The month in brief
Welcome to the June issue of your Technical Update. This month, the lockdown has been lifted for most of us but our lives are very far from being back to normal.
Property management firms are now reflecting on the way they work and some are putting the lessons learned during the last three months to good use. In Topic of the Month, we talk to some of them to find out what impact the pandemic has had on the profession. Covid-19 has certainly focused our minds on the way we use technology and in this issue we talk to two property management companies which have developed new tech platforms in response to our new normal.
Also in this issue we report on the latest study of cladding remediation from the HCLG Committee; we take a look at the prospect of property ‘number plates’ and what they might mean for the industry; and we consider the latest building safety recommendations from the first phase of the Grenfell enquiry. We also take a closer look at the sensitive topic of domestic abuse and ask what property managers and social housing providers can do to help residents who may be the victims of violence.
Finally, if you have a comment or an observation to share, why not join the IRPM LinkedIn Forum and let us and your fellow property managers know about it. And if you have an idea for an article, please contact the Editor at [email protected]
Contents
IRPM News
CEO’s column | CPD training is now online | IRPM chats: serving notices
Leasehold/block management
Cladding fund is not enough, says HCLG Committee | Mortgages now being refused on buildings under 18m | Government launches geospatial strategy | Property ‘number plates’ will make management easier
PRS & BTR
Everything’s gone green in Greater Manchester | Energy efficiency guides for agents, landlords and tenants | Agents, are you ready for the ‘new normal’?
Social Housing
Fears over housing prevent domestic abuse survivors from leaving, survey reveals
Scotland and Wales
More affordable homes needed, says Scottish housing sector
Health and safety
Get the latest news on building safety | Social distancing advice for businesses from HSE
Wellbeing
The hidden mental health crisis of the cladding scandal
Fire safety
Grenfell Inquiry to resume | Government reports progress on safety recommendations
What’s new in HR?
Coronavirus Job Retention Scheme – what you need to know
Legislation
Tenant Fees Act 2019 now fully in force | Evictions ban extended
Legal update
Service Charges and Management during the Covid-19 Pandemic: Legal Issues | ALEP celebrates 13 years in enfranchisement
Talking points
UK housing: a market in recovery? | Proptech solutions to pandemic problems
Topic of the month
From our house to your house: lessons from the lockdown
What’s new on the Resource Hub?
Long reads
Our pick of some of this month’s interesting and informative longer reads.
IRPM News
CEO's column
Andrew Bulmer takes a look at the new Corporate Insolvency Governance Bill, CPD and cladding remediation. He also pays tribute to leasehold reform campaigner and legal expert Louie Burns.
We now have a huge and frankly awesome collection of FREE professional training to supercharge your skills and career. Brand new, high quality training and CPD, in bite sized chunks. Online, on-demand, anytime, anywhere; on your phone, on your train, in a coffee break, to suit you. Free to all IRPM members via the IRPM Learning Hub. Over 100 titles on conflict management, customer service, health and safety, HR, marketing, communication skills, project management, 60 second skills, housing, diversity and inclusion, online presence, leadership and management, IT skills… the list goes on. Everything you ever needed to know about almost anything. Yours, for free with your IRPM membership.
More good news...
Is this the end of evenings lost to AGMs in hotel rooms? The new Corporate Insolvency Governance Bill could, no should mean the end of travelling to AGMs in favour of Zoom/Teams style remote meetings. Dial in, do the meeting, use e-voting and be instantly back home in time for your kids/other life. Saves booking rooms, travel costs, time and emissions. The Bill also makes life easier for company documentation; watch our t on this and get some of your life back.
And while you are checking out IRPM Chats, see Simon Rubinsohn’s (RICS Chief Economist) wisdom on the future pipeline of new build housing, the supply of contractors and materials and the housing market. Also Cass Zanelli on getting service charge funds in, in a kind way, and Zurich Engineering on lift inspection delays.
Build to Rent
The new IRPM Foundation course in Build to Rent is now live, with an introductory offer running over the summer. Game-changing modules on safety, the customer and ethical behaviours wraps around all the essential technical knowledge to provide a rounded learning experience for new development managers, key on-site staff and back-office support teams.
Reviewing risk assessments - again
Moving from 2m to 1m distancing (has anyone told the virus?) and reopening businesses means we need, once again, to review those risk assessments and figure out our own best plan for working safely and getting services delivered. We are getting great practice in continuously rethinking those risk assessments as the live documents they should be.
Cladding remediation
The tsunami of EWS1 forms needs signing off so that safe flats can be sold/remortgaged, freeing trapped people and getting the housing market and its secondary economy (carpets, kitchens, furniture, etc) going again. Also, to identify all buildings that need work and prioritise their remediation according to risk to life. There are not enough fire risk engineers to sign off all the EWS1s any year soon. We have asked government to fast-track the accreditation of experienced surveyors/engineers to complete cladding surveys within months and support them with a professional indemnity insurance scheme. If we can build hospitals at speed, we can get buildings checked at pace. It just needs a willing government to sweep away the blockages.
