the landlord is required to meet their duty to repair and maintain its properties as set out in the repairing standard under the Housing (Scotland) Act 2006. Private tenants can apply to the First-Tier Tribunal for assistance if landlords fail to carry out work needed to meet the repairing standard. Private landlords are already required to ensure rented homes have fire and smoke alarms to the new standard.
If occupants are social tenants, the landlord is expected to meet their duty to ensure that property meets the Scottish Housing Quality Standard. The Scottish Housing Regulator monitors landlords’ performance against this standard. Social tenants have a right of complaint against their landlord to the Scottish Public Services Ombudsman. Social landlords are already required to ensure homes have fire and smoke alarms, but not to the new standard.
Government responds to consultation on regulation of managing agents in England
April fool’s day did not seem an appropriate day for government to issue its response to the consultation paper on regulation lettings and managing agents in England, but it was released at 12.15am on Easter Sunday. The government has already committed itself to regulating all lettings agents so here we concentrate on what the response says about managing agents.
One independent regulator
There should be a new independent regulator responsible for both lettings and managing agents. This may be a new body or an old one converted for the purpose. The regulator would own and police a new code of practice (see below) and would have the power to ban from practice any agents who transgress.
New single code of practice for lettings and managing agents
This code is to be prepared by a working group to be appointed by government with the hope of finishing in early 2019. The code will apply to lettings and managing agents BUT will have separate sections for each category as well as a section that applies to both. The code will be legally enforceable and mandatory but it is not clear how it will be enforced; one assumes by the regulator rather than the FTT on some points.
Professional bodies with their own codes will have to apply the new code in their own rules for members but could go beyond.
Mandatory qualifications for agents
The code will be enforced on companies and organisation including sole traders rather than their employees. Some – and it is not clear how many - employees will have to have a mandatory qualification to comply with the code. There may be different levels of qualification for grades of staff. CPD will also be prescribed for some staff.
Other ideas
The paper says the government will empower leaseholders to switch managing agents but does not say how this may be achieved. New legislation would be required. The paper also says the government will simplify the Right to Manage but again does not say how. It does say it will look at the 25% commercial premises rule that stops RTM because of the development of more mixed premises. Again, new legislation would be required.
The government press release says it will introduce a new system to challenge “fees”. This term fees seems to mean service charges and administration charges and the response paper is not really clear on what this new system may be.
Comments on the paper
The paper is not clear how it will deal with freehold landlords who manage themselves or through an in-house company. The paper does say it will ask the working group (to be set up to produce a code of practice) to look at this issue. The government is still considering what to do about ombudsman /redress schemes; at present only agents have to belong to such a scheme.
The paper makes no mention of the self-managed portion of the leasehold sector - RMCos and RTMCos that do not want or need an agent. There are no up-to-date figures on what proportion of the total sector is self-managed in this way but effectively a leaseholder in this market will have quite different rights to the rest of the market – no membership of a redress scheme or a regulator to go to. The FTT will still be the option.
The paper makes no mention of leaseholders in housing owned by social landlords. Will the new code apply to them? There is no existing code of practice that applies in the proposed way to these leaseholders. It is, has been and will be quite possible for managers in social housing to manage leasehold with no relevant qualifications.
How bad are leasehold managing agents? The government’s press release about this paper states that: “With thousands of renters and leaseholders suffering at the hands of rogue agents every day from unexpected costs, deliberately vague bills or poor quality repairs, a new mandatory code of practice is proposed to stop managing and letting agents from flouting the law.” It sets out no evidence for this statement.
In the government’s response paper it states that: “In 2016, over 5,000 complaints were made to the three property redress services, highlighting the scale of concern that tenants and leaseholders can have...” The government’s own statistics state there are 4.2 million leaseholders. The proportion of complaints is 0.119%. The major causes behind the current concern over leasehold has been leasehold houses and the ground rents market.
To read the paper click here
Government response to client money protection for lettings agents
On 1 April the government issued its response to a consultation paper which asked for views on whether client money protection should be compulsory for all lettings agents. Not surprisingly the government intends to implement this proposal and legislation has already been passed to allow this.
A total of 60% of agents are already thought to have this protection in place. There are currently several CMP schemes operating in the market and the majority of agents in the private rented sector belong to one of them. In order to ensure consistency in standards across scheme providers, the government intends to require schemes to be approved in order to operate.
To read the paper click here
The General Data Protection Regulations (GDPR) come into effect on 25 May 2018 and will apply to all businesses that hold and process personal data, including those with fewer than 250 employees.
The aim of the new regulations is to protect data related to all European Union citizens and failure to comply will mean a fine – which could be hefty. The new rules will apply to landlords, their property managers and their contractors and sub-contractors. For the purposes of the GDPR, ‘personal data’ means any information which relates to an identified or identifiable individual, including their name and contact details. In the property context it could also include:
- rent and service charge payments;
- data on energy usage;
- building and car parking security data;
- property occupancy data; and
- contracts between property owners and their property manager.
Anyone holding personal data of this kind must have data protection protocols in place. You will need to document who has access to what and how they access it – and this information must be readily available. Prior and specific consent must be gained in order to store data and customers will have the right to access all the information held. If they no longer want you to store their data, then they have the ‘right to be forgotten’, which means deleting all the information you are holding on them – including archived information.
In order to meet the new regulations, property management companies should review existing privacy notices and put a plan in place for making any necessary changes in time for GDPR implementation. Any security breaches must be reported. Customers must be informed of exactly what has been lost and any implications for them within 72 hours of discovery
So are you ready for the new Regulations? According to a report published in January, 60% of companies had not implemented the changes needed. With GDPR now less than two months away, companies should be better prepared.
However the most important step for companies struggling to achieve GDPR compliance by the end of May is to ensure they can demonstrate clear efforts to understand the legislation. According to business lawyers HRC Law (source: People Management) a more understanding attitude is likely to be shown towards businesses that may not yet be not fully compliant but are showing they are taking steps towards compliance, than to those that are simply ignoring their new obligations under the GDPR.
The Information Commissioner’s Office (ICO) has produced a helpful online guide to the GDPR, available to download here.
Government issues new powers to regulate HMOs
The Government laid the Draft Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 before Parliament in March. It said the regulation will give councils new powers to tackle the small minority of rogue landlords who rent out overcrowded properties. They will be able to impose fines of up to £30,000 for those landlords who do not comply.
From October 2018 councils will be able to set minimum bedroom size standards for HMOs – and also introduce limits on how many people can live in each bedroom. Councils will be able to use national minimum standards or apply even tougher requirements if they feel there is a specific problem in a local area.
Rooms used for sleeping by one person over 10-years-old will have to be no smaller than 6.51 square metres, and those slept in by two people over 10-years-old will have to be no smaller than 10.22 square metres. Rooms slept in by children of 10 years and younger will have to be no smaller than 4.64 square metres.
The HMO licence must specify the maximum number of persons (if any) who may occupy any room and the total number across the different rooms must be the same as the number of people the house is to be home to.
The new standards will apply to all landlords seeking new licences. Landlords of existing properties will be given up to 18 months to make necessary changes when re-applying for a licence when it expires.
New regulations under the Housing and Planning Act 2016 come into force
New regulations under Part 2 of the Housing and Planning Act 2016 come into force in April. The Housing and Planning Act 2016 (Banning Order Offences) Regulations 2018 S.I. 2018/216 will permit a local housing authority to apply to the First Tier Tribunal for a banning order, prohibiting someone from letting housing, or working as a letting agent or property manager (or any combination of these activities) if they have been convicted of a “banning order offence”. Such offences include:
- unlawful eviction or harassment contrary to the Protection from Eviction Act 1977 or the Criminal Law Act 1977
- failure to comply with an improvement notice, prohibition notice or certain HMO or other licensing offences under the Housing Act 2004
- failure to maintain gas fittings, contrary to the Gas Safety (Installation and Use) Regulations 1998 and the Health and Safety at Work Act 1974;
- failure to comply with the Regulatory Reform (Fire Safety) Order 2005.
No banning order may be made on these offences if the sentence on conviction was an absolute or conditional discharge.
Other relevant offences include:
- letting property to a person without a right to rent, contrary to the Immigration Act 2014
- specified dishonesty offences under the Fraud Act 2006 or the Theft Act 1968
- specified drugs offences under the Misuse of Drugs Act 1971;
- specified serious violent and sexual offences (sch.15, Criminal Justice Act 2003)
- concealing criminal property contrary to the Proceeds of Crime Act 200
- harassment and stalking (Protection from Harassment Act 1997
- breach of a criminal behaviour order or failure to comply with a community protection notice (Anti-social Behaviour, Crime and Policing Act 2014 or
- criminal damage to property (Criminal Damage Act 1971.
Also in April, the introduction of the Housing and Planning Act 2016 (Database of Rogue Landlords and Property Agents) Regulations 2018, means that anyone given a banning order by the FTT will be added to a national database of ‘rogue landlords and property agents’. Local authorities will be responsible for entering names onto the database as well as listing the length of the ban and giving details of the offence which led to it.
New guidance on landlords’ ability to claim costs
The Ministry of Housing, Communities and Local Government (formerly DCLG) has published guidance on legislative changes that empower courts and tribunals to restrict a landlord’s ability to claim costs for legal proceedings as an “administration charge” from a leaseholder. These changes came into force on 6 April 2017. The MHCLG guidance outlines the proceedings in which the new regulations apply and how they impact landlords and leaseholders. To download the guidance click here.
In the first of a series of legal columns for the Technical Update, Mark Loveday looks in detail at a recent case with implications for property managers
Managing agents are sometimes responsible for properties where a tribunal appoints a manager ‘for cause’ under the Landlord and Tenant Act 1987. In Coates v Marathon Estates Ltd [2018] UKUT 0031 (LC) the Deputy President of the Upper Tribunal dealt with the options for requiring managing agents to co-operate with such orders.
The facts were that M managed a block of flats and maintained the financial records along with other properties on its Qube software. In August 2016, the First-tier Tribunal (Property Chamber) appointed C as manager for the block under Pt.II of the 1987 Act. Its order required the landlord and its agents to deliver various records (including computer records) to C. In October 2016,M delivered 26 boxes of documents to C, and later provided information by way of electronic Dropbox files. C considered this was insufficient to enable him to draw up service charge accounts.
The Upper Tribunal identified three ways a manager might enforce a management order:
(a) He could apply for a County Court injunction requiring the landlord to enforce the FTT’s management order.
(b) The FTT could order the production of documents under Rules 8(5) and 20(1)(b) of the Tribunal Procedure (First-tier Tribunal) Property Chamber Rules 2013. The manager then applies to the Upper Tribunal to enforce the production order.
(c) The FTT could endorse the management order with a penal notice. The manager then applies to the County Court under section 176C of the Commonhold and Leasehold Reform Act 2002 to secure compliance with the management order by way of committal proceedings.
The first option has already been rejected by the High Court in earlier proceedings involving the same property: Coates v Octagan Overseas [2017] EWHC 877 (Ch). The second option was rejected in this particular case. The Upper Tribunal found (with some regret) that the procedure adopted did not fall within Rules 8(5) and 20(1)(b), which were essentially case management powers. But the third course of action was still open to the manager. The Deputy President stated that “if … the Manager still wishes to pursue the respondent over the release of the computer records, he should … first ask the FTT to add a penal notice to the order of 26 June and then seek the consent of the County Court under section 176C to enforce the order in the same way as an order of the County Court itself.”
So the implications for managing agents are clear. Despite the specific result in this case, they still face committal to prison if they fail to co-operate with a management order under the Landlord and Tenant Act 1987.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
Certification of service charge accounts and liability to pay service charges
A recent Upper Tribunal case has illustrated once again what can go wrong if you do not correctly follow the terms of the lease in preparing end of year accounts. In Urban Splash Work Limited v Gary Ridgway, Mary Bridget Cunningham (ref: UKUT 0032 (LC) & LRX/93/2017, the lease required a certificate of the service charge accounts by an independent accountant to be prepared asap after the end of the financial year. Service charge accounts had been issued but no certificates by an independent accountant had been issued for the years 2010-16 and a lessee challenged the service charges levied including any deficits rolled forward. Read here for a full case commentary detailing the implications of this decision for property managers.
Citiscape – Tribunal determines who pays for cladding
The London Residential Property First-Tier Tribunal has made its determination for Various leaseholders of Citiscape in Croydon. In this case, the property manager, FirstPort Property Management Services Ltd, applied to the FTT to establish liability to pay service charges.
The Tribunal decided that the costs incurred in the provision of the waking watch to 19 December 2017 were reasonable, and that a service charge is payable in respect of those costs. Further, the estimated costs of £483,000 for the replacement of the cladding included in the 2017/18 budget was reasonable, and that a service charge is payable in respect of those estimated costs.
In recent months the government has fixed the leasehold sector firmly in its sights, aiming to improve the leasehold experience for lessees and putting the service provided by property managers under scrutiny.
David Goldberg, CEO of recently launched POD Management recently commented (read David's blog here) that one of the biggest complaints he hears about managing agents is the constant churn of assigned property managers. A recent report in The Daily Telegraph puts the cost to British companies of employee turnover at £4.13bn each year – a staggering sum that can only be bad news for business.
Alice Cadfan-Lewis, managing director at recruitment specialist Block Recruit confirms that high levels of staff mobility have a far-reaching negative impact on property management companies.
“A staff member leaving can result in a re-shuffle of account handling, which in turn could lead to a potential loss of a client and the resulting loss in revenue,” she says. “As the company reacts to any resulting change in finances and subsequent cuts in spending, staff can feel unsure of their position and future at the company – and it’s this destabilisation that results in a negative reputation for the employer and further staff leakages”.
Block Recruit estimates that most property managers changing jobs will do so after 2-3 years with the same company. The three most common reasons given for leaving are:
- Money;
- Job stability - with a lot of acquisitions happening in the industry, this can be unnerving for employees; and
- Being over worked and under-valued.
So what can property management firms do to address these problems and create a happier, more stable workforce? Alice identifies three key areas that employers should tackle in order to engage their staff and improve retention rates:
- career progression
- new challenges and
- making staff feeling valued.
Here are her tips for improving retention levels.
Succession plans are a must for any employer. Mapping out a career path for your staff shows them what the objectives are, what their key performance indicators are, and a timescale in which to achieve their goals. Firms should work towards having a pool of internal trained applicants.
Having regular appraisals is important. It’s a chance for employers to address any issues staff may have. Sometimes just talking to people about their problems and achievements can stop staff from looking around for something new. Discuss a new challenge with your employee, increase their responsibilities, and mentor them until they succeed.
Feeling under-valued is common in the property management sector where some managers are responsible for in excess of 2000 units. If the size of the portfolio cannot be reduced, or an assistant provided, employers could consider introducing more flexible hours, working from home or giving staff time off in lieu.
With the change in the law governing flexibility in the workplace introduced in 2014, employers can now be far more accommodating with working hours for all their staff - not just those with children or other care commitments. Shelley Jacobs from MLM Property Management recently commented that, perhaps surprisingly, “flexible working came out higher in motivational studies on employees over remuneration. Flexibility may be challenging to facilitate, but allowing for even small degrees of flexibility can really make a significant difference to employee loyalty and commitment”.
Shelley believes a negative company culture is like Japanese Knotweed, “once it’s in, it’s very difficult to shift,” she says, explaining that numerous studies highlight a positive correlation between happier staff and productivity at work and there are significant tangible benefits to consider, yielding quantifiable returns on the investment in your staff. “If you are a property manager, what happens if you don’t manage a building well? Or if you fail to understand the nuances and individuality of that building and don’t effectively plan for its future? The same logic needs to be applied to staff because nurturing your staff is about investing in one of your biggest assets,” she says. Shelley believes in giving employees a voice; she advises asking staff what they think and giving them some freedom to make decisions about their working lives. Also important is providing jobs with clarity and purpose that are well defined and structured and updating job descriptions regularly as the working environment changes.
A bonus scheme or company reward package could also go a long way to making your staff feel motivated and satisfied – and doesn’t have to be all about money. Vouchers, gym membership or experiences such as track days and sporting activities can all help motivate and reward staff.
Both Alice and Shelley agree that effective employee engagement takes time, investment, energy and open mindedness. “Ensure that training programmes are in place, industry reading lists are provided, and good pay structure and benefit packages are openly discussed to help create a culture of trust between employers and their teams, “ says Alice. And with a large number of women employed in property management – mind the gender pay gap. This is a topic that will be addressed in a future issue of Technical Update.
IRPM
25 April 2018 - Member Exam in London & Birmingham
23 May 2018 – Annual Seminar - London
15 August 2018 - Associate Exam Workshop - London
16 August 2018 - Associate Exam Workshop - London
11 September 2018 - Associate Exam in London & Birmingham
03 October 2018 - Member Exam Workshop - London
04 October 2018 - Member Exam Workshop - London
30 October 2018 - Member Exam in London & Manchester
ARMA
To book ARMA training courses
IRPM members (associates and above) can attend ARMA courses at the discounted ARMA members rate.
Introduction to Residential Property Management
London – 09/05/18, 06/06/18, 27/06/18, 1/08/18
Residential Service Charge Accounts Guidance
London 17/04/18, 26/06/18
Manchester 15/05/18
Fire Safety Management for Residential Managing Agents
London 20/04/18
GDPR Workshop (morning or afternoon)
London 19/04/18
LEASE Webinars
LEASE has many webinars held previously on a wide range of subjects and are free to download.
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
Introduction to Leasehold management
London 11/10/18
Coventry 3/7/18
RTB & RTA
London 16/11/18
Coventry 3/7/18
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
