Technical Update - June 2018 - TPI Update

The month in brief

Welcome to the latest issue of Technical Update. The big news this month is, of course, the final Hackitt report reviewing the building regulations and fire safety in the wake of last June’s tragic Grenfell Tower fire. Dame Judith Hackitt has called for a complete overhaul of the regulatory system around the safety of buildings but stopped short of calling for a total ban on combustible cladding. This issue is now being dealt with separately by government.

For the IRPM, the main event in May was the sell-out annual seminar which looked at a wide range of hot topics including:training and retaining staff; economic trends impacting on property; lessons from Grenfell; and domestic violence. Unsurprisingly our Topic of the Month in this issue is fire safety - and specifically how to better manage faults on fire alarm systems.

We also look at the latest news on dangerous cladding; report on the recent Resi Awards and the call for a new inquiry into leasehold; round up the latest HR and health & safety issues; and provide our regular Legal Update from Mark Loveday.

A big thank you is due to John Mills who has worked tirelessly as the Editor of this Technical Update for many years. He has now passed the mantle to Lesley Davis who many of you will know as the former Editor of Flat Living.

And finally, if you have a comment or an opinion to share, why not join the [email protected] with title "IRPM Update Idea - FAO Marketing"

IRPM news
Andrew Bulmer, IRPM CEO | Property managers pack Park Plaza for sell-out seminar | Bob Keats Scholarship announced

In the press
Government to fully fund replacement of dangerous cladding | Consultation on cladding ban to go ahead | MP calls for Select Committee Inquiry Into leasehold | RICS research flags low quality of office-to-resi homes | MPs back ‘build-to-rent’ housing sector says BPF | 2018 Tall Buildings Survey published | Helen Gordon is Resi Personality of the Year

What’s new in HR?
Take part in the National Mental Health at Work Survey 2018 | Managing sick leave | Need help with employment issues?

Social Housing
Mayor pledges new council homes for London | Better social housing access for domestic abuse victims | Housing Associations pledge to tackle domestic violence

Fire safety
Hackitt Review issues final report | Fire safety campaign launched

Health and safety
Two companies fined for risky asbestos removal

News from Scotland and Wales
Energy-assessed mortgages for Welsh first-time buyers | Regulation of Registered Social Landlords (Wales) Bill Stage 4 | £3.5m fund to boost energy efficiency | Tenement maintenance one step closer for Scotland | Delivering more homes for Scotland

PRS and B2R
Government pledges to consult on longer private tenancies | Renters would pay more for pets | Exemptions for landlords on energy efficiency

Legislation
Revised EPBD will come into UK law – probably | Government Publishes Tenant Fees Bill

Legal update
Corvan (Properties) Ltd v Abdel-Mahmoud | This month’s must-read cases

Talking points
Let’s stop hiding behind the lease | Do block managers have a part to play in tackling domestic abuse?

Topic of the month – finding fault
What should you do if your alarm system is in fault? Don’t ignore the problem – new solutions are available, says Bradley Parker

Events
This month’s CPD events

IRPM News

Change is coming, ready or not

Change is coming, ready or not, was the theme of our annual seminar in May (see below for details). Like it or not, our industry is at the top of a rollercoaster and we’re about to have the ride of our industry’s lifetime. And when the ride stops, we could all find ourselves in a much better place – hopefully.

The leasehold / block and build-to-rent sectors are set for massive changes; of law, of safety, of customer focus, of ethics and behaviours. Uncertainty makes us nervous but we really need to embrace it if we are to grab with both hands the opportunities these things present.

For years all of us at the IRPM have been calling on government to get rid of the cowboys and level the playing field. At last the signs are positive for smart, ethical agents. This of course assumes the new Secretary of State for Housing James Brokenshire MP, doesn't decide to de-rail the mandating of regulation and qualifications so strongly supported by his predecessor. In our post-Grenfell, post toxic-leasehold scandal, digitally connected, consumer-driven world that would be “a very courageous decision Minister”.

However, we must all be clear that Darwinian principles will apply. Old school agents who don’t adapt and evolve, who don’t value their customers and their own people will ultimately perish – and that’s no bad thing.

Your professional body is changing too. Delivering thought leadership, improved learning materials, broader syllabi and more in order to prepare our professionals so they don’t simply survive the challenges but positively thrive on them. Together we are on a journey to a safer, kinder, more professional and more rewarding place. Five years from now we will look back and wonder why we didn’t start sooner.

Andrew Bulmer, IRPM CEO

Andrew was recently interviewed by Brady Solicitors about his role and the future of the IRPM as he sees it. Read the interview in full here.

Property managers pack Park Plaza for sell-out seminar

The IRPM’s 15th annual seminar was a sell-out success in May, as 500 property managers packed the conference centre at the Park Plaza in Victoria. With attendance up by 30% on 2017, the theme of the day, Change is coming, ready or not, provided delegates with a wide-ranging and thought-provoking programme.

Our host for the day was former joint-CEO Jeff Platt. In his opening remarks, Jeff paid tribute to all those affected by the Grenfell tragedy which occurred almost exactly a year prior to the event.

Next up was current CEO Andrew Bulmer, who identified three key trends in the industry: the rise of customer power; ethics and behaviours; and safety. The IRPM is working closely with government focusing strongly on these themes as well as on technical competence which is at the heart of everything we do. Each of these aspects of our professional lives plays a direct role in the evolution of the residential management sector and they featured heavily throughout the day.

In the press

Government to fully fund replacement of dangerous cladding

Following considerable uncertainty in the wake of last June’s fire at Grenfell Tower, the Prime Minister announced in May that the government will fully fund the removal and replacement of dangerous cladding for councils and housing associations.

Responding to a question at PMQs, Theresa May said the issue of who pays for cladding works must not undermine the ability of social housing providers to do important maintenance and repair work.

According to Inside Housing, nationally, there are 317 towers known to have aluminium composite, of which 304 towers need the cladding removed. Councils and housing associations own 158 of these, with removal work having begun on 104 and completed on just seven. The government anticipates that removal and replacement works will cost around £400M.

However, the question of what will become of at least 132 private sector buildings where dangerous cladding has been identified remains unanswered. At present leaseholders in private blocks face huge bills to fund cladding works. Barrett Homes has offered to pay for removal and replacement of flammable cladding at one of its developments in Croydon and Mayors Andy Burnham and Sadiq Khan have both called on the government to fund the costs of removing cladding from private blocks.

Consultation on cladding ban to go ahead

The government announced it is to consult on banning inflammable cladding, hours after the Hackitt review failed to recommend such a move. Housing Secretary James Brokenshire announced the plan "having listened carefully" to others on the issue. Architects, building firms and Grenfell survivors have all backed a ban on using combustible materials in tower blocks.

MP calls for Select Committee Inquiry Into leasehold

The MP for Ellesmere Port & Neston in Cheshire and Shadow Minister for Health, Justin Madders, is calling for a Select Committee inquiry into what he describes as “the leasehold scandal”. In a recent blog for HuffPost, he says many people have discovered they were misled about what they were signing up to, didn’t know they were buying a leasehold property and didn’t know about the “outrageous charges that can be found in these leases which make them so toxic as to render the property unsellable”.

As a result, Madders and a group of other MPs are calling on the Housing, Communities and Local Government Committee to begin an inquiry into leasehold.

RICS research flags low quality of office-to-resi homes

The RICS has warned the government that extending its controversial policy of allowing office-to-residential conversions without the need for full planning permission could result in a higher amount of low-quality housing (Source: Building). The surveyors’ body said despite housing delivery being high on politicians’ agenda the implications of extending the policy of allowing conversions through the use of permitted-development rights needed to be looked at carefully.

In a new report, co-authored with academics from UCL and Sheffield University, RICS said relaxations of the rules which began under the coalition government had resulted in a higher level of poor quality housing than was the case when full planning permission was required.

MPs back ‘build-to-rent’ housing sector says BPF

The British Property Federation (BPF) has published research that shows 75% of MPs support build-to-rent and its contribution to UK housing supply.

The research, undertaken by ComRes on behalf of the BPF, also highlights that the majority of Conservative and Labour MPs believe build-to-rent will make a higher contribution, than it currently does, to housing supply over the next five years.

Build-to-rent was the only housing option tested in the research that secured this confidence from a majority of MPs from both major parties.

2018 Tall Buildings Survey published

The NLA's fifth Tall Buildings Survey 2018, with research partners GL Hearn, and data provided by EG, is annual report that provides the only comprehensive analysis of all tall buildings, over 20 storeys, which are proposed, in planning or under construction in London.

Subscribe to the NLA’s free newsletter to receive a copy of the report.

Helen Gordon is Resi Personality of the Year

Grainger chief executive Helen Gordon was named personality of the year at the 2018 Resi Awards held in May. Since taking on the role of chief executive in 2015, Gordon has helped to transform Grainger into a BTR juggernaut. Over the last two-years the company has invested more than £650m in the sector, buying up new and existing assets as well as developing its own schemes. Her plans have been well received by the market with shares in the FTSE 250 business rising by about a quarter since she unveiled the businesses’ new strategic focus in early 2016. Gordon’s career has spanned more than 35 years and seen her work for large organisations, such as RBS, Legal & General and Railtrack. She is currently a board member of the European Public Real Estate Association and is the junior vice president of the BPF.

The Ringley Group was named Property Manager of the Year.

What's new in HR?

Take part in the National Mental Health at Work Survey 2018

Mental ill-health is one of the biggest public health challenges we face. And yet it is still much harder for most of us to talk about our mental, rather than our physical, health and this is no different in the workplace. Mental Health Awareness Week is therefore a crucial opportunity to open up the conversation about mental health at work.

We need to understand and learn from people’s experiences of mental health at work, so that we can build more inclusive and supportive workplaces. The Chartered Institute of Personnel Development (CIPD) is a partner of Business in the Community's National Mental Health at Work Survey 2018 and is working in conjunction with Mercer and national partners Mind, Mental Health First Aid, Mental Health at Work, OUTstanding, The Work Foundation and ILM, to ensure that employers are supporting employees with their mental health

Thousands took part in the 2016 and 2017 surveys and your help is needed to make 2018 the biggest yet. Anyone who is employed or self-employed in the UK and over the age of 16 can complete the survey and share their experiences.

Managing sick leave

Do you have any questions about statutory sick pay or managing sick leave for your staff? HMRC’s free webinar, hosted jointly with ACAS (Advisory, Conciliation and Arbitration Service) can help answer them.

HMRC and ACAS – Managing Sick Leave and Pay, Tuesday 12 June – 3-4pm

There will be a brief summary of Statutory Sick Pay entitlement. Also, how to manage sick leave and the impact it has on employment relations in the workplace.

Need help with employment issues?

For help at a time that suits you, visit the Help and Support for employing people page on GOV.UK, you’ll find an excellent resource of live and recorded webinars, online guides and YouTube videos to support you in employing your staff.

Social Housing

Mayor pledges new council homes for London

London Mayor Sadiq Khan has pledged to build 10,000 new council homes in the Capital over the next four years.

The Mayor of London will use funds from a £1.67bn pot he secured from the government in its spring statement, to increase the number of affordable homes for rent in the capital. In future, London councils will be able to bid for grant funding at a special rate, allowing them to offer new homes based on social rent levels more easily.

Better social housing access for domestic abuse victims

The government has launched a consultation on new guidance for councils on how to help victims of domestic abuse access social housing. Under the guidance, local authorities would be told to prioritise domestic abuse victims in refuges for social housing. It also stresses that victims who have fled to other parts of the country to escape abuse should not be disadvantaged by allocations systems, building on advice in the existing guidelines.

Housing Associations pledge to tackle domestic violence

The ‘Make a Stand’ pledge has been developed by CIH in partnership with Women’s Aid and the Domestic Abuse Housing Alliance (DAHA) – made up of Standing Together Against Domestic Violence, Peabody and Gentoo. As part of the pledge, housing associations can make four commitments to support people who live and work in housing who are experiencing domestic abuse.

These four commitments are:

•    To put in place and embed a policy to support residents who are experiencing domestic abuse
•    To make information about national and local domestic abuse support services available on your website and in other places which are easily accessible to residents and staff
•    To put in place a HR policy and procedure on domestic abuse, or to incorporate this into an existing policy, to support members of staff who are experiencing domestic abuse
•    Appoint a champion in your organisation to own the activity you are doing to support people experiencing domestic abuse

To find out what you could do in the blocks you manage to raise awareness of this issue, go to DAHA at dahalliance.org.uk

Fire safety

Hackitt Review issues final report

Dame Judith Hackitt has been carrying out a review of the Building Regulations, with particular emphasis on the safety of residents in residential buildings (source: Inside Housing). In her final report, published in May, she concludes that the existing regulations and guidance are not always read and are often misunderstood and misinterpreted. The primary motivation of many in the industry is to do things as quickly and cheaply as possible, rather than to deliver quality homes. Where concerns are raised, whether by workers or residents, they are ignored.

Dame Judith recommends a new regulatory framework with greater focus on “buildings as a system” and greater transparency of decision-making. There must be a “no risk” route for redress for residents who should be encouraged actively to participate in the ongoing safety of the building. Regulation should be overseen by a new Joint Competent Authority comprising the local authority, fire service and the Health and Safety Executive (HSE). The full report can be downloaded here.

In response to the Grenfell Tower fire NHBC, which says it carries out building control services for 80% of new homes built, has changed its policy to stop accepting so-called ‘desktop studies’ for cladding. Such studies allow manufacturers to take data from previous tests on cladding and use them to determine how a new, untested, cladding system would react to fire. These have been called into question since the Grenfell Tower fire and the government is consulting on whether desktop studies should be banned completely.

Fire safety campaign launched

Inside Housing has launched a campaign to improve fire safety following the Grenfell Tower fire. The magazine’s Never Again campaign calls for immediate action to implement the lessons learned from the Lakanal House fire in 2009, and a commitment to act – without delay – on learning from the Grenfell Tower tragedy as it becomes available.

Landlords are called on to:

•    Take immediate action to check cladding and external panels on tower blocks and take prompt, appropriate action to remedy any problems
•    Update risk assessments using an appropriate, qualified expert.
•    Commit to renewing assessments annually and after major repair or cladding work is carried out
•    Review and update evacuation policies and ‘stay put’ advice in light of risk assessments, and communicate clearly to residents

Government is asked to:

•    Provide urgent advice on the installation and upkeep of external insulation.
•    Update and clarify building regulations immediately – with a commitment to update if additional learning emerges at a later date from the Grenfell inquiry.
•    Fund the retrofitting of sprinkler systems in all tower blocks across the UK (except where there are specific structural reasons not to do so).

Click here for more on this campaign.

Health and safety

Two companies fined for risky asbestos removal

A residential property management company and a specialist installation contractor have been fined after a resident raised concerns about soffit replacement work carried out on the guttering on three blocks of flats in London.

Westminster Magistrates’ Court heard that in July 2016, Squaredeal UPVC & Renewables Limited of Rustington, West Sussex had been contracted by Wildheart Residential Management Limited of Ewell, Epsom, Surrey to replace the soffits on the blocks in a housing estate at Sutton Grove, Sutton, London. An investigation by the Health and Safety Executive (HSE) found that Wildheart instructed Squaredeal to carry out the work, but failed to check whether the soffits contained asbestos. Squaredeal had the soffits analysed and became aware they contained asbestos but started to remove the soffits without adequate precautions to ensure workers and residents were protected.

Squaredeal UPVC & Renewables Limited was fined a total of £18,500, and ordered to pay £5,607.90 in costs after pleading guilty to offences under Regulations 5, 8(1) and 11(1) of the Control of Asbestos Regulations 2012. Wildheart Residential Management Limited was fined £8,000, and ordered to pay £3000 in costs after pleading guilty to an offence under Regulation 4(3) of the Control of Asbestos Regulations 2012.

According to the HSE , “The work risked not only the workers, but also the residents of the flats being exposed to disturbed asbestos. Exposure to asbestos can lead to a number of diseases, including asbestosis or fibrosis (scarring) of the lungs; lung cancer and mesothelioma. These diseases are irreversible, disabling and in most cases eventually fatal.

“This incident could have been avoided if the companies had taken appropriate action to identify the type of asbestos and engage an appropriately qualified contractor to carry out the work safely.”

News from Scotland and Wales

Energy-assessed mortgages for Welsh first-time buyers

Wales will be the first country to adopt pioneering mortgage research into legislation, with first-time buyers expected to reap the benefits. Starting this month, all Welsh Help-To-Buy loans will be adjusted according to the energy rating of the home being purchased. This will mean that those purchasing the most energy-efficient homes may be offered a larger loan as a consequence of their smaller anticipated energy bills. The change has been implemented based on research by the LENDERS partnership which was published in July 2017.

The LENDERS research successfully demonstrated and modelled the link between energy efficiency and household fuel bills, and created a new consumer calculator (www.epcmortgage.org.uk) to showcase the cost benefits of purchasing an energy-efficient property.

The Welsh Government will be the first to put the research into action following the study’s inclusion in the BEIS UK Clean Growth Strategy, marking the first step towards the significant changes that the LENDERS findings will create in the mortgage industry. Loans will be administered by the Development Bank of Wales.

Regulation of Registered Social Landlords (Wales) Bill Stage 4

The National Assembly for Wales is considering a Bill to amend the way in which Registered Social Landlords are regulated in Wales. The Bill contains proposals to limit local authorities’ powers in respect of the membership of the board of an RSL and the exercise of voting rights, as well as reforms to liberalise the powers of RSLs to dispose of land without the prior consent of the Welsh Ministers. Details are available on the National Assembly for Wales website.

£3.5m fund to boost energy efficiency

Social housing landlords in Scotland will soon be able to make their properties more energy efficient, with money from a £3.5 million decarbonisation fund. Local authorities and housing associations will be able to use the fund on projects that improve energy efficiency and decarbonise heating, for example when installing solar panels or air source heat pumps.

Announcing the fund ahead of a Scottish Parliament debate, Housing Minister Kevin Stewart said: “This is part of more than £5 million of additional funding to support the Energy Efficient Scotland: Transition Programme, which will continue to provide a mix of advice, grant and low cost loans to support property owners over the next two years.”

Funding will be available to Local Authority and Housing Association landlords across 2018/19 and 2019/20. The majority will be front-loaded, requiring spend in the current financial year 2018/19.

Tenement maintenance one step closer for Scotland

Action on compulsory tenement maintenance in Scotland took a closer step last week as parliament agreed, following a vote, to review existing legislation and consider the implementation of mandatory tenement health checks. Tenement properties make up a quarter of all domestic dwellings in Scotland and according to the Scottish Housing Condition Survey, many need extensive, urgent and critical repairs. However, for numerous reasons, tenement maintenance is not undertaken at a time and place when it is needed most.

To tackle this problem, the RICS has proposed measures to encourage, and if necessary compel, common owners to have building condition surveys undertaken every five years. The initiative was kick-started by RICS in November 2017 at a parliamentary reception, and a debate on the issue in January followed a motion on the issue lodged by SNP MSP Ben Macpherson. This motion received cross party support, with all political parties agreeing that action to urge, assist and even compel tenement property owners to repair and maintain their property was required.

Delivering more homes for Scotland

Homes for Scotland (HFS) has published a discussion paper on the actions required to meet the country’s housing need and demand.

Covering a wide range of areas from developer finance to skills and industry capacity, as well as topical issues such as the planning system, infrastructure and perceptions of home building, this is a position HFS is seeking to change through its new discussion paper Delivering More Homes for Scotland: barriers and solutions which can be downloaded here.

The paper is launched as the Planning Bill currently makes its way through parliament and as the Scottish Land Commission (SLC) is exploring options for land reform. Solutions proposed by HFS include meaningful support for small-scale home builders to increase industry capacity, the exploration of options for a new town-type model for large-scale housing delivery and ensuring that the planning system is collaborative, fully-resourced and able to deliver decisions quickly.

PRS and B2R

Government pledges to consult on longer private tenancies

The government has announced that it is to formally consult on proposals for longer tenancies in the private rental sector. Although there has been much debate about the issue, with government and opposition politicians calling for longer tenancies - with industry bodies often in agreement - there has not until now been a formal position put forward by government. However, the Housing Secretary, James Brokenshire, has said in the Commons: “We will shortly consult on options to support landlords to offer longer tenancies to those who want them.”

Renters would pay more for pets

Tenants are often willing to pay more to add something special to a rental property, whether it is a garden or greater storage. But what incentives do tenants find most attractive?

A recent survey carried out by LSL Property Services, polling more than 3,000 tenants (source: Landlord Today), has found the most popular ‘perk’ among renters would be for pets to be permitted, with 28% willing to pay an average of £24 more per month to have their furry friends stay with them in their rented accommodation. High-speed internet was also a priority, with 21% of tenants saying they would be happy to pay an average of £19 extra each month for it.

At the other end of the scale, a concierge service is of least interest, with just 3% prepared to pay an additional £20. Slightly above, 4% of renters would spend £12 a month to have storage space specifically for their bikes.

Exemptions for landlords on energy efficiency

The Government has unveiled guidance on how landlords can get exemptions to new rules on minimum energy efficiency on rental properties. (Source: Property Industry Eye) Since April, any new tenancies established must have a minimum energy performance rating of E, with the measure being extended to existing lets from April 2020. But the Government has now outlined several exemptions where properties cannot be improved to meet the minimum standard of EPC band E.

A landlord can register an exemption if they have been unable to access relevant ‘no cost’ funding to fully cover the cost of installing a recommended improvement either from a Green Deal scheme, energy supplier or local authority.

The requirement to meet the minimum level of energy efficiency also does not apply where a landlord has made all the ‘relevant energy efficiency improvements’ – anything recommended by a surveyor or Green Deal provider such as insulation and replacement glazing – that can be made or there are none that can be made, and the property still remains below EPC E. There is also a special provision for circumstances in which cavity wall insulation, external wall insulation systems, and internal wall insulation systems should not be installed such as where it would have a negative impact on the fabric or structure of the property.

The Exemptions Register is available for the public to search, and landlords can self-certify their own exemption, which will be monitored by local authorities.

Legislation

Revised EPBD will come into UK law - probably

The Council of the European Union has announced agreement on the final version of the revised Energy Performance of Buildings Directive (EPBD). The EPBD will enter into force 20 days after publication in the Official Journal. Member states will have 20 months to transpose the new elements into national law.

If publication in the Official Journal occurs in the next couple of months and a Withdrawal Agreement is subsequently formally agreed, with at least a transition period to end 2020, the implementation date of the EPBD should fall within the relevant period prior to Brexit and therefore the UK should implement the requirements into domestic law.

Government publishes Tenant Fees Bill

The Government published its Tenant Fees Bill on 2 May, which will ban all letting and agents fees charged to tenants by agents and landlords in England. The Government first announced in that they would ban letting agents’ fees in the Autumn Statement 2016. From April to June 2017 the Government held a consultation on introducing a ban on letting agent fees paid by tenants which received over 4,700 responses.

The main measures contained in the Tenant Fees Bill will:

•    Cap holding deposits at no more than one week’s rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
•    Cap the amount that can be charged for a change to tenancy at £50 unless the landlord demonstrates that greater costs were incurred
•    Create a financial penalty with a fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the last 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
•    Require Trading Standards to enforce the ban and to make provision for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
•    Prevent landlords from recovering possession of their property via the section 21 Housing Act 1988 procedure until they have repaid any unlawfully charged fees
•    Enable the appointment of a lead enforcement authority in the lettings sector
•    Amend the Consumer Rights Act 2015 to specify that the letting agent transparency requirements should apply to property portals such as Rightmove and Zoopla
•    Local authorities will be able to retain the money raised through financial penalties with this money reserved for future local housing enforcement
Alongside rent and deposits, agents and landlords will only be permitted to charge tenants fees associated with:
•    A change or early termination of a tenancy when requested by the tenant
•    Utilities, communication services and Council Tax
•    Payments arising from a default by the tenant such as replacing lost key.

The new measures are subject to Parliamentary timetables and will be introduced in law next year. For more on the Bill click here.

Legal update

Corvan (Properties) Ltd v Abdel-Mahmoud

Mark Loveday reports on an important case with implications for property managers and the way in which QLTAs are set up

The July 2017 issue of Technical Update covered the Upper Tribunal case of Corvan (Properties) Ltd v Abdel-Mahmoud; a case about whether some agency agreements entered into by management firms were Qualifying Long Term Agreements (QLTAs) under section 20 of The Landlord and Tenant Act 1985. If they are QLTAs, you will need to consult with leaseholders about your agency agreements in much the same way as you do for major works. If you fall foul of s.20, the legislation provides that the lessees’ contributions are limited to £100 per flat.

Last year’s decision was appealed, and the Court of Appeal has now given some general guidance about QLTAs: Corvan (Properties) Ltd v Abdel-Mahmoud [2018] EWCA Civ 1102. Corvan involved a block of flats in Maida Vale operated by a managing agent. Clause 5 of the management agreement stated that the contract period “will be for a period of one year... and will continue thereafter until terminated upon three months’ notice”. A QLTA is defined by s.20ZA of the 1985 Act as “an agreement entered into, by or on behalf of a landlord or a superior landlord, for a term of more than twelve months.” The First -tier Tribunal considered the management agreement was for a term of more than 12 months. The Upper Tribunal agreed (but for different reasons). So what does the Court of Appeal have to say about the test?

The Court of Appeal was faced with two questions:

• What was the proper construction of the management agreement; and
• What is the correct interpretation of the s. 20ZA?

On the first issue, McFarlane LI considered that the word “will” in clause 5 was a mandatory requirement that the contract would continue beyond the initial 12 months, without specifying for how long. The tenant therefore won, and the appeal was dismissed.

Although strictly speaking there was no need to consider the second issue, the Court of Appeal gave some useful guidance about s.20ZA. It found the deciding factor was the length of the commitment (i.e. the minimum commitment) laid down by the relevant agreement. If the agreement’s minimum term is less than 12 months, it does not matter that it can be allowed to roll on. McFarlane LJ said that HHJ Gerald had been wrong in Poynders Court v GLS Property Management Ltd [2012] UKUT 339 (LC) to find otherwise. The landlord need only consult its tenants before entering into an agreement which is for a minimum term of more than 12 months. It does not matter if the term could last longer, provided it can be brought to an end before the expiry of a year.

Practical points

Corvan suggests the safest way is to use a fixed annual management agreement. It is possible to use “rolling” contracts, but careful consideration must be given to the wording. It is all too easy - through drafting which has not been properly thought through - to create a term which in reality cannot be terminated at the end of a year. Agents should review their standard management agreements to check for “rolling” clauses – or risk an objection to their charges on the basis that they ought to have consulted the tenants. Failure to comply could result in the recoverable charges being limited to £100 per flat.

Other recent must-read cases include:

Notting Hill Housing Trust v Esan [2018] UKCA, 16 May 2018
Address for service - committal proceedings; costs orders – access to property – held that judge entitled to order an individual to pay the costs of committal proceedings brought by her landlord after she refused to obey an injunction requiring her to give the landlord access to her property.

Charles v Tower-Hamlets [2018] UKUT 0140 (LC), 15 May 2018
Disclosure – tenant wished to challenge service charge on unspecified grounds – landlord ordered to provide evidence to substantiate all costs – landlord provided detailed summary identifying each area of charge and amount claimed together with properly pleaded claim – tenant asserted that disclosure inadequate and failed to identify any area of challenge respond to landlord’s Scott Schedule or file a Statement of Case within time specified by the order or at any time. Ft-T ruled (on two occasions) that disclosure adequate and debarred tenant from defending – held disclosure was sufficient to enable the tenant to file a statement of case and to identify areas of dispute – tenant plainly in breach of directions. Debarring order within the discretion of F-tT with which the Tribunal would not interfere. Appeal dismissed.

Trimnell-Ritchard v Tuffley [2018] UKUT 0150 (LC), 10 May 2018
Sufficiency of reasons – F-tT failing to set out rival evidence – burden of proof – reconsideration of evidence - held tenant in breach of covenant not to maim cut alter wall without consent by making a hole in wall to replace connection to old toilet – appeal allowed.

Prezzo Ltd v High Point Estates Ltd Queen's Bench Division (Technology & Construction Court) 26 April 2018
Insurance - landlords' duties. Held that on the true construction of a lease, a landlord's obligation to obtain insurance on behalf of itself and the tenant only extended to the part of the building occupied by the tenant, not to the whole building. The tenant had the benefit of the insurance in respect of a fire that had damaged the part that it occupied, but the landlord could recover from the tenant for loss and damage caused to the rest of the building.

Urban Splash Work Ltd v Ridgway and Cunningham [2018] UKUT 0032 (LC), 1 March 2018
Leaseholder’s application for determination of charges due in specified years – quantification of charges – whether liability to pay service charge conditional on certification – leaseholder’s liability to pay administration charges – leaseholder’s liability for costs of proceedings – section 20C and 27A, Landlord and Tenant Act 1985 – appeal allowed in part and remitted to FTT.

Go to the Resource Hub for more expert commentary on recent case law.

Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work

Talking points

Let’s stop hiding behind the lease

David Goldberg, CEO of POD Management, explains why property managers need to get more involved with their residents if they’re going to stay ahead of the competition

Over the last past ten years or so the IRPM and ARMA have done some amazing work in raising the standards within our industry, bringing a level of professionalism which has been much needed. I have nothing but admiration for the work they have done. However, while on one hand they have helped us understand leases and what things like a ‘parapet wall’ are, one of the unfortunate side-effects has been for property managers to use the lease as a pseudo parapet wall and hide behind it when dealing with lessees and residents.

I know that was never their intention. It is right that we should always refer to the lease when deciding how to deal with issues but property management is a lot more than simply managing an asset according to a set of rules. The industry should look at itself and ask whether it has been complicit in creating an inflexible way of working that does nothing to help our customers, given that we have taught our staff to be like that.

When I first started in the industry, providing great customer service was easy, probably because the lease didn’t seem quite as important as it does now. I always knew I had to refer to it but we never used it as an excuse not help a lessee / resident. I guess that’s because we hadn’t had high-profile ‘reasonableness’ legal cases or the education from ARMA / IRPM that now goes alongside our industry. We just did something until we found out we weren’t allowed to. No-one told us otherwise, as I suspect they didn’t know any better and to be perfectly honest, I quite liked that way of working.

So, has the industry gone too far the other way? Property managers are now inclined to turn to the lease without first applying a bit of common sense. I suspect that’s because it is easier to give the quick ‘that’s what the lease says’ answer, safe in the knowledge their line manager won’t take issue with it, rather than trying to find a solution that satisfies both parties. Have we therefore created an inflexible way of working that stifles initiative? Maybe it’s time to pop our heads above the parapet wall and find ways of working that help the customer, yet still meet the rule books.

Take demised repairs (those inside the lessee flat). We all know they are not our responsibility but does that mean we can’t help? Perhaps we could arrange for them to be attended to, recharge the cost to the lessee and possibly even make a small admin fee at the same time? The lessee might prefer to avoid the additional cost and handle it themselves but that’s consumer choice. By offering the option we might already have improved their view of us.

The point I’m trying to make here is this: let’s not turn to the rule books just because it’s easy. Customers expect more from their manager and frankly, they deserve it. They may never fully understand what we actually do, but perhaps we need to find new ways of doing things that provide added value and improve their view of agents.

Could you help tackle domestic abuse?

Gudrun talks to members at the IRPM seminar

Statistically speaking, if you are managing a block containing more than a handful of flats, the chances are that some kind of domestic abuse is taking place behind one of those closed doors. Every week in England and Wales two women are killed by their partner or ex-partner and the police receive 100 calls an hour reporting domestic abuse. Men as well as women are affected. The biggest issue around tackling domestic abuse is that it is a hidden crime. People are often too afraid to speak out and the number one reason why someone who is being abused cannot leave their abuser, is housing. If you have nowhere to go, what are you supposed to do?

So what does this have to do with property managers? Surely this is a private matter; shocking and tragic, yes of course, but nothing that a block manager has any agency over. However, Gudrun Burnet, the lead for domestic abuse at Peabody, says exactly the opposite. Gudrun works for one of London’s largest and oldest housing associations. Peabody Group owns and manages more than 55,000 homes across London and the South East, housing over 111,000 residents. She believes that block managers have a vital part to play in raising awareness and in supporting anyone who may be experiencing domestic abuse. Gudrun is not proposing that block managers barge into people’s homes to defend them. Instead she suggests a more softly, softly approach but one that can have a genuinely positive impact on residents.

Gudrun spoke passionately at this year’s IRPM Annual Seminar and there was a palpable ‘lightbulb moment’ when the audience realised that they really could make a difference by adopting some simple protocols.

First, she suggests putting up posters in communal areas which promote the various domestic abuse support services and helplines that people can call. “People often don’t know where to go for help,” she says. “Something as simple as knowing the right phone number could potentially save a life.”

Second, don’t assume that all reports of nuisance behaviour are just that. Take a step back and consider whether a complaint is really just about noise or could it be something more serious?

Why not ask someone to come into your block and talk about the subject to residents. Gudrun is happy to do this and so are other members of the Domestic Abuse Housing Alliance (DAHA) which was set up in order to help and support staff in housing associations. Just knowing a little more about this crime could not only raise awareness among residents but could even save a life.

To contact DAHA go to their website at

Topic of the month- Fire safety

Finding fault

While the property industry has its sights firmly set on fire safety, Bradley Parker takes a closer look at fault monitoring of fire alarm systems in residential blocks and offers solutions to a long-standing problem

I recently attended a call-out to a residential block where the fire alarm system was in fault (a smoke detector had been removed on the system) and the property manager had no idea either how long the system had been in fault and - more important - the length of time part of the building had been unprotected.

At another site, the automatic smoke ventilation system had been activated and the window vent opened, exposing the staircase to the elements and causing internal water damage. On both occasions I asked the property manager what procedure they had in place to manage fault monitoring of their systems. Both admitted they didn’t have one, instead relying on either a resident contacting them, the cleaning team reporting the problem during their (usually weekly) visit or them noticing the system is in fault themselves when they had the time to inspect their portfolio.

It has been almost a year since Future Fire Systems was launched and since then, I have surveyed a large number of blocks, either as a follow-up to a recent fire risk assessment or to provide takeover quotations for the service and maintenance of the fire and life safety equipment. To date, not one of those blocks has had either a fire or fault monitoring facility on the fire alarm and/or automatic smoke ventilation system. The general view seems to be that if a fire alarm system activates within a block, the alarm will be audible enough for someone to be alerted and contact the fire and rescue service. My response is that someone needs to be in the block to make that call and this may not always be the case; for example, everyone may be at work and/or away from home.

Of course if no one is in the block and a fire breaks out there will be no loss of life, but people’s homes will still be at risk. The true cost of lost personal possessions is immeasurable in most cases. Also, what are the insurance implications of rehoming residents during rebuilding works? Would the block policy cover this eventuality? Most residents wouldn’t know and certainly couldn’t put a figure on it.

As for fault monitoring of these systems, who do property managers rely on to contact them when a buzzing noise is heard coming from the cupboard housing the life safety equipment? The adjacent flat to complain of the irritating noise, if heard? Someone passing on their way to work, if they can remember during their journey? Fault monitoring of life safety systems should be an integral part of having a system installed in the first place. A fault could occur on the fire alarm system, that could render the system unfit for purpose and there is no acknowledgment of this in real time.

My career has predominantly been spent working with clients in the commercial sector. The sites that did not have staff on site out of normal working hours, more often than not had the fire alarm system linked to a manned monitoring centre, so in the event of an incident the centre would contact the fire and rescue service as well as designated key holders.

The ever-increasing technological advance of wireless communications, means that new solutions are being developed, and both 3G & 4G network paths can be utilised, via a communication unit, to efficiently monitor life safety equipment in buildings. The communication hardware is normally installed adjacent to the main control and indicating equipment, such as a fire alarm panel. Interfacing is via the connection of switching relays. As soon as a fire or fault relay is activated, a signal is sent via the network path. The monitoring system communicates with a mobile app and browser service which converts alarms into notifications, easy to read dashboards, timelines, graphs and reports. Users can be notified in real time as soon as a system goes into fault, or if the fire alarm system has activated in one of their properties. Along with the user, maintenance contractors can also be informed in real time, speeding up attendance on site.

With the shadow of Grenfell falling across all our working lives and the technology available to monitor systems with the swipe of a screen, the residential block sector now has no excuses for not taking fault finding seriously.

Bradley Parker is the managing director of Future Fire Systems. For more information go to www.future-fire.co.uk

Events

This month’s seminars, conferences and CPD events

IRPM Diary dates

09 July 2018 – Member exam - Glasgow
15 August 2018 - Associate Exam Workshop - London
16 August 2018 - Associate Exam Workshop - London
11 September 2018 - Associate Exam in London & Birmingham
26 September 2018 - AGM
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 – 27/06/18, 1/08/18

GDPR : Get your policies right
London – 15/06/18

Reading Leases
London - 11/07/18

Residential Service Charge Accounts Guidance
London - 26/06/18 ,

The procedural and technical issues of Section 20
London – 20/06/18

LEASE Webinars

LEASE has many

Brethertons Webinars

IRPM members get a substantial discount on the charges for these webinars.

ARLA Propertymark

To book courses for 2018.

Chartered Institute of Housing

CIH Housing 2018
Manchester - 26-28/06/18

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

Become a Member today

Becoming a member of The Property Institute opens doors for your personal development and your career.

Find out how