The month in brief
Welcome to the September issue of the IRPM Technical Update. Autumn is in the air and summer holidays are rapidly becoming a distant memory. August is traditionally a quiet time in the property industry but, as ever, in the residential management sector there has been plenty going on. Health and safety continues to top the agenda, with fire risk still uppermost in all our minds.
Fire doors are the latest product to come in for criticism, with those used as front doors under scrutiny for compliance with the regulations. Five suppliers have been forced to take their doors off the market and replacements are in limited supply. In this month’s Talking Points, we address the thorny issue of who should pay for their replacement. We also report on the problem of potentially combustible window frames, which are proving an issue for social housing providers and private landlords alike.
In other news, we take a closer look at the long-awaited Social Housing Green Paper, report on a new call for evidence on EPCs, remind property managers about Gas Safety Week and flag up the need for anyone involved in distributing insurance to be aware that the new Insurance Distribution Directive will impact on the way they do business and increase their CPD requirements. Read on to find out more.
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IRPM News
CEO's column | 2018 AGM open to all | Regional Seminars – don’t miss out
In the press
MHCLG finds £400m fund for cladding removal | Rental demand highest since last September | Client Money Protection scheme launched by Propertymark | Right To Rent: date set for full High Court challenge
What’s new in HR
Data protection self-assessment tools now online
Social Housing
Combustible window panels widespread on social housing tower blocks | Government expects 3,000 Right to Buy sales in Midlands pilot | League tables could prove ‘counter-productive’, sector warns
Health & safety
Unsafe gas work potentially fatal | Two companies plead guilty following lift death | Landlord given custodial sentence for gas safety offences | What will you be doing for Gas Safety Week?
Fire safety
Fire doors fail safety tests
PRS and B2R
ARMA: Build to Rent will be key to UK housebuilding market | Private landlords still quitting sector says RICS
Legislation
Energy Performance Certificates – have your say
Legal update
National Rail Infrastructure Ltd v Williams
Talking Points
Is a front door common property when it comes to fire risk? | Are you ready for the Insurance Distribution Directive?
Topic of the month - Social Housing Green paper
Events
What’s happening when and where
IRPM News
New government thinking on tenure will be coming our way in the next weeks and months so watch out for updates, says Andrew Bulmer
Rights to land and property go back before the Doomsday book and changing the rules around tenure is a once-in-a-generation experience. While we property managers sweltered our way through the summer, the Law Commission and Government were busy doing some hard thinking. Expect a string of Government initiatives over the next few weeks and months, all landing while we are distracted by Brexit. We will need to stay alert and get involved as Government unveil their reasoning. Your IRPM will keep you right up to date with the latest developments through your monthly update and newsflash bulletins.
When did you last take a look at the Resource Hub? Did you know it has doubled in size, with loads of useful stuff to help you? New content is added every month, so do take a look through from time to time. And if something you need isn’t there, please tell us.
And finally... if you haven’t already done so, book yourself onto your local Regional Seminar (see details below). In addition to the latest essentials and legal updates, there will also be insight on where all these changes are taking us and how it will affect our careers and our businesses. There will be good news here; learn what’s coming and how you might turn it to your advantage. Capping the day will be a lighthearted workshop with some thought-provoking scenarios to pit your wits against. We look forward to seeing you there and enjoying a good catch-up!
Andrew Bulmer is CEO of the IRPM
All members are welcome to attend this year’s Annual General Meeting, although Affiliates are not eligible to vote. The AGM will be held on Wednesday 26 September at Timber Lodge, 1a Honor Lea Avenue, Queen Elizabeth Olympic Park, E20 1DY
The event starts at 4:30pm with registration from 4:15pm and members will have the opportunity to meet and catch up with colleagues over drinks from 5pm.
Please let us know if you are attending – email: [email protected]
The full Notice, Agenda, Directors Report & Financial Statements and Proxy Voting Form can be accessed and downloaded from the members area of the IRPM website.
Regional seminars – don’t miss out
IRPM Regional Seminars are an excellent opportunity for you to update your knowledge, listen to property management experts and network with other like-minded professionals. You will also gain 5 hours’ CPD points!
