The month in brief
Welcome to the April issue of your Technical Update. Lockdown is now the new normal and the property management sector has quickly become accustomed to working remotely. In many cases business continuity planning has paid off but what will the profession look like when the world emerges from quarantine? Will it be business as usual or will everything have changed?
April’s issue focuses on a number of different aspects of the pandemic as it impacts your day-to-day work. We provide links to the most recent government guidance and also take a closer look at technology, travel, working with contractors, staff recruitment and wellbeing. Looking ahead, our Talking Points this month consider the post-pandemic future for the property market and look at some of the COVID-19 questions we’ve come across in the last month.
Proptech specialist James Dearsley has observed that amidst the pandemic we are getting both more hi-tech (Zoom) and more traditional (baking bread and growing vegetables). The middle ground is disappearing and this seems to be happening in other areas too:
- we are getting both global and hyper-local at the same time – there’s not much in-between.
- we are either accepting long hair, or going for a skin head.
- we are either drinking to excess or giving up alcohol all together.
- we are either trying to communicate with everyone or communicating with no one
How do you fit into this ‘Covid spectrum’, if at all?
We would love to hear about your experiences of remote working and the ways you are keeping yourself and your staff or colleagues engaged, effective and in good spirits. We report on all this and more in this issue, so if you have a comment or an opinion to share, why not join the [email protected] with title "IRPM Update Idea - FAO Marketing"
Contents
IRPM News
CEO’s column | IRPM sets up new LinkedIn members’ forum | IRPM launches first in new series of white papers | Introducing our new board members | Meet our new marketing manager
Leasehold / block management
Mayors pledge to continue cladding work | Social distancing in the workplace | Waking watch buildings suffer 300 fires since Grenfell | ALEP reports sharp rise in enfranchisement enquiries | Travelling during lockdown | And now for some good news…
PRS & BTR
Rental market could “explode” after lockdown says agent | Property Redress Scheme launches tenants mediation service | HSE: gas safety checks must still go ahead | Coronavirus: right to rent checks
Scotland and Wales
Fire safety guidance for high-rise properties in Scotland | Scotland ‘unlikely’ to meet 50,000 homes target | Round-up of COVID-19 advice for Scotland | New fees regulations now in force in Wales
Health and safety
COVID-19 guidance from HSE
What’s new in HR?
Wellbeing at work – how are you feeling today?
Fire safety
Non-ACM products less dangerous than Grenfell-style cladding, says BRE | Grenfell Inquiry may continue despite COVID-19 outbreak
Legislation
Government announces Building Safety Bill | MEES Regulations now in force | Compliance with client money protection scheme for property agents extended to 2021
Legal update
Mark Loveday rounds up this month’s case law
Talking points
Why COVID-19 won’t kill the property market | Property management COVID-19 conundrums: service charge holidays, contractors on site and using virtual tech
Topic of the month
Recruiting in a crisis – and at a distance
What’s new on the Resource Hub?
Coronavirus and your business | Case law
Good reads
Our pick of some of this month’s interesting and informative longer reads.
IRPM News
I am not going back. And I am not alone.
Andrew Bulmer finds the positives amid the pandemic
We are living through an awful period of history, with the incalculable pain and suffering of tens of thousands of deaths. Covid-19 is brutal and I fear for my family, especially my elderly (if deliciously feisty) parents, who are now resigned to spending a good chunk of their retirement isolated from their family and friends.
I won’t lie to you; I’ve been stressed and anxious. I think most of us have. Elsewhere in this Technical Update and earlier IRPM bulletins is some great advice on wellbeing. I found it helpful.
And yet… there are some fantastic positives. Creativity and humour have shone through in abundance. And, with sufficient loo-rolls stashed away, people are refocussing on getting things moving again. This hideous crisis has given us the kick in the pants we needed to learn new tricks fast.
Our old ‘business as usual’ is revealed for what it was: too much waste, too much noise. Online meetings are shorter and more focussed and the travel time is Dr-Who-quick (and yes, I have a Tardis image as one of my many backgrounds). Carbon emissions cut, Greta happy, costs saved, time saved, mission accomplished and I haven’t worn a suit for 6 weeks! I am liking this upside. And I’m telling you now, I’m not going back to our old ways when we leave lockdown behind. We must not forget these lessons and slide back to waste and noise, for the planet’s sake as much as for business efficiency.
Out on site it is a different matter I accept, where maintaining services is tricky and fixing broken/unsafe buildings very difficult indeed. Complying with vague rules and managing the wide variety of customer expectations is not new to property managers, but those challenges are on a whole new level just now.
Again, innovation is happening, with AGMs via Zoom and customer engagement through WhatsApp and regular updates. Some firms are now communicating with their customers far better than they did before the crisis. And on communications, IRPM are working tirelessly to keep you up to date, with several bulletin updates a week giving you the very latest essential information as it happens.
The IRPM team is busy working from home, staying safe and delivering new services at speed - and members are responding fantastically. The new 6-month Build-to-Rent course, delivered digitally online like all IRPM courses, was launched during COVID-19 and immediately smashed our record cohort size, as professionals get serious about upskilling. And stand by for more learning news – we will be announcing new courses in a matter of days.
We are getting brilliant feedback on our first Tech Insight White Paper, just published, which asks what needs to happen for technology to improve building and life safety. Eventually, COVID-19 will pass but safety will not and this White Paper could not be more timely.
Technology, sharing, community, insight, online. All words that fit the new IRPM Members’ Forum on LinkedIn. It is for members only, a safe space to share views and ask peers for help and wisdom. Get your request for entry to us now and join the discussion. Especially, use it to tell us where the pain points are, as we can feed your insight straight into government and other stakeholders.
Domestic abuse is on the rise in lockdown. Abuse can include coercive control and economic abuse, as well as more obvious violence. It is happening in buildings we are managing. It’s also happening in our staff teams and even our own families. The 2018 IRPM Annual Seminar ran with this issue and again in 2019. We confront it today in lockdown, with a cross-body publication for you to share as widely as you can.
Finally, service charge arrears. I’m getting mixed reports, with some agents having real problems and others almost unaffected. The reality is some customers are just trying it on, while others are genuinely struggling and need help. There is a theme emerging; the agents that are communicating with their customers, demonstrating active management and keeping people informed, are doing better.
When customers say they cannot pay, the agents reach out with a hardship form/process to understand genuine difficulty and try to accommodate it, perhaps with a payment plan. Entering that dialogue is deterring the curious chancers, protecting those in genuine need and getting funds in to keep the estates running. I’m not saying it works every time, but it seems sensible to me.
Be kind and stay safe!
Andrew Bulmer, CEO, IRPM
IRPM sets up new LinkedIn members’ forum
During this challenging time, the importance of peer-to-peer support and collective intelligence has become increasingly clear. At the IRPM we have been inundated with contacts from members, organisations and other associations, both seeking and sharing advice and guidance as we navigate our way through this uncertain period.
To help support you, we have created a private forum on LinkedIn for IRPM members to reach out to each other, ask questions, and share good ideas and best practice.
To join the group, please follow this link and select ‘request to join’. We hope that you find this a useful resource and we look forward to welcoming you to the forum.
First in new series of White Papers tackles building safety
At present, Covid-19 presents a huge challenge to the UK property industry but, despite the lockdown, we cannot ignore our sector’s other biggest issue – building safety. Post-Grenfell, safety in the residential block sector is being completely overhauled and many of the recommendations coming from the Hackitt Review hinge on data collection and management.
When asked, 84% of IRPM members agreed that technology can be used to improve on-site safety. This highlights the need for the profession to examine and fundamentally change the way in which we view and use technology.
With this in mind, in the first part of our 2020 Tech Insight programme, we brought together a group of leading industry experts to discuss technology in light of building safety. Our newly published White Paper Who shares wins: the impact of technology on building safety captures this conversation, detailing the importance of data-sharing and advances in building technology in the residential block sector. It also sets out next steps for the property management profession.
As we continue our series of dedicated technology white papers, each will address in turn, the IRPM’s 4 Elements of property management professionalism:
• Technical competence
• Safety
• Customer and consumer
• Ethics and behaviours
Click member forum is now open for further discussion.
Introducing our new board members
We are pleased to welcome two new members to the IRPM board: Jess Parmar and Mark Varley. As some of you will know, Jess was formerly head of brand standards and customer experience at Mainstay and is now Chief Operating Officer at PBM Property Management. Jess has more than 16 years’ experience in UK, EMEA and global markets and we are delighted to welcome her as our new consumer services champion.
Mark Varley is also well known within the property management sector and heads up health and safety at FirstPort. Mark has more than 25 years’ health and safety leadership experience across a range of different industries including manufacturing and energy as well as property. He has led significant improvements in performance, standards and culture in a number of organisations and brings a wealth of industry-leading knowledge to our board.
Our two new board-level champions are part of IRPM’s ongoing development of member skills and focus on safety and the customer, two of the IRPM ‘4 Elements’ of property management professionalism. We look forward to working with both of them in future.
Meet our new marketing manager
As well as new board members, we are also pleased to introduce you to our new marketing manager Karina Takhar, who joined the IRPM in February. Karina has nine years’ experience of marketing, having worked in finance, hospitality and the not-for-profit professional body sector.
Karina joined IRPM just three weeks before lockdown and everyone started to work from home, but has hit the ground running, delivering the IRPM Covid bulletins, for example, and is looking forward to meeting members in person later in the year.
Leasehold/block management
Mayors pledge to continue cladding work
Local leaders pledged in April to ensure essential safety work to replace unsafe cladding on high-rise buildings will continue, despite the Covid-19 pandemic.
The Mayors of Greater Manchester, Sheffield City Region, London, Liverpool City Region and the West Midlands told Housing Secretary Robert Jenrick that cladding replacement works will continue with, where necessary, social distancing rules in place. They hope the pledge will reassure people living in high-rise buildings with unsafe cladding that work to make their homes safe will be prioritised.
A number of sites across the country have been leading the way, adapting their procedures in ways that include:
• having decontamination areas on site, enabling workers to hose down overalls before safe disposal
• providing additional toilet and washing facilities, reducing the number of workers gathering together
• splitting up work teams with a view to minimising the risk of infection
In order to support this vital work, the Ministry of Housing has appointed a firm of construction consultants, Faithful & Gould, to advise those planning and doing ACM cladding remediation work, including identifying and increasing awareness of safe practice under current Covid-19 restrictions.
Social distancing in the workplace
The government has provided sector specific guidance on how to apply social distancing in the workplace in England. This was also reviewed by Public Health England and the Health and Safety Executive and includes updated guidance for construction workers making clear that ‘work on-site can continue if done in accordance with the social distancing guidelines wherever possible’.
Where work continues on-site, detailed guidance is available from the Construction Leadership Council on further reducing the risk, including measures for maintaining high standards of hygiene. You can download the guidance here.
Waking watch buildings suffer 300 fires since Grenfell
Despite more than 420 buildings across England now being protected by a 24-hour waking watch due to serious fire safety issues, this still hasn’t prevented fires breaking out in those blocks.
More than 300 fires have been recorded as taking place in these buildings in the nearly three years since the Grenfell Tower fire according to new figures collected by Inside Housing, revealing the scale of the fire risk in residential blocks. The data was published as the National Fire Chiefs Council (NFCC) issued guidance reminding building owners that the provision of waking watches is “paramount” during the coronavirus crisis – due to the increased fire risk from so many people spending more time at home.
Click here to download the latest guidelines.
ALEP reports sharp rise in enfranchisement enquiries
The Association of Leasehold Enfranchisement Practitioners (ALEP) has reported a significant increase in interest in lease extensions as the COVID-19 lockdown gives leaseholders time to review their leases. ALEP's website has experienced a major spike in traffic since the beginning of March, as leaseholders, and freeholders, find out more about enfranchisement options and source accredited practitioners.
Clare Grove, ALEP’s Marketing Manager, said: "We have seen a consistent increase in web visitors since the lockdown started, with almost 25% more traffic than we would usually see. Extending your lease is one of those tasks that can seem a bit daunting and is often put to the bottom of the pile, but it seems as though the enforced lockdown has given leaseholders the time they need to address the issue."
Feedback from ALEP member firms has also reinforced the statistics, with many members reporting an increase in enquiries during the last few weeks.
Travelling during lockdown
During the lockdown, workers going about essential business are sometimes challenged by the police. So in case you missed our COVID-19 Bulletins earlier this month, the IRPM has worked with MHCLG, HSE and the lift sector, including Zurich Engineering, to clarify who should and should not be travelling, for example to carry out necessary work including the safety and maintenance of buildings and ensure critical services such as lifts continue to operate.
IRPM has swiftly produced a standard letter that can be shown to confirm a journey is legitimate, later updated to include other bodies such as British Property Federation, ARMA and the UK Apartments Association.
The IRPM has sent a copy of the template letter to property management businesses for them to complete and give to workers. If you don’t have a copy, you can download one including the BPF, ARMA and UKAA plain template here.
And now for some good news…
We could all do with some positivity right now so here are some of the good news stories from our sector that we’ve come across in the last few weeks.
Property industry gets together to ‘Do some Good’
Do Some Good is a property industry initiative led by professionals across the sector that helps disadvantaged people in communities around the country. In recent weeks it has thrown itself wholeheartedly into supporting the NHS and key workers during the pandemic.
The DSG team, which includes people from Deverell Smith, Greystar, AZ Real Estate, Under the Doormat, Stay Beyond and many others, are doing an amazing job. Deverell Smith has a whole team of furloughed staff working all day, matching offers and needs.
Specific requests have included 60 mini fridges needed for hostels in Westminster and the need for housing near the Nightingale Hospital for the army. DSG has already been hugely successful in finding accommodation for NHS Staff and those fleeing abusive relationships but there will be ongoing demand for more.
Free furniture is being offered and DSG has found a new space for a not-for-profit organisation in Bath producing 40,000 face protectors a day in response to COVID-19. Many care homes are desperate for this equipment, so if any IRPM member would like to donate money or buy protectors and enable them to be donated to organisations that cannot buy them, or even if you need them for your own teams, go to www.foldall.co.uk for details.
If you have a connection with a charity, DSG has volunteers with cars/vans to deliver supplies, so if you would like to get involved go to the website at Do Some Good to find out more. DSG is also going to be launching a “plank” challenge to raise some money for the charities it supports, so why not take part and give them some help that way.
CBRE supports NHS workers
CBRE is doing a fantastic job helping identify suitable properties within close proximity to an NHS or private hospital which could be occupied by the NHS for the duration of the Covid-19 pandemic. They are particularly interested in finding suitable car parking space.
Proptech takes to the streets
Proptech firm Kamma and several other firms have built CoronaFriend.com to help local volunteers organise themselves better and help vulnerable residents on their street. The aim is to help local people shield and assist elderly and vulnerable neighbours by helping local volunteers to coordinate their activities and identify which residents need help.
Volunteers can use Coronafriend to download a leaflet to print off and post through neighbours’ letter boxes, offering help with shopping and cooking or to simply arrange a chat to stop people who are self-isolating feeling so lonely.
Supporting food banks
Property management software provider Yardi, has made a $2M commitment to support food banks during the global pandemic. The company is also working on tools and free online training to help clients with business continuity.
PRS & BTR
Rental market “could explode” after lockdown says agent
Not surprisingly the UK lettings market has seen a huge decline in demand due to the COVID-19 outbreak, as the lockdown has dramatically reduced numbers of new tenancies. However, the market, “could explode quite quickly” when the lockdown ends, according to Knight Frank (source: Letting Agent Today). The agency says that in normal years tenancies peak around July and then decline sharply. However, it expects 2020 “to be radically different”.
Knight Frank is now preparing for a busy late summer period, reporting pent up demand rather than withdrawal from the market. In London in particular there’s a finite amount of stock available. Allsop partner Lesley Roberts agrees that the market may take off rapidly later in the year, but she sounds a word of warning: “in my opinion this will be predicated on the position of the economy as a whole and the depth, speed and phasing of the ‘unlockdown’. The un-lock will determine the speed of the economic recovery and thus the knock on affect for employment which in turn impacts on rental levels and what renters may actually be able to afford,” she says.
Dave Butler, CEO of the UK Apartment Association (UKAA) believes the BTR sector is particularly well placed to respond to any upturn in demand later in 2020. ”There is significant new capacity coming on stream this year and beyond,” he says.
Property Redress Scheme launches tenant mediation service
The Property Redress Scheme has launched a tenancy mediation service for landlords or their appointed letting agent and tenants, to help resolve issues which have arisen during a tenancy. The service was in planning prior to COVID-19 but has been brought forward to support landlords and tenants struggling with the impact of the pandemic.
While possession cases are suspended, the Government is urging landlords and tenants to come to agreements. This advice is likely to continue in the future as the MHCLG is working with the master of the rolls to strengthen pre-action protocol requirements and extend this to possession claims in the private rented sector. This will put the onus on all parties to negotiate and reach an agreement, rather than go to court.
Paul Shamplina, founder of Landlord Action comments: “Our recent survey found that 74% of landlords have already been contacted by tenants who are struggling to pay rent due to reduced or terminated employment resulting from the pandemic. With the reality that life will not return to ‘normal’ for some time, the most sensible solution is mediation, particularly as landlords will be unlikely to be able to gain possession of their properties for 6-9 months or more”.
HSE: gas safety checks must still go ahead
Amid residents’ concerns about letting engineers into their homes during the lockdown, since 23 March the IRPM has been liaising with HSE and the MHCLG about the need for mandatory landlord gas safety checks – and whether or not statutory examination periods could be extended.
Following engagement with the inspection industry, HSE has now published revised guidance to address some of the issues that we have raised with them, including prioritisation of statutory inspections and also the measures necessary for people to work safely at others’ premises.
Currently the gas safety regime requires engineers, who may meet the definition of key workers, to visit people’s homes to carry out safety related work. The current advice from the government is that tradespeople can continue to work in people’s homes, subject to sensible precautions in relation to COVID-19. The full advice can be found here.
HSE points to the flexibility that the Gas Safety (Installation and Use) Regulations (GSIUR) and associated guidance already provides in allowing landlord’s safety checks to be carried out in advance of the due date, and the exception to liability if duty holders can show they have taken reasonable steps to comply with their legal duties. There are no current plans to introduce changes to these legal requirements, such as an extension to the time period for a landlord’s gas safety checks.
However, the HSE is monitoring activities in this sector and working closely with the Gas Safe Register to keep the effectiveness of this approach under continual review. It is also working on some sample scenarios to help landlords understand what reasonable steps might look like in the present environment. Any new information and updates will be published on the Gas Safe Register’s website.
The National Residential Landlords Association is now calling on the government to delay the introduction of new routine Electrical Installation Condition Reports which are due to come into force on July 1.
You can download the government guidelines on safely carrying out repairs in rental properties here.
Coronavirus: right to rent checks
The Government has published new guidance for landlords on the right to rent checks required by the Immigration Act 2014 during the COVID-19 outbreak. During the current lockdown, landlords no longer need to see hard copies of ID documents. Instead, a scan or photo of an original document may be sent to the landlord or agent for review by email and the document can be verified by the prospective tenant showing it during a video call. Once the current health emergency is over, landlords will be required to carry out in-person checks within eight weeks. The guidance can be found here.
Scotland and Wales
Fire safety guidance for high-rise properties in Scotland
Posters encouraging residents of high-rise properties to keep common areas clear of anything that could be a fire risk are now being issued to building managers across Scotland. The posters promote a strong Keep it clear message, setting out good practice and highlighting the real effects of fires in common areas. There is also a specific section for building owners and managers to include contact details for residents to report any fire risk issues.
To download copies of the posters and guidance for building managers high-rise inventory has also been published for the first time, to establish a detailed picture of Scotland’s domestic high rise buildings, and help to ensure fire safety through identification of a building’s construction and fire safety characteristics.
Scotland ‘unlikely’ to meet 50,000 homes target
The Scottish housing minister has said the Scottish government is unlikely to meet its target of delivering 50,000 affordable homes by 2021 due to the coronavirus pandemic (source: Inside Housing). The target of delivering 50,000 affordable homes was set by Scottish first minister Nicola Sturgeon in 2015. Between 2016/17 until December 2019, the country had been very successful in achieving this goal, with just under 40,000 grant-funded affordable homes constructed.
However, housing minister Kevin Stewart said in April that: “…unfortunately the current COVID-19 pandemic makes it unlikely that we will reach that target and for now our priority has to be to ensure the health and well-being of all of our people.”
Since the introduction of greater social distancing measures in response to the coronavirus crisis, the Scottish government has ordered that all construction sites should close down. This is a different stance than the one being taken by the UK government, which is advising that sites can stay open if they adhere to social distancing rules.
Round-up of COVID-19 advice for Scotland
The Scottish Government has dedicated a section of its website to COVID-19 advice and guidance for businesses as well as for the general public. For more information click here.
New fees regulations now in force in Wales
New regulations on the maximum allowable level of fees landlords in Wales can charge when a tenant defaults on their contract came into force in April. The Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020 mean that landlords in Wales can now only charge tenants for the cost of replacing keys, and for changing, adding or removing a lock.
Landlords will still be able to charge for late payment of rent, but only after seven days. This is different to the law change in England, where under the Tenant Fees Act landlords can’t charge for late payment of rent for 14 days.
The tenant fees ban was introduced in Wales last September, as part of the Renting Homes (fees etc) (Wales) Act 2019 and has been rolled out in different stages.
Health and safety
COVID-19 guidance from HSE
The HSE has produced guidance for businesses on social distancing, keeping businesses open and in-work activities during the coronavirus outbreak.
While social distancing is fundamentally a public health measure introduced to reduce the spread of infection, HSE recognises the concerns raised by social distancing in the workplace. Where employers who are not taking action to comply with the relevant Public Health Engalnd guidance to control public health risks, the HSE will consider taking a range of actions to improve control of workplace risks. These actions will range from provision of specific advice to employers through to issuing enforcement notices where they are deemed necessary.
The HSE advice to employers is to keep businesses open unless they have been specifically ordered to close by the government. Property managers do not fall into this category and so should be following the HSE advice to “take every possible step to facilitate their employees working from home. Where it is not be possible to work from home you can still travel for work purposes, provided you are not showing coronavirus symptoms and neither you nor any of your household are self-isolating”.
Property managers who have people in their offices or on-site should ensure that employees follow Public Health England guidelines on social distancing (including, where possible, maintaining a 2 metre distance from others), and hygiene (washing their hands with soap and water often for at least 20 seconds). Follow government guidance on how to keep your employees safe.
Click here to read the guidance.
What’s new in HR
Wellbeing at work – how are you feeling today?
It is perhaps not surprising that data shows four out of five adults are worried about the effect that COVID-19 is having on their life right now, with more than half saying it affected their wellbeing and nearly half reporting high levels of anxiety.
Public Health England’s Every Mind Matters website includes new NHS expert tips and advice on looking after mental wellbeing and supporting your family and loved ones during this time. Follow this link to find out more.
Here are Vitality’s tips:
• Focus on what you can control, not what you can’t
• Stay connected to your support network
• Self-edit your news and media
• Reshape your social media feed
• Focus on the tangible
• Talk to yourself (yes, really!)
The World Health Organisation has also produced some helpful guidance, which you can . The WHO advises minimising watching, reading or listening to news about COVID-19 that causes you to feel anxious or distressed and to seek information only from trusted sources; seek information updates at specific times during the day, maybe just once or twice. The sudden and near-constant stream of news reports about an outbreak can cause anyone to feel worried. Get the facts; not rumours and misinformation. Facts can help to minimise fears.
Property recruitments specialist Block Recruit has developed a 12-week wellbeing plan aimed specifically at property managers, that you can access easily via their website.
They also have a couple of blogs that are well worth a look. Read Block Recruit’s Fun in the workplace = An engaged, productive, healthy workforce.
The recruitment specialist also produced a wellbeing White Paper last year that makes an interesting read. Go to Good Reads to download a copy.
Finally, why not join our new IRPM LinkedIn forum, which aims to offer support, share knowledge and give our members a place to connect.
Fire safety
Non-ACM products less dangerous than Grenfell-style cladding, says BRE
In a report published at the beginning of April by the Building Research Establishment (BRE) non-ACM cladding is claimed not to pose the same level of risk as the type of cladding used at Grenfell Tower.
A range of non-ACM products was tested, including high-pressure laminate (HPL), timber, zinc, copper and aluminium honeycomb cladding panels. The BRE said none of these products “show the same or a similar type of fire performance to that of the [polyethylene-cored aluminium composite material (ACM)] panels” used on Grenfell Tower. However, further testing of more dangerous cladding products was also recommended by the BRE.
The full report can be downloaded here.
Grenfell Inquiry may continue despite COVID-19 outbreak
Inside Housing revealed in April that the public inquiry into the Grenfell Tower fire is consulting with witnesses about whether it should continue hearings despite the need for social distancing during the lockdown.
The inquiry team is considering three options:
- Suspend hearings completely until the government has completely lifted social restrictions
- Conduct hearings remotely via a video conferencing platform,
- Resume hearings with limited attendance once social restrictions have been partially lifted.
The inquiry was suspended in March, having recently begun phase two hearings. However, work is continuing behind closed doors, with documents being disclosed to participants, evidence being analysed and questions produced for witnesses.
Legislation
Government announces Building Safety Bill
A Building Safety Bill is set to be introduced later this year, potentially before the next Parliamentary recess, with new measures to include mandatory sprinkler systems and consistent wayfinding signage in all new high-rise blocks of flats over 11 metres tall.
On 2 April, Housing Secretary Robert Jenrick MP announced the latest steps to further reform the building safety system as well as the appointment of the government’s construction expert, David Hancock, to review the progress of removing unsafe ACM claddings from buildings.
The reforms are designed to incentivise compliance and to better enable the use of enforcement powers and sanctions, including prosecution where the rules are not followed.
The Housing Secretary also announced that he will hold a roundtable with mortgage lenders to work on an agreed approach to mortgage valuations for properties in buildings under 18 metres tall, providing certainty for owners affected by vital building safety work.
In addition, the housing industry will develop a website to enable lenders and leaseholders to access the information needed to proceed with sales and re-mortgaging.
Andrew Bulmer comments: IRPM members report that valuers and lenders are sometimes asking for the EWS1 form to be completed for buildings under 18m, something the form was not designed for. IRPM is liaising with lenders, who confirm this is sometimes the case, where valuers have identified cladding that may pose a risk. Valuers are rarely able, within the restrictions of a mortgage valuation, to comment on the safety or otherwise of external cladding and the EWS1 form is at least a standard form to use to have the safety of the cladding confirmed. The problem is that getting a building surveyed and certified can be a slow and expensive process, allied to possible difficulties recovering the cost of the survey. There is no one-size-fits-all solution to this right now and we are hearing instances of over-zealous use of the form. On the other hand, three catastrophic fires including the Bolton Cube student block have taken place in buildings under 18m over the last few months and, irrespective of the purpose of the EWS1 form, it has to be right that the construction and safety of a building is fully understood and able to be certified as safe.
MEES Regulations now in force
With effect from 1 April, landlords cannot let, or continue to let, domestic, private rented properties (which includes Assured Tenancies and Rent Act Tenancies) where there is a valid EPC with a rating of F or G. These properties are categorised as “sub-standard” under the Minimum Energy Efficiency Regulations (MEES). If such a property does not currently have a valid EPC, landlords should consider when an EPC is now required.
Properties are exempt if:
- a landlord can prove that undertaking the relevant energy efficiency improvements would reduce the market value of the property by more than 5%.
- a landlord can prove that the cost of buying and installing the cheapest recommended improvement is more than £3,500.
- a landlord buys a sub-standard property that was already let on an existing tenancy.
- a landlord needs the consent of a third party to do the improvement works, but cannot obtain such consent; or
- certain recommended wall insulation systems cannot or should not be installed even though they do not exceed £3,500
Any exemption must be registered on the Private Rented Sector Exemptions Register, together with supporting evidence.
Compliance with client money protection scheme for property agents extended to 2021
The Client Money Protection (CMP) regulations came into force in April 2019. The regulations made it mandatory for property agents in England to join any of the government backed schemes designed to safeguard clients’ money from misappropriation by agents. The schemes include CM Protect, UKALA, NALS, ARLA Propertymark, RICS and Money Shield.
As part of the scheme agents are expected to:
- hold clients' money in a separate client money account with a bank or building society authorised by the Financial Conduct Authority
- get a certificate confirming their membership of the scheme and provide it to anyone who asks, free of charge.
Agents were originally given a 12-month grace period to comply with the requirement to hold client money in a client money account until 1 April 2020 but this has now be extended for a further year, giving agents up to 1 April 2021 to be compliant with the requirement to hold client money in a separate account.
Legal update
Who pays what and why?
Mark Loveday takes a closer look at a case that dealt with the thorny issue of service charge apportionments
Williams and others v Aviva Investors Ground Rent [2020] UKUT 111 is a case heard in the Lands Chamber of the Upper Tribunal on 6 April. The lease of a flat stated that the service charge was based on an apportionment of X% of the landlord’s costs “or such part as the Landlord may otherwise reasonably determine”. The landlord wanted to amend the apportionments for all the flats but the leaseholders challenged the apportionment exercise in the First-tier Tribunal.
Central to the appeal was the effect of s.27A(6) of the Landlord and Tenant Act 1985. Did s.27A(6) strike out the landlord’s power to determine new figures and require the landlord to keep the original fixed apportionment? Or could the Tribunal review the re-apportionment exercise and determine reasonable new percentages?
To come to its decision, the Upper Tribunal reviewed two cases: Windermere Marina Village Ltd v Wild and Barton [2014] and Gater v Wellington Real Estate Ltd [2019]. In both cases, the FTT was found to have jurisdiction to re-apportion the service charges. But neither involved an initial fixed percentage apportionment, as was the case here. The effect of s.27A(6) is that the words “or such part as the Landlord may otherwise reasonably determine” are void. They are deleted. They no longer appear in the lease. It followed that the original fixed percentages stood, and the FTT had no power to substitute its own figures.
Why is this case useful for property managers?
The wording of this lease is probably more common than the formula used in Windermere or Gator. But if a landlord wishes to carry out a re-apportionment exercise, a Tribunal will only be able to do so if there is no original fixed apportionment. In such cases, it can only re-apportion by agreement or apply to vary the leases under Part IV of the Landlord and Tenant Act 1987. The Tribunal cannot do so under the 1985 Act.
Other must-read cases
There have been two other cases this month that are notable and of which property managers should be aware.
LM Homes Ltd and others v Queen Court Freehold Company Ltd [2020] EWCA Civ 371 was a collective enfranchisement claim. The landlord granted a lease of the airspace above the block of flats and further leases of parts of the basement plant room and the subsoil beneath. These were then sold on to third parties. The Court of Appeal found that the leases were susceptible to acquisition by the nominee purchaser under Leasehold Reform Housing and Urban Development Act 1993.
Cookson v Assethold Ltd [2020] UKUT 0115 (LC) is also worth closer attention and a case commentary will appear in next month’s Technical Update.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
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Talking points
Why COVID-19 won’t kill the property market
Housebuyers have allegedly put £82bn of property purposes on hold but despite the immediate impact of the Coronavirus pandemic on the UK housing market, Jamie Johnson suggests there is cause for optimism. Here’s why.
COVID-19 has many investors worried, including those involved in the financial markets. But even with the majority of transactional activity at a standstill, there are still plenty of reasons to be optimistic about the long-term performance of the UK property market. As a tangible, safe haven asset, it is important to be optimistic about its market trajectory. Indeed, I believe the surge of interest and activity witnessed at the beginning of 2020 has not dissipated, but simply been placed on pause. Here’s why…
2020 Property Boom
Since the EU referendum result was announced in June 2016, the rate of UK house price growth has stagnated, particularly in London. Fearing a financial loss incurred through a currency fluctuation or price collapse mid-transaction, many held off placing their properties on the market.
The election of Boris Johnson’s Conservative majority government, however, put those fears to rest. With a Brexit deal signed off and a majority government prepared to push it through – the property market looked like it was ready to enter a period of great renewal come February 2020. Housing Price Indexes (HPIs) for March 2020 released by both Halifax and Nationwide showed that house prices were, on average, 3% higher than they were the same time the year prior.
The UK in lockdown
These HPI figures are emblematic of the ever-growing demand for housing. Successive governments have attempted to facilitate a huge growth in property supply, but they have been hampered by a lack of coherent policy and, more recently, the aforementioned Brexit uncertainty. The imbalance between demand and supply means that house prices are naturally geared to grow
As Britain acclimatises to COVID-19’s social distancing measures, I believe demand for real estate will not dissipate. A rush of new buyers and sellers, then, can be expected as soon as the COVID-19 pandemic has ended, and the 2020 property market can once again facilitate new transactions. Savills agree with such a forecast, having re-affirmed their 2019 prediction of a 15% increase in average UK property by 2024, even as COVID-19 puts an end to all but the most completed transactions.
We will have to wait and see what next month’s HPIs tell us about the immediate impact of the virus on property prices. But in terms of investors and homeowners’ expectations of long-term returns, there’s little chance of 2020’s property revival being delayed any longer than is absolutely necessary.
Jamie Johnson is the CEO and Co-founder of FJP Investment.
Property management COVID-19 conundrums
The COVID-19 outbreak has raised a number of questions for property managers that keep cropping up. Here are a few that we’ve come across this month.
Service charge holiday requests
While homeowners who find themselves in financial difficulty due to the lockdown are entitled to mortgage holidays from lenders and tenants are trying to come to arrangements with their landlords over rent arrears, it’s understandable that leaseholders may think they are entitled to a service charge holiday. Property managers are reporting enquiries along these lines from some flat owners in the blocks they manage but what leaseholders may not understand is that service charges are entirely different to mortgage and rent payments.
During the current lockdown, with people spending all day at home, ensuring blocks are well-maintained, clean and safe is more important than ever before – and in order for leaseholders to receive those services, they must pay their service charge.
IRPM member Bernie Wales points out that the terms of a lease remain the same, despite COVID-19. “Lockdown restrictions may have made some of the usual services impossible but some may have had to be increased, for example cleaning of lifts, communal doors and handrails, etc. This means that some itemised headings in the service charge accounts may show reduced expenditure and some may have increased. These will be totalled in the annual service charge accounts at the end of the financial year. But the terms of the lease continue to apply to the leaseholder, so service charge demands will continue to be sent out and they must still be paid,” he says. Ultimately, the building still needs to be insured and safety-critical systems such as lifts need to be maintained regardless of the COVID-19 outbreak.
While landlords and property managers are still entitled to take legal action if leaseholders fail to pay, there is the practical consideration of delays in courts and the rather more Covid-crisis-friendly approach; IRPM advises that if a leaseholder suddenly stops paying their service charge, property managers try and find out, for example, whether that person has been made redundant, has been furloughed, or if there is some other reason their income has changed.
Where there are genuine reasons for a leaseholder having cash flow problems, managing agents are encouraged to take those circumstances into account and find a mutually agreeable solution before taking legal action – perhaps agreeing a payment plan to take monthly instalments instead of quarterly payments.
Dealing with contractors on-site
The Government has stated that buildings must be maintained and essential major works, such as leaking roofs or dangerous structural issues, must go ahead. Contractors can attend blocks as planned but must follow social distancing rules as far as possible. All non-essential works should be postponed, with delays discussed and agreed with residents.
However, these guidelines are open to interpretation and the Government has not indicated which works are essential and which are not. Property managers are having to be even more diplomatic than usual to keep tensions to a minimum.
Two key learnings here are:
- That clear communications and ongoing dialogue with residents is helpful to demonstrate managers are actively managing the building and working in compliance with PHE guidance to keep buildings safe and clean; and
- Unless the HSE has granted dispensation, all previous H&S requirements remain in force. But going further, it is accepted that every process carried out at a building by a contractor or member of staff needs to be risk assessed.
During the COVID-19 crisis, all those risk assessments need to be looked at again to take account of the new risk of working under the shadow of COVID-19 and in compliance with PHE guidance
How do I work with virtual tech?
Speaking to property managers in the last few weeks it’s clear that for many members, despite the lockdown, it really is business as usual. Many businesses already had the technology in place to allow staff to easily work from home and their teams have quickly adapted to video conferencing, E-signing of documents and even online training.
Others though are finding it more challenging. One question that is frequently being asked is how they will hold their AGMs?
Virtual meetings with residents are easy to set up using Zoom. Simply download the App and follow the instructions. For anyone who hasn’t tried it yet, here’s how it works:
- Invite residents to the virtual AGM
- Residents click on the link included with their invitation
- Residents enter a ‘virtual room’ (with or without video) where other participants will be waiting along with the moderator.
- Residents join the meeting in ‘muted mode’ but they can participate at any time by raising their 'virtual hand' enabling the moderator to unmute them while they speak.
Here’s the link to find out more, watch some ‘how-to’ videos and try it for yourself.
There have been reports of security issues with Zoom, which has upgraded its security measures recently. So it is worth studying the recommended procedures to keep your meetings as secure as possible.
Property managers working in the lettings sector, or which have estate agency divisions are also rapidly adapting to virtual viewings for tenants and potential buyers. James Ackrill, Chairman at Centrick says COVID-19 has given the company the push it needed to extend its service and make personal virtual viewings across its portfolio. “We anticipated lockdown a few weeks prior and knew that, whilst thrown into uncertainty, there would likely still be demand for house moves. Especially those of key workers whose circumstances meant that they needed to be closer to work or away from families, to keep vulnerable members safe,” he says.
Now video walkthrough tours are hosted on Centrick’s website and major property portals; however, prospective tenants and buyers are also able to book a bespoke live video viewing, where they are guided virtually through the property, using WhatsApp or FaceTime, answering any questions in real-time that they might have.
Sam Hay at Manchester-based lettings agency Life By Ringley says the way in which her team is conducting viewings now compared to just three weeks ago is on another level “Our videos are now more like 3D virtual tours and that means we’re able to let properties in a traditional manner, but much more quickly. The virtual process means that we have eliminated the need to travel to and from the property and decisions can be made in an instant. This in turn moves along the applications and the move-in process much more swiftly,” she says.
The upturn in use of this kind of technology bodes well for the future as far as Sam is concerned. “We truly believe that virtual viewings are the way forward for renters and it is something that we will be taking very seriously in the future and investing both time and money to perfect”, she adds.
Topic of the month
Recruiting in a crisis - and at a distance
Zoe Southwell assesses the impact of COVID-19 on the recruitment market, looks at the way the hiring process has changed in just a few weeks and shares some consultative advice so you can continue to hire top talent for your Block Management teams.
The Coronavirus outbreak has caused us all to evolve and adapt in many ways. We’ve been left with uncertainty, a lot of questions and we’ve been speaking to clients who are curious to know how this will impact their ability to hire. Not all employers are in a position to put recruitment on hold – in fact some are using this as their chance to have their pick of the strongest candidates in the market.
What’s happening in the market?
During the first week of lockdown, we saw recruitment take a back seat, as expected. While people were navigating through their new home working set-up, ensuring their teams were fully functioning and reading up on any changes to the industry, we saw close to 50% of the employers we were working with freeze their recruitment, while others remained sceptical. Candidates were still actively looking and had a lot of questions around how the process would now work and whether employers would still be prepared to interview them.
A month later, we’ve seen recruitment pick up. Employers have realised that as we face a time where nobody knows when we’re likely to be going back to ‘normal’, they need to evolve and work with the climate rather than against it. We’re working on property manager and senior management roles across the UK at present and with hiring managers having more time to work even more closely with us, we’ve built a stronger rapport with clients. We’re working in true partnership which is where we see the best results and retention rates. Candidates are more active than they have been all year with more time to dedicate to their job search and interview at short notice, and with many being furloughed, we’ve seen new candidates join the active marketplace.
How can you use this opportunity to continue to recruit?
The first, most important thing to consider is what it is you’re really looking for. Identify the skills gap in your business and the attributes that would make this person successful. A useful exercise is to highlight someone in the business that is doing well and adds value to your business, an ‘avatar employee’ if you like, and look at what it is that makes you think that – both behavioural and skill based. Then, build out interview questions and testing criteria to check whether prospective candidates have the potential to be just as good.
You then need to check in with yourself to make sure you’re prepared to hire without meeting a candidate face to face. You wouldn’t want to waste your time or theirs, nor would you want to impact your employer brand by providing a negative candidate experience.
It’s time to evolve and make technology your friend. You may want to remain open-minded when recruiting for your team over the next few months and test whether different methods of hiring could work for you. They may turn out to be more effective than your current methods of recruiting. You may even find that you want to continue to use these even when we come out the other side.
Telephone Interviews
A lot of employers already use telephone interviews as part of their hiring process. You could look to have initial conversations with potential candidates over the phone. You’ll still be able to identify whether candidates have the suitable experience and skill set for the position you’re recruiting for. You’re also still able to gauge their character. Ensure you’re asking the right questions in order to gain the information you’re looking for.
Video Interviews
If you prefer to “see” candidates when interviewing, you could hold a video interview. You could look to hold these through Zoom Meetings (profile test online.
How you decide to conduct interviews and manage your hiring process moving forward will speak volumes for your employer branding. It’s a great opportunity to create a standout hiring process. You may find yourselves outside of your comfort zone when adopting new methods of recruitment and they say this is where you learn most. Bring awareness to how well these new methods of recruiting compare to what you’ve historically implemented and whether you’ve achieved better results.
You can still hire a candidate that meets your requirements and is the right cultural fit for your company without meeting them in person. If you remain open-minded and solutions-focused, you won’t have any problems with recruiting.
Onboarding
You’ve hired! Your new employee is set to start. How can you onboard them? Preparation is key. If you have company laptops, phones, etc. that your new employee will be using, you’ll need to ensure that you have these posted and received by their start date. Delivery companies are still operating, you may just choose to allow for more time for these to reach your new team member.
Something useful to remember is that it’s ok for this to be a new experience, for both you and your new team member. I’ve spoken to a few clients that actually found it an exciting, new way of onboarding that they’d use again for remote workers even after COVID-19. The more curiosity you bring to learning how to adapt your process, the more effectively you’ll onboard. Here are some things you may want to think about.
- Channel employee engagement even before they start. Perhaps you could send a welcome pack, with branded goods. You could include your new employee in company updates and news, sharing positive things that are happening within the business to make them feel included and at ease ahead of their start date knowing the company is doing well. It’s also a great way to introduce them to your company culture.
- Check in the week before they start. Ensure what you’ve posted has arrived, they have access to everything they need and give reassurance. You can share tips and experiences for positive, productive home working that they may find useful. You might want to bring awareness to the language you use and keep the experience positive. If you make a note to stick to positive talk only, it’s likely to be a more engaging, fun process for all. Hold a video call on the morning of their first day, share your screen with them to show them around the new systems. There are so many ways you can talk through systems and processes online, similar to how you would in an office.
- On their first day, host a video call, ask your team to be in on the call and to introduce themselves. You could even prepare a few fun questions and get to know each other better over the call. A great way to feel connected.
- Use a buddy system, which some already do! Whilst also providing check in points as a Manager, you could pair your new employee with an existing one, they could even have lunch together virtually on the first day!
- Check in regularly and remain open for support. Starting a new job can be a daunting time for some, by remaining in contact with your new employee who may feel reluctant to call with questions, you will certainly put them at ease.
As a lot of employers already are, look at new ways to keep your team engaged, connected and keep morale high. This is more likely to make it a positive experience for your new employee and your existing team too. Some of our ideas can be found here.
If you used a recruitment agent to help find your new employee, you could speak to them about their aftercare plans. We have developed a full process dedicated to candidate and client aftercare which includes regular check-ins, offering support and consultative advice. Your recruiter could be very useful at this point. We want you to keep this person engaged and retain them long term, and having that extra level of support for both you and your newly-employed team member may be more helpful now than ever.
What does the future hold for recruitment in the block management sector?
This pandemic won’t last forever. We will come out the other side and our businesses will be stronger for it. As we’ve said, you may discover new ways of recruiting staff and keeping your employees engaged that you wouldn’t have discovered if it wasn’t for this shift in normality.
Throughout all of this, we have been given the gift of time - something which many of us often don't have to spare. So this may be the perfect time to reflect, evaluate and build. Identify potential skill gaps within your business, forward plan, think about your ‘avatar employee’ and how you could perhaps better communicate that criteria to an agent or direct to the marketplace to improve your recruitment and retention success rates. Build on your employer branding by being innovative market leaders in a time of uncertainty. Be the company people remember after this. It’s an opportunity to stand out and be different, challenging your existing processes and improving as a result – and this includes your recruitment process.
When we come out the other side, we predict a boom in recruitment. Blocks still need to be managed and developers are likely to push for completion. You’re going to need the right people in your business to survive. You’ve been given the perfect opportunity to find them and have them ready for when that happens. All you need to do is use the time you have available now and take action.
Zoe Southwell is Client Development Manager at Block Recruit
Good reads
Commercial real estate must do more than merely adapt to coronavirus
Download this insightful report from McKinsey here.
The Digital Transformation Diet
A highly readable account of how best to engage with transformation within your organisation. Click here for more.
Collaboration at work without an office
Something for the future? Click through the links in this article to read more on this fascinating topic.
Top 5 practical tips for Property Managers amidst the ongoing Covid-19 Pandemic
We could all do with a little help right now. Read Natasha Lawson’s top tips from JPC Law here.
Wellbeing in Block Management
A round table discussion hosted by Block Recruit is central to this White Paper which looks at the pressures faced in the workplace by property management teams and what employers can do to support their staff. Download it here.