Cladding remediation should be prioritised by risk to life. The proposed ‘first come – first served’ system for the £1bn fund flies in the face of prudent risk management and abandons any notion of spending taxpayers’ money where it is most needed. We need a central assessment of buildings at risk and while that system is running, it can share cost data to ensure rip-off contracts are avoided. It will also confirm that while £1bn is a chunky sum, it isn’t nearly enough.
The HCLG Select Committee published their report on cladding remediation as the third anniversary of Grenfell passed by, but their damning criticism of the slow remediation made only a modest splash within the stormy media seas of our Covid world. Nonetheless, their report has caused a stir, what with threats of government using compulsory purchase orders to take freeholds off landlords. The key point is that leaseholders are not to blame and shouldn’t pay. Government was told to open its purse, make buildings safe now and make those at fault pay up. We agree.
If you haven’t got your buildings registered for the non-ACM remediation fund yet, you have only a few weeks left, so don’t delay.
Louie Burns - obituary
Leasehold reform campaigner Louis ‘Louie’ Burns, 54, died unexpectedly last weekend. Louie joined Leasehold Solutions, a family-run business helping leaseholders to extend their leases or buy their freeholds. He was an influential and effective campaigner for reform of the leasehold system, was involved with the Association of Leasehold Enfranchisement Practitioners (ALEP) and was a trustee of the Leasehold Knowledge Partnership (LKP) to whom he donated, along with the National Leasehold Campaign, the proceeds from his book, The leaseholder’s simple guide to leasehold. Louie was a regular media commentator on matters leasehold, championing the consumer and highlighting bad practice.
IRPM wish to recognise his achievements in our sector and to extend our sympathies to his family and friends at this time.
Andrew Bulmer is CEO of IRPM
CPD training is now online
Last month we announced that more than 70 CPD training courses have been made available online and FREE for IRPM members.
Drawing on our expertise in providing training and education, we will be launching new online video-based CPD content every month. This month’s top courses are:
• Conflict management: handling conflict and negotiation ethically
• Customer service: vulnerable customers
• Health and safety: PPE awareness
• Leadership and management: become an effective Leader, Part 1
All courses have a modular format and are delivered via our website through a combination of videos and handouts with interactive knowledge checks and quizzes.
IRPM head of training Kevin Fairless said “With a fresh look, and the latest information, each course is designed to give participants a top-level view on the subject. We have created our library of courses to be bite-sized, engaging, and enjoyable.”
CPD training does not have to be a chore and take up a huge chunk of your day, so why not log in, take your time to browse and try this month’s selection of courses.
IRPM chats: serving notices
One of the most asked questions of Cassandra Zanelli, solicitor and partner of PM Legal Services, has been, "How do we serve notices electronically during Covid-19"? So, we decided an informal 'IRPM Chat' was badly needed to get the answers for our members.
We asked:
- For a refresher on service charge demands
- How to serve notices for service charges
- How to serve demands - in particular during Covid-19
- What are the legal obligations and implications
Other IRPM chats include:
- Keeping estates afloat - customers, communication & credit control in a Covid world
- Lift Inspections (LOLER) – what, why, how & management during covid-19
- The property market – what’s next?
- AGM Changes & More – Corporate Insolvency Governance Bill
If any of this content has opened up questions or issues you would like to debate then head over to our LinkedIn member forum and start a discussion.
Leasehold/block management
Cladding fund is not enough, says HCLG Committee
On 12 June, the Housing, Communities and Local Government Committee issued a report Cladding: progress on remediation, criticising the government’s handling of the cladding crisis. Building owners and freeholders who have not yet fixed unsafe buildings were also censured and managing agents were in the frame for not passing on information about the construction of at-risk buildings.
The report is clear that government funds allocated to remediate dangerous buildings are not enough to fix the problem – and won’t even cover the cost of replacing cladding. The committee points to the additional cost of tackling other fire safety issues such as insulation, fire stopping and compartmentation, and fire doors and it regularly restates the view that leaseholders who bought their flat in good faith should not have to pay for putting right someone else’s bad work. And nor should residents be expected to meet the costs of fire-watching and other interim safety works.
The committee makes the case for prioritising remediation works by risk to life - something IRPM has repeatedly called for. The request for all ACM buildings to be fixed by December 2021 and non-ACM buildings by June 2022 is ambitious. But whatever the timeline, IRPM supports the report’s stipulation that buildings are checked quickly and then remediated according to risk.
The report is clear on how leasehold works and that leaseholders should not pay. And therefore it concludes that the Government needs to step in with more money.
The committee also takes the radical step of calling on the Government to consider taking over blocks where work has not started by the proposed deadline of by December 2020 by using compulsory purchase order powers.
Clive Betts, chair of the HCLG committee said: “Compulsory purchase order powers should be used to take direct ownership of buildings where owners have failed to begin remedial work by December 2020. It is time for the government to commit to end the scourge of dangerous cladding once and for all.”
Mortgages now being refused on buildings under 18m
According to a report in Inside Housing in June, flat sales across the country have ground to a halt as banks are now refusing mortgages on buildings of all heights, not just those of 18m in height and above.
Since the Grenfell Tower fire, banks have become reluctant to lend on properties with potentially dangerous cladding or balconies and have been valuing flats at zero while waiting for remediation or a completed EWS1 form to certificate the building as safe. However, this is now impacting homes in buildings under 18m, too and Inside Housing has identified blocks as small as 9m where residents are trapped in unsellable properties.
The problem is being compounded by a national shortage of professionals to carry out EWS1 checks, originally designed to cover only buildings over 18m and provide a route for inspectors to make a decision on whether cladding systems were safe.
In January, the government published updated building safety guidance which called for dangerous cladding on all buildings, regardless of height, to be removed. This change has brought tens of thousands more buildings into scope, with banks unwilling to give mortgages on buildings under 18m without an EWS check.
Government launches new geospatial strategy
The government has published a new strategy setting out its approach to location data. Unlocking the Power of Location: the UK’s geospatial strategy identifies how the UK aims to lead the way on location data via creation of a national framework to boost economic, social and environmental value, improve people’s lives and drive innovation by connecting people, organisations and services.
The aim is to make smarter and faster property-related decisions by connecting different data sets to get a better understanding of each property.
The strategy sets out the first steps that the Geospatial Commission and its partners will carry out, including:
- the next phase of the National Underground Asset Programme (NUAR), which looks to digitally map pipes and cables underground;
- publishing guidance for the ethical use of location data and technology; and
- the piloting of an International Geospatial Service in 2021 to showcase and export UK geospatial expertise across the world.
The government believes these activities will drive innovation and boost the economy across the UK.
Announcing the new strategy, Sir Andrew Dilnot, the Chair of the Geospatial Commission, said: “Better location data will help us to make more informed decisions on everything from where to build new schools and hospitals, to how to manage precious resources such as land and energy, creating economic, social and environmental value.”
Property ‘number plates’ will make management easier
On 1 July, a new property ‘number plate’ system for homes will make it easier for property managers and agents to enforce the rules that regulate rented homes. The IRPM has been involved in developing the Unique Property Reference Number (UPRN) system, which gives each property in the country a single identification number. From next month, non-commercial users and homeowners will be able to access the data via an Open Government License.
IRPM has been working with The Lettings Industry Council, which has lobbied the government for two years to get the initiative off the ground. The system will make property management easier for agents, who can use UPRNs to identify homes in the same way that car number plates are linked to MOT, tax and insurance documents.
With a single number to identify every home in the UK, it will be easier to manage and enforce many of the regulations that apply to rented homes, including EPCs, deposit schemes and selective licensing as well as electrical and gas safety certification.
“This will give tenants the peace of mind that their property has passed all of its checks and local authorities the transparency they need for improved enforcement,” Theresa Wallace, Chair of TLIC, told The Negotiator in June. The TLIC also anticipates that, in future, the property ‘number plate’ will be used in the housing sector as the key reference to a property, rather than its address.
The Energy Performance of Buildings (EPC) register is already using UPRNs and hopes that other information suppliers across the industry will follow suit.
PRS & BTR
Everything’s gone green in Greater Manchester
BTR operator More. is supporting a local charity creating a greener Greater Manchester by planting a tree for each of the 270 residents at their development at Duet Salford Quays
The planting is being done in partnership with tree planting movement, City of Trees, which aims to help Greater Manchester become a greener place and contribute to the region becoming carbon neutral by 2038. To date, the initiative has seen over 459,929 trees planted across the City.
Duet is a new development of 270 apartments. At 15 storeys tall, it is the latest addition to the city’s skyline. It was delivered by Moorfield Group on behalf of funds under management, working with developer Glenbrook Property, and is professionally managed by specialist rental operator, Allsop.
Energy efficiency guides for agents, landlords and tenants
Two new handbooks are now available from electricity distributor UK Power Networks that aim to help the private rental sector to improve energy efficiency.
The new guides are part of UK Power networks’ fuel poverty programme, which is aimed at fuel-poor homes in the communities it serves. Energy advice has been issued to around 800,000 families and the new guides are designed to help too, by providing property improvement advice for land-lords, and showing tenants how to do an energy audit.
The power company is working with charity Home Energy Efficiency Training to ensure that agents, landlord focus groups, and forums for private tenants have access to information and resources enabling them to improve the quality of housing stock and, in turn, reduce energy bills.
Contact HEET for more information and copies of the handbooks.
Agents, are you ready for the ‘new normal’?
Restrictions on lettings were lifted in May, but social distancing measures are here to stay. So although customer-facing staff may now be back at work, it’s a long way from business as usual. Online lettings specialist Goodlord has produced a new E-book titled How to win in the new normal, setting out a range of strategies to help property agents ensure their business is equipped to face the future.
The book covers:
• Planning for different futures
• Managing your messaging
• Investing in your virtual foundations
• Rethinking your service offer
• Building long-lasting relationships.
Copies of the book can be downloaded here.
Electrical safety checks
The government published non-statutory guidance for landlords and tenants on the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (S.I. 2002/312) at the beginning of June. The guidance has now been been updated to clarify the types of tenancies to which the regulations apply. The guidance can be found here.
Social Housing
Fears over housing prevent domestic abuse survivors from leaving, survey reveals
More than two-thirds of domestic violence survivors who stay with their abusers say concerns around future housing are a barrier to leaving. These are the findings of a new survey by Women’s Aid (source: Inside Housing).
Of the 136 women who responded to the survey, 38 were still in a relationship with their abusive partner. Of these, 68% said housing was a factor in their decision to stay. Housing issues that may prevent people from leaving their partner include a lack of access to money to pay rent and deposits, fear of homelessness, and the lack of help from local authority housing teams.
A total of 25 of the survey’s respondents had applied to their local housing team for emergency accommodation due to domestic abuse. Of those, less than half were treated as being in priority need and a similar number said their experience with a council housing team was either bad or terrible.
During the Covid-19 lockdown, cases of domestic abuse have risen sharply. Over a 21-day period in May, Refuge, the UK’s largest domestic abuse charity, reported a staggering 49% increase in calls to its helpline, as well as a 700% increase in a single day. In response, the government announced that the Domestic Abuse Bill, which is currently going through parliament, will be amended so that domestic abuse survivors are automatically given priority need for housing.
Housing providers have a key role to play during this heightened period of isolation as they have unique access to people in their homes. The Domestic Abuse Housing Alliance (DAHA) has produced guidance specifically for housing providers to help them with making a plan of action and offering guidance on how to make safe contact.
DAHA estimates the need for safe and secure housing will increase as lockdown measures ease and survivors are able to flee to safety. Refuge services pre-COVID19 were already overstretched and struggling to meet the high demand for their support with 64% of referrals to refuge in 2018-19 being declined. In response, DAHA in partnership with Women’s Aid England, the National Housing Federation and Chartered Institute of Housing has called on the social housing sector to offer properties to let directly to survivors ready to move on from refuge. This will help free up much needed spaces for other women and children who need these vital services.
Click here for further information on how housing providers can get involved.
Ongoing complaints about noise and other anti-social behaviour may be linked to domestic abuse. Property managers may be able to help by displaying in communal areas the freephone number for the National Domestic Abuse Helpline (0808 2000 247) and highlighting the fact that it is available 24 hours a day. Find more details here.
Don’t forget that men are also victims of domestic abuse, so helpline numbers for men’s support services can also be publicised via downloadable resources here.
Scotland and Wales
More affordable homes needed, says Scottish housing sector
Leading housing organisations in Scotland are calling on the next Scottish government to commit to delivering thousands more affordable homes within its parliamentary term.
The Scottish Federation of Housing Associations (SFHA), the Chartered Institute of Housing (CIH) and Shelter Scotland have published a report outlining housing need in Scotland between 2021 and 2026. It calls on the next Scottish government, due to be elected in May next year, to commit to a capital investment programme of £3.4bn over five years in order to deliver 53,000 affordable homes.
The target would mark an increase on the 50,000 affordable homes target that was set by the current Scottish government at the beginning its parliamentary term in 2016.
Health and safety
Get the latest news on building safety
The government has asked HSE to establish a new building safety regulator in the wake of the Grenfell Tower disaster and following recommendations in the Building a Safer Future report by Dame Judith Hackitt.
The new regulator will oversee the safe design, construction and occupation of high-risk buildings so that residents are safe and feel safe. It will be independent and give expert advice to:
• local regulators, landlords and building owners
• the construction and building design industry
• residents
Subscribe to the HSE building safety email bulletin to receive updates on progress.
Social distancing advice from HSE
HSE has developed new guidelines on how businesses must maintain social distancing and protect workers. The guidance explains what employers must do in order to protect workers and keep their businesses open.
The construction industry has come together to show how it has been interpreting and applying government guidance in responding to Covid-19 by providing practical examples of how it is safeguarding its workforce while operating sites.
Many of the examples have been built on the Construction Leadership Council’s ‘Site Operating Procedures (v4 – published 19 May) – Protecting Your Workforce During Coronavirus (Covid-19)’ guidance and its hierarchy of controls, which can be downloaded here.
The Site Operating Procedures have been updated to incorporate a number of important technical changes as a result of the recently published government guidance to help employers keep their workplaces operating safely. These cover eight workplace settings including construction sites, other people’s homes, vehicles and offices.
HSE has also published a range of Covid-19 related guidance, which property managers may find useful. It includes information on:
- First aid during the outbreak - guidance on first aid in non-healthcare settings to help employers ensure first aiders are confident they can help someone injured or ill at work.
- Protecting home workers - guidance for employers to help protect the health and safety of those working from home during the outbreak.
- Hand sanitiser and surface disinfectant -advice to employers on choosing hand sanitisers and surface disinfectants to use during the outbreak.
To read and download all HSE guidance relating to the Covid-19 pandemic, go to www.hse.gov.uk
Wellbeing
The hidden mental health crisis of the cladding scandal
A survey by the UK Cladding Action Group (UKCAG) has revealed the impact that the issue of unsafe cladding in blocks around the country is having on the mental health of leaseholders (source: Inside Housing).
UKCAG, which represents dozens of affected blocks, carried out a survey among 550 leaseholders on the impact of the cladding crisis on their wellbeing. The findings are bleak. Nine out of 10 flat owners surveyed said their mental health has deteriorated as a direct result of cladding problems at their block. Just over a quarter of respondents have been given a formal diagnosis of a new mental health condition, while 35% said an existing condition had got worse. The most shocking finding was that almost a quarter (23%) of the people who spoke to UKCAG said they had considered self-harm or suicide.
The UKCAG survey only provides limited insight into the problems being faced by leaseholders. The 550 people polled represent only 143 blocks, but there are around 1,700 blocks across the country that are covered in dangerous cladding. “Given the sheer number of unsafe buildings, it is inconceivable the problem is limited to just those who completed the survey,” said founding member of UKCAG, Will Martin.
Fire Safety
Grenfell Inquiry to resume
Limited numbers of people will take part in hearings when the Grenfell Inquiry resumes on 6 July. In a statement made in June, a spokesperson for the Inquiry said proceedings would only be able to continue if they can be undertaken safely and if attendance remains consistent with the available guidance and the Government’s easing of restrictions.
Members of the panel, counsel to the Inquiry, the witness giving evidence and their legal representative, plus support staff and an invited journalist, will be included.
Government reports progress on safety recommendations
In June, the Prime Minister wrote to the chairman of the public inquiry into the Grenfell Tower fire, updating Sir Martin Moore-Bick on the Government’s progress in implementing the inquiry’s Phase 1 recommendations.
- A ban on the use of combustible materials was proposed in December 2018 with a public consultation held earlier this year. The response will be published in due course.
- The progress being made on remediation is well documented and work is ongoing to ensure at-risk buildings are made safe. We report elsewhere in this issue on the latest developments in this area.
- The Government has established a Fire Protection Board chaired by the National Fire Chiefs Council. This is leading a Building Risk Review programme to ensure that all high-rise residential buildings of 18m or above are inspected or reviewed by the end of 2021. A proportion of the £20M given to fire and rescue services in the March Budget is being used to support an uplift in protection capability.
- At the end of 2019, a technical review of ‘stay put’ was announced. The first stage of this work is now underway.
- A new building safety regulator is now being established via the HSE and the Government will publish a draft Building Safety Bill for scrutiny before it is put before Parliament. This will put in place new and enhanced regulatory regimes for building safety and construction products, ensuring residents have a stronger voice.
- New duties for building owners and managers were called for by the Phase 1 report of the Grenfell Inquiry as well as a responsibility to share technical information with fire and rescue services and undertake regular inspections of flat entrance doors. These recommendations for existing buildings will be taken forward under the Regulatory Reform (Fire Safety) order 2005, underpinned by the changes being introduced through the Fire Safety Bill, which was introduced to Parliament in March.
Many of the inquiry’s Phase 1 recommendations were directed at non-governmental organisations, including the London Fire Brigade. The government has requested regular reports from the LFB, setting out how they are translating the recommendations into action. The NFCC is also rolling out the recommendations beyond London to other fire and rescue services around the country.
What’s new in HR?
Coronavirus Job Retention Scheme – what you need to know
HMRC has published the latest information about the Coronavirus Job Retention Scheme, including updates to guidance and the online service, and how to avoid common mistakes that can lead to a wrong or delayed payment.
In response to feedback from customers using the service, HMRC has added a 'save and return' option. This means that you can now return to a partially completed claim, rather than having to do it all in one go.When you make a claim through the Coronavirus Job Retention Scheme, you will receive the funds within six working days after you apply, provided your claim matches records that we hold for your PAYE scheme. Making sure that you submit your claim correctly will reduce the chance of any delayed or wrong payments.
Go to the HMRCgovuk. These provide an overview of the scheme and a detailed session about how to make a claim.
Legislation
Tenant Fees Act 2019 now fully in force
The Tenant Fees Act 2019 was fully enacted from 1 June and now applies to all tenancies and licences to occupy housing in the private rental sector in England. The Act previously applied to landlords with tenancies and licences that had been entered into from 1 June 2019.
The legislation also introduced a deposit cap that limits deposits to five weeks’ rent (or six weeks if the annual rent is £50,000 or more).
Allowable charges are now:
- A refundable deposit
- A refundable holding deposit – capped at one week’s rent
- Rent, utilities, communication services, TV licence and council tax
- Fees for changing or ending a tenancy at the tenant’s request
- Default fees for late payment of rent
- Fees for replacing a lost key or security device, where required under a tenancy agreement and with evidence of the cost in the form of a receipt or invoice.
Any breach of the new legislation carries a fine of up to £5000. However, if a landlord breaches the legislation again within five years of being fined the first time, that is now a criminal offence and carries an unlimited fine. For a full list of charges that are now banned under the legislation, see the Government guidance.
Evictions ban extended
The ban on evictions in the private rental sector has been extended to 23 August. The government made the announcement as it came under increasing pressure to rollout further emergency measures to help renters beyond the original 29 June deadline.
With the Bank of England predicting the worst recession for 300 years and the possibility of up to 1.7 million people in the private sector losing their jobs this summer, the Labour party and tenant campaign groups urged the government to extend its protection for the PRS. The Labour party’s five-point plan, published in May, set out proposals for a range of measures to help renters including giving tenants two years to repay rent debt.
Legal update
Service Charges and Management during the Covid-19 Pandemic: Legal Issues
A wide-ranging and insightful analysis by Mark Loveday looks in detail at the legal issues arising for property managers during the coronavirus outbreak. Here are the key points.
At present, leaseholders and landlords of residential leasehold properties are facing difficulties without any direct precedent in modern times. In particular, the sudden collapse in leaseholder incomes has had a dramatic effect on service charge receipts. The challenges pose numerous legal questions.
This article covers several key issues in residential service charge and management law arising from the Coronavirus pandemic and self-isolation.
- Emergency legislation does not affect the liability of long leaseholders to pay service charges, ground rent or other sums due under residential leases.
- The legislation does not affect obligations owed by leaseholders and landlords under their leases. In particular, landlords are still generally required to carry out repairs and to maintain premises.
- The legislation has not suspended the operation of statutory leaseholder rights, such as the Right to Manage, limitations on service charges etc.
- Although landlords will understandably treat requests by leaseholders for payment plans and other service charge concessions with sympathy, they should be aware that some forms of concessions may be open to challenge by other leaseholders. Such concessions should therefore be in proper form.
- Statutory time limits have not been suspended during lockdown.
- Demands and statutory notices during the emergency should generally continue to be served by post, not email.
- The courts and property tribunals continue to operate during the pandemic, although delays will be inevitable. They have brought forward modified procedures to enable proceedings to be decided by judges without a hearing or by way of video or audio hearings. Applications to the tribunals may be made by email, but there may be an issue with payment of fees.
To read this article in full click here.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
Go to the Resource Hub for more case law.
ALEP celebrates 13 years in enfranchisement
In June, the Association of Leasehold Enfranchisement Practitioners (ALEP) celebrated 13 years since its formation. The not-for-profit organisation brings together barristers, managing agents, project managers, solicitors and valuers working in the residential leasehold sector.
ALEP founder and director Anna Bailey said: “I am very proud of how far ALEP has come since my brother, Alex Greenslade, and I launched it in 2007; It is now an award-winning association with more than 260 members”.
As part of modifying its practices to deal with the COVID-19 situation, ALEP has taken practical steps to ensure best practice continues across the sector. ALEP’s protocol for Service of Initial Notices and Counter-Notices offers a solution to some of the challenges currently being faced by its members and professionals, and the Association has encouraged all members to adopt this protocol to ensure the continuation of a high quality service for clients.
Click here for more information about ALEP
Talking points
UK housing: A market in recovery?
Alpa Bhakta, takes a closer look at the post-pandemic prospects for the property sector
On 12 May, the Secretary of State for Housing, Communities and Local Government Robert Jenrick announced the re-opening of England’s property market, after seven weeks of it being effectively on hold due to social distancing measures. Certain lockdown measures were lifted, ensuring onsite valuations and viewings could once again take place. Almost immediately, estate agents and listing websites recorded a significant spike in interest coming from prospective buyers, eager to consider a residential purchase now that restrictions had been eased. But, does this renewed activity point to the beginning of a house price recovery?
A short-term dip?
Let’s be realistic—a short-term dip in property prices as a consequence of COVID-19 is unavoidable. The pandemic brought the majority of transactions to a standstill and compelled buyers and sellers to temporarily retreat from the market. The extent of this dip, however, is far trickier to ascertain.
One only needs to look at the different projections on offer. Forecasts range from -5% to as much as -30%, though the vast majority of these predictions generally fall between -5% to -10%. Only Lloyds and Deutsche Bank hold the more pessimistic view that we may see a market retraction of more than -15%.
I personally predict that this dip will be smaller, rather than larger, as the sheer scale of the demand witnessed at the beginning of the year for UK real estate has by no means disappeared. Similar to the reaction witnessed following the 2019 general election result, buyers will return to the market when there is less uncertainty.
A long-term recovery
I am still confident that, in the long term, UK property will see a substantial growth in house prices over the next three to five years. This falls in line with the long-term market projections being offered by Savills—which predicts house prices to rise by over 15% by 2024. This house price growth path will by no means be linear. Nonetheless, it is important not to let the immediate challenges we are facing distort the bigger picture. After all, there is a reason why real estate has long remained a popular asset class, particularly in times of volatility.
For now, buyers, sellers and lenders will be keeping a watchful eye on the COVID-19 situation and the property market’s general response to the relaxing of lockdown measures. Should the virus be effectively contained over the coming months, there is good reason to be optimistic for the future.
Alpa Bhakta is CEO of Butterfield Mortgages Limited
Proptech solutions to pandemic problems
We’ve all been thinking on our feet during the lockdown, finding new ways to work and to communicate with colleagues, employees and customers while remaining socially distanced. Here, we talk to two property management companies that have developed proptech solutions to help customers digitally connect with the services they offer.
Property manager Ringley was in the process of developing a cloud-based lettings platform prior to the Covid-19 outbreak. So in response to the need for landlords and agents to work remotely and to help them cope with the social distancing measures introduced by the government in March, the company brought the launch date forward and brought PlanetRent to the market in April.
PlanetRent automates and simplifies lettings by harvesting data and digitising all the key processes that are needed by both agents and their customers. It connects agents, landlords, tenants, contractors, accountants and site staff, each through their own portal, so they can access the data they need, enabling them to carry out transactions from home – or on-the-go via a phone or tablet.
The platform also automates all the key processes around compliance, marketing, leasing and management. It allows all documents and files to be accessed virtually and enables fully compliant contracts to be generated in seconds. These can then be e-signed remotely by landlords, tenants and agents.
Making payments easy
Another innovative proptech solution has been devised by London-based consultancy Moricon, which specialises in setting up bespoke hospitality and service delivery in residential blocks.
Founder Sebastian Moritz is launching payment app Resisettle this summer. The app works as a payment processing platform and enables tenants or leaseholders in blocks with a concierge to pay local businesses direct for ad hoc purchases such as groceries, laundry or flowers, which can then be delivered and purchases managed by reception staff.
“We believe, that with COVID, less person-to-person interaction will be something tenants will require. However that does not mean a drop in service quality as a concierge/site staff is always involved in the transaction,” Sebastian explains.
ResiSettle uses a safe payment solution via Stripe, facilitating transactions between resident, vendor and concierge or caretaker teams without the need for any face-to-face interactions or cash transfers. This allows building owners and/or property managers to build relationships with local businesses and, Sebastian hopes, create a win-win situation whereby their custom is increased and tenants can quickly and easily pay for their shopping and support local traders at the same time. Resisettle is a white-label product, which can be fully customised by property owners and developers with their own branding so it can be marketed alongside other branded offers.
Both these new proptech tools demonstrate how new solutions can be brought to market quickly when the need arises and how customers are benefitting from property managers’ innovative thinking and strong understanding of the sectors they serve.
Topic of the month
From our house to your house: lessons from the lockdown
From WFH to e-signing documents, we’ve all had to change our mindset during the lockdown. But what, if anything, have we learned and where do we go from here? We talked to some of our members to find out.
Apart from the obvious health concerns that have affected the whole country, one of the biggest impacts of the Covid-19 pandemic has been the agility that technology has brought to the workplace. During the lockdown, the majority of property managers have been able to work from home with little more than an internet connection and a laptop. Video-conferencing has become part and parcel of our daily lives and most firms have quickly resolved or found a way around the practical problems of how to sign and serve documents, hold AGMs and maintain properties while meeting social distancing guidelines.
For many of us, work may never be quite the same again, so how have property managers fared during this unprecedented period – and what lessons have we learned from it?
How have we changed?
David Clark, non-executive chairman of Mainstay believes the sector has already changed significantly with reduced travel, more video conferencing and more flexible roles. Teams are finding ways to support those who are unable to undertake elements of their jobs because they are isolating or vulnerable by sharing duties and, in his experience, both customers and clients have been supportive throughout. However, David does note what he describes as “an uptick in enquiries regarding everything from repairs to resales” in recent weeks.
Niall McGuinness, head of London residential property management at SHW has had a similar experience, with residents feeling the pressure of being at home 24/7. “Property managers have been drawn into liaising with the police to deal with domestic abuse and confront antisocial behaviour, which is very concerning. And on a more mundane level, with buildings more or less fully occupied, we’ve faced a constant drip of leaks to get fixed!” he says. However, Niall believes that these problems show the value of having a good property manager on hand to deal with the inevitable complications and issues that arise in any residential blocks. “My managers have shown they can do that just as effectively working from home as they can in an office,” he says.
Jess Parmar, COO at PBM Property Management thinks technology has been the sector’s saviour through this difficult period. Working from home has taught us more about the importance of communication, she says. PBM has established new leadership teams to ensure the right messages are communicated across the team and site staff. “The technology we implemented such as Zoom, Slack, Trello, cloud-based Qube and the Horizon telephone app – helped us automate this”. In future Jess thinks many businesses will look to create even more flexible working and enable their colleagues to work from home more often.
Sarah Fisher from MIH property echoes Jess’s experience. For her property managers, business continuity has been achieved in large part by taking the step to create a customer service inbox. All emails are copied to the inbox and all property managers having access to it. “We truly believe that our clients are inadvertently and unknowingly benefitting from this,” says Sarah. “Should they call and get someone other than their property manager the person answering the phone will general-ly know what they are talking about.” This means all issues can be dealt with promptly regardless of what they are, who picks up the phone or who has received the email. “Our emails are received at the same time as if we received them in the office, sometimes quicker Case Law due to home connections being faster,” she adds. ”We are also able to answer our phones and do everything that we would if we were in the office. In fact, the only thing we can’t do from home is give out and receive returned keys, and send out and receive post.”
Camden-based Ringley Chartered Surveyors has got around this by using e-post opt-in and e-signing for key documents. The company had already put these processes in place prior to Covid-19 and they have now come into their own, says MD Mary-Anne Bowring. Niall McGuinness agrees that the sector was already embracing technology and thinks the pandemic has simply accelerated uptake. “We are using online portals much more now to get our message out there,” he says.
At Firstport too, the pandemic has underlined the importance of clear and regular communication with customers. Chief Operating Officer David Young says it has shown how digital tools play an important role in enabling quicker and more regular communication. “These efficiencies and improvements in customer service are here to stay”, he says.
What are the benefits?
There is a general consensus among the property managers that we spoke to that residents have also quickly embraced the increasing use of technology: Zoom meetings in particular are seen as an improvement rather than the endless flow of emails. The benefits of the change are widely acknowledged, with Niall McGuiness and David Clarke both citing speed, better information sharing and fewer evening meetings on site as key benefits.
So it is clear that working practices have changed rapidly in the last 12 weeks but what of the future? Ringley Group CEO Maryanne Bowring thinks the pandemic will accelerate the decrease in office space requirements per person that have been gradually coming into play in recent years. “For the foreseeable future, it is doubtful whether any company can expect all their people to work in the office five days a week“, she says.
Niall McGuinness also says no to business as usual – at least until a Covid-19 vaccine is found. “Our offices are in central London and heavily reliant on public transport. We will adapt to ensure some office presence in the future but we certainly will not be at full occupancy. All of our offices are having risk assessments done and this will give us a flavour of the space that will be left,” he says. Unfortunately he also thinks some businesses could be forced to cut back in the face of a shrinking economy. The British Chamber of Commerce has warned that six out of 10 residential managing agents could run out of cash within the next three months. “In the short-term though,” says Niall, “all we can do is adapt to changing circumstances to do our jobs to the best of our ability and demonstrate the value we add even in such difficult times.
David Young agrees. “This crisis is a good reminder of the core principles behind good property management – operational excellence, adaptability and customer focus”, he says.
Putting wellbeing first
Jess Parmar believes that, ultimately, the pandemic has served to magnify the importance of the property manager’s role in managing relationships rather than just dealing with technical issues. “Customer engagement plays a significant part of that role and it is not just a strategy, it is truly reaching out to your customers, asking for their feedback and implementing that feedback across the property and wider community”, she says.
The other thing we can all learn from this experience, says Jess, is that engagement with customers, “starts and ends with our colleagues’ well-being”. At PBM, as in many other PM companies, ‘office vibe surveys’ were carried out more frequently than usual to allow the management team to ask staff questions about their well-being, which is hugely important to us, says Jess. If your team are feeling motivated and inspired in their working environment, only then can they deliver our mission to create happy homes, cared for spaces and better value.”
What’s new on the Resource Hub?
Service Charges and Management during the Covid-19 Pandemic: Legal Issues
This article, written by leading property barrister Mark Loveday looks in detail at the key issues in residential service charge and management law arising from the Coronavirus pandemic.
Duval v 11-13 Randolph Crescent Ltd
The Supreme Court gave judgment on 6 May in the case of Duval v 11-13 Randolph Crescent Ltd [2020] UKSC 18 dismissing the landlord’s appeal. The Supreme Court found that a landlord is not entitled to grant a licence for alterations for works which would otherwise breach an absolute covenant where there is a mutual enforceability covenant. Read the case commentary here from Tanfield Chambers.
Trecarrell House Ltd v Rouncefield
The Court of Appeal concluded that the failure to provide a gas safety certificate prior to a tenant’s occupation does not prevent a landlord serving a s.21 notice as long as the relevant certificate has been given before service of the notice.
1 West India Quay Residential Ltd v East Tower Apartments Ltd
Leases often provide that a landlord may not unreasonably refuse consent to assign. In this case, the Court of Appeal considered whether consent was unreasonably withheld where two of the grounds for refusal were reasonable, but a third was held not to be.
Long reads
Reimagining the office and work life after COVID-19
The pandemic has forced the adoption of new ways of working. Organizations must reimagine their work and the role of offices in creating safe, productive, and enjoyable jobs and lives for employees.
Bye-bye buy-to-let?
Tighter regulation and tax have limited BTL supply, creating opportunities for Build to Rent
How working from home may change the residential landscape
How has the Working From Home (WFH) trend been affected by Covid-19? Will migration into cities change going forward? Will the layout of our homes need rethinking and households become more energy conscious?