This year our expert speakers will be giving the insider view on Reinstatement Cost Assessment (Steve Johnson), Cyber Security (Gwilym Lewis) and Violence and property management (Gudrun Burnet).
This year’s seminars will be held at:
- Brighton 13 September
- Birmingham 2 October
- Bristol 10 October
- Manchester 23 October
- London 1 November
Book your tickets now.
In the press
MHCLG finds £400m fund for cladding removal
The Ministry of Housing, Communities and Local Government (MHCLG) has confirmed that the £400m it will provide for cladding removal will come from the existing affordable homes grant funding programme, according to a report in Social Housing.
The department said the money will be replaced in the next funding round, when the current Affordable Homes Programme ends in 2021. The MHCLG will not go into detail on how the funds will be diverted but a spokesperson for the ministry said: “No money will be lost from the Affordable Homes Programme, which remains over £9bn, and it will still deliver the same number of properties.”
There were 304 tower blocks in the UK thought to be clad in dangerous ACM, according to the latest government figures, published in April. Of those, 158 were for social or affordable housing, and in April work was already under way to remove cladding at 104 of these sites. Indications as to the cost of the removal and replacement of cladding vary.
Rental demand highest since last September
Buy to let investors are being pushed out of the market by increasing costs and continued regulatory change, and new landlords are being deterred from entering, according to ARLA Propertymark chief executive David Cox, talking to Letting Agent Today in August. “Last month, an average of four landlords took their properties off the market per branch, up from three this time last year – and as supply falls, competition among tenants increases, which pushes up rent costs. Almost a third saw their rents rise last month, and although this figure was down from June, it’s still far too high” he said.
ARLA confirms that demand from new tenants has reached its highest level this year. The number of new prospective tenants registered per letting agent branch increased from 71 in June to 79 in July – the highest level since September 2017, when there were also 79 per branch. Year on year, demand is up 13 per cent as there were just 70 prospective tenants registered per letting agent in July 2017. Meanwhile the supply of available properties fell from 191 in June, to 184 in July. Year on year, this figure is down four per cent from 192 in July 2017.
Client Money Protection scheme launched by Propertymark
Propertymark has launched a new Client Money Protection system called Money Shield, which has the support of much of the lettings sector establishment according to a recent report in Lettings Agent Today.
Last year, after lobbying from Propertymark and several other industry organisations, the government ruled in favour of mandatory Client Money Protection in England and this is expected to come into effect in early 2019 at around the same time as the letting agents’ fees ban. Propertymark will administer the scheme, which its website suggests will cost around £400 a year.
Right To Rent: date set for full High Court challenge
The government’s controversial Right To Rent policy is to be challenged in the High Court just before Christmas, reported Letting Agent Today in August.
It was announced in early June that a charity, the Joint Council for the Welfare of Immigrants (JCWI) had obtained permission to challenge Right To Rent in court. Now the JCWI has announced this will take the form of a full hearing before the High Court on December 18 and 19.
Right To Rent was introduced in England in February 2016 under the 2014 Immigration Act, but is yet to be implemented in Scotland, Wales or Northern Ireland. Under the Act, all private landlords, or agents acting on their behalf, must check that a tenant or lodger can legally rent a residential property in England. The policy also affects commercial landlords and agents if they handle mixed use properties, such as flats above shops.
The basis of the challenge is that the checks allegedly cause discrimination on grounds of race and nationality and therefore breach the Human Rights Act, and that they should be reversed before any roll out across the whole of the UK.
What’s new in HR?
Data protection self-assessment tools now online
Good information handling makes good business sense and can enhance your business's reputation and save both time and money. You can also increase customer and employee confidence by making sure personal information is accurate, relevant and safe. As a result, a package of data protection tools and resources for small to medium sized businesses has been developed by the Information Commissioners Office (ICO).
You can use the ICO’s new online checklists to assess your compliance with data protection law and find out what you need to do to make sure you are keeping people’s personal data secure. Once you have completed each self-assessment checklist, a short report will be created suggesting practical actions you can take and providing links to additional guidance you could read that will help you improve your data protection compliance.
Go to the Resource Hub to find out more.
Social Housing
Combustible window panels widespread on social housing tower blocks
Research by Inside Housing has revealed the widespread use of combustible window panels, previously linked to deadly fires, on social housing tower blocks across England.
Freedom of Information Act (FOIA) requests sent to all stock-holding councils have revealed at least 117 tower blocks with insulated ‘infill panels’ installed in their window sets. Councils owning hundreds of other blocks said they held no data on whether such panels were installed.
The panels are typically made of combustible insulation, covered by a thin metal sheet. They assisted the spread of flames up the outside of the building in the Lakanal House fire in south London in 2009 and the Garnock Court blaze in Irvine, North Ayrshire, in 1999. The data was obtained as part of an in-depth investigation published in August looking at how the focus on dangerous cladding has allowed a threat to fire safety from flammable window panels to go under the radar.
The full article, entitled The forgotten threat to high-rise tenants can be read here.
Government expects 3,000 Right to Buy sales in Midlands pilot trial
A regional trial of the policy to allow tenants to purchase their homes at a discount equivalent to that available to council tenants has been launched.
The Treasury has provided £200m to cover the discounts, which will average £66,667 if 3,000 homes are sold. Right to Buy discounts are calculated based on how long the purchaser has been a tenant, the value of the home, whether it is a house or flat and how much the social landlord has spent on its upkeep.
The Midlands pilot is being run as a ballot, with tenants given one month to apply for the opportunity to become a homeowner. Successful entrants will then have until spring 2020 to complete their purchase, with the final number of homes sold dependent on the size of the discounts claimed.
A spokesperson for Places for People, which owns 9,000 homes in the pilot area across its group, was quoted by Inside Housing in August, saying it expects around 30% of eligible tenants to enquire about the pilot and 9% to make a formal application. A total of 98 individual providers, including those with the same parent organisation, are taking part in the pilot, which covers 70 Midlands local authorities.
League tables could prove ‘counter-productive’, sector warns
League tables of housing associations could prove to be a “blunt instrument” with “counter-productive” effects, sector leaders have warned (source: Inside Housing).
The proposal, featured in the newly published Social Housing Green Paper (see Topic of the month) would assess landlords against a series of key performance indicators (KPIs). The idea is set to go out to consultation, but leading sector figures have already criticised the plans, fearing that putting a strong focus only on certain indicators could drive the wrong behaviour in housing associations.
Geeta Nanda, chief executive of Metropolitan, said: “If you have league tables, people will focus on the key indicators which are the external indicators and that does not necessarily drive the best service. Post-Grenfell, it has been more important than ever for organisations to focus on engaging with our residents… I don’t know how a league table would show that.”
Paul Hackett, chair of G15 and chief executive of Optivo, said: “The notion is laudable, it is the actual execution of the idea that I think could be more challenging and I think unless this is done properly it could be quite counter productive. “Ultimately I would like to see residents given more information about their landlord, to be able to hold their landlord to account. If another landlord down the road is doing a much better job on repairs then why shouldn’t our residents be able to hold us to account on that?” he said.
Ross Fraser, former chief executive of benchmarking organisation Housemark, warned that organisations could ‘game’ their data, especially if performance is linked to grant. He told Inside Housing: “Unless data collection and validation is approached rigorously, there’s a danger that this will become a crude and cosmetic exercise.” However, Mr Fraser added that the idea could work if it was carried out as a “genuine partnership between the sector, the government and the regulator”.
Health & safety
Unsafe gas work potentially fatal
A Plymouth landlord has been sentenced after gas appliances at his rental property were found to be ‘Immediately Dangerous’. Plymouth Crown Court heard how the gas appliances in the property on Laira Street were worked on by someone who was not registered with the Gas Safe Register.
The HSE found that Lokendra Khadka had failed to ever have gas appliances checked for safety at his rental property. Further, he had arranged for a person to make alterations to a gas boiler flue and that person had left it in an extremely dangerous state. Khadka was unable to provide any details to the HSE or to Plymouth Crown Court concerning who did the work on the gas boiler flue for him.
Lokendra Kumar Khadka of Albert Road, Plymouth, pleaded guilty to breaching Regulations 36 (3)(a) and 36(4) of the Gas Safety (Installation and Use) Regulations 1998 and was sentenced to 15 months imprisonment, suspended for 24 months and ordered to pay costs of £4,904.
Two companies plead guilty following lift death
Two companies pleaded guilty in August following a Health and Safety Executive (HSE) investigation into the death of a five-year-old girl who became trapped while using a lift at her home in Weymouth.
On 13 August 2015, Alexys Brown got into the lift and put her head through a damaged vision panel. As the lift moved upward, her head got stuck between the lift and the ground floor ceiling. Alexys died as a result of her injuries.
Synergy Housing Limited of West Street, Poole and Orona Limited of Europa View, Sheffield Business Park both pleaded guilty to breaching Section 3(1) of the Health and Safety at Work etc Act 1974 and are due to be sentenced at Bournemouth Crown Court on 14-15 January 2019. Charges against a third company, Aster Property Ltd, under Section 3(1) of the Health and Safety at Work etc Act 1974, have been ordered to lie on file.
Landlord given custodial sentence for gas safety offences
A landlord has been sentenced for failing to maintain gas appliances at a rental property and repeatedly failing to provide tenants with a Landlords Gas Safety Certificate. Norwich Magistrates’ Court heard how inspectors from the Health and Safety Executive (HSE) and Gas Safe Register inspected a property at Kings Lynn in Norfolk in 2017 where they found a gas oven to be ‘at risk’ and the gas central heating boiler to be unsafe to use.
The subsequent HSE investigation found the landlord, Mr Steven Ladell, had failed in his duty to have the gas appliances regularly inspected or maintained, and failed to provide a Landlords Gas Safety Certificate for a number of years, all of which are legal requirements. In addition, Mr Ladell failed to comply with an Improvement Notice issued on 13 July 2017 which required he take action to deal with these issues.
Mr Steven Ladell of Great Harwood, Blackburn, pleaded guilty to breaching Section 21 of the Health & Safety Work etc. Act 1974 and breaching Regulation 36(2) and Regulation 36(3) of the Gas Safety (Installation and Use) Regulations 1998. He received a 20-week custodial sentence, suspended for two years, was ordered to carry out 100 hours of unpaid community work and to pay full costs of £4,146.34.
What are you doing for Gas Safety Week?
With property managers’ minds firmly focused on fire safety during the last 12 months, don’t forget that other areas of compliance are important too. The two stories above draw attention to the dangers of using unregistered gas engineers – and not having appliances checked on a regular basis.
Gas Safety Week takes place this year from 17-23 September 2018 and this is a great opportunity to help raise awareness about the importance of gas safety among landlords and their residents. ARLA Propertymark, which is a strong supporter of the initiative, has been quick to point out that gas safety is particularly important for anyone working in the private rented sector, where the safety of gas appliances is often out of tenants’ hands and they are reliant on their landlord or property manager to ensure appliances comply with regulations.
Nearly 1,300 sites were identified as unsafe by Gas Safe Register’s inspections team during the summer due to dangerous gas appliances being found, 18% higher than the number of unsafe sites recorded in the winter months. Despite these findings, a survey of more than 2,000 UK adults found that one in five (19%) would only consider getting their gas appliances checked if they stopped working.
Unsafe gas appliances can cause gas leaks, fires, explosions and carbon monoxide (CO) poisoning and resulted in 201 call outs from the fire and rescue services last year. London was the worst culprit with 277 unsafe appliances found.
During this year’s Gas Safety Week, the Gas Safe Register will address a wide range of gas safety issues, from the dangers of illegal gas work to reminding people to avoid DIY and ensure that only Gas Safe registered engineers who are legally qualified are employed to ensure appliances are working safely and efficiently.
Here are some useful tips for anyone responsible for managing residential properties:
- Know the symptoms of Carbon Monoxide poisoning; headaches, nausea, breathlessness, collapse, dizziness and loss of consciousness.
- If tenants smell gas or think there might be a gas leak, they should call the free 24-hour national gas emergency number immediately on 0800 111 999. Make sure this number is clearly displayed next to any gas appliance sited in the common areas of your blocks.
- Never attempt to work on a gas appliance yourself – and don’t let others try. Always call in a qualified Gas Safe registered engineer who can safely work on gas cookers, boilers or fires.
- Always ask to see an engineer’s Gas Safe ID card before work is commenced. If an engineer is scheduled for when a tenant is in, they too should check for an ID card. Be sure to check the back of the card too, which will state which gas appliances they are qualified to work on.
- You can find a registered engineer in your area by visiting the Gas Safe Register website at www.GasSafeRegister.co.uk or by calling on 0800 408 5500.
More resources
By going to the website and pledging your company’s support to Gas Safety Week, you can download a useful toolkit as well as a range of other resources and tips.
Gas Safe Register also carries a list of FAQs on its website. If you work for an RMC or RTMCo they may benefit from reading these Q&As.
Fire Safety
Popular fire doors designed for use as front doors to flats made by five well-known suppliers have failed fire safety tests and were withdrawn from the market in July.
Communities Secretary James Brokenshire has ordered the suppliers, which include Manse Masterdor and Masterdor Limited, Permadoor, Solar Windows Limited and the Birtley Group Limited to work out how to rectify the problem.
The government tested the doors after it emerged that front doors used in Grenfell Tower, only resisted flames for 15 minutes instead of the 30 minutes required by fire safety regulations. As a result, many thousands of front doors in blocks across the country will have to be replaced. However, In August, the National Housing Federation (NHF) told Inside Housing that “social landlords are struggling to get hold of new doors in the wake of Grenfell and are uncertain about how serious a risk models that have failed safety tests pose”. This is also likely to cause problems for property managers responsible for private blocks.
In the meantime, the National Fire Chiefs Council has advised that the additional risk to public safety is low (source: The Guardian, 31 July 2018). In light of its findings, the government is advising that, in the event of a fire, people should continue to follow existing fire procedures for their building, that smoke alarms should be tested regularly and residents should ensure that front doors are fitted with a working self-closing device.
PRS and B2R
AMA: Build to Rent will be key to UK housebuilding market
Including residential conversions, there were around 258,000 new B2R dwellings delivered across the UK in 2016/17, up by 13% on the previous year. For 2017/18, it is estimated the rate of growth has been similar, with 280,000 new homes being added.
Average selling prices have also been increasing year on year over the same period, contributing towards strong growth in total housebuilding contractors' output, which nearly doubled between 2011/12 and 2017/18, though forecast growth to 2021 is more modest.
These findings are taken from Housebuilding Market Report – UK 2018-2022, recently published by AMA Research. Read more and see the research in full here.
Private landlords still quitting sector says RICS
Private landlords across the country continue to quit the PRS, while tenancy demand rises. In the eighth consecutive quarter that there has been a continued reduction in new rental instructions, the RICS said in August that smaller landlords’ desertion of the sector is now the most striking feature of the property market.
“This pattern reflects the shift in the buy-to-let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector, “said a spokesman for RICS. “Significantly, the drop in instructions is evident in virtually all parts of the country.”
However, the RICS said that its member agents were continuing to report rising tenant demand. As a result of this imbalance, rent rises can be expected and RICS is forecasting a rise of around 2% over the next year and by 15% by the middle of 2023.
Legislation
Energy Performance Certificates – have your say
Over the summer, the Government has issued a “Call for Evidence” in relation to energy performance certificates (EPCs)
The Call for Evidence invites respondents to answer a number of specific questions about the ways in which the EPC regime currently functions and how it might be improved. It also seeks comment on practical and technical matters such as the quality of EPCs and the operation of the open register.
Some examples of concerns which could usefully be addressed by Government include:
- EPCs and lease renewals (where Government guidance is currently ambiguous).
- How EPCs and MEES operate where a developer is leasing a shell and core building and the tenant is responsible for the fit-out.
- Whether it would make sense for MEES and EPCs to fall under the remit of the same Government department.
- The circumstances in which listed buildings require EPCs.
- The difficulties with identifying property addresses on the EPC Register and inconsistent property naming conventions on the certificates themselves.
Go to the government website to respond. The deadline for responses is 19 October 2018.
Legal Update
Network Rail Infrastructure Ltd v Williams
Mark Loveday looks in detail at a case with implications for landowners
The respondents in Network Rail Infrastructure Ltd v Williams [2018] EWCA Civ 1514, Court of Appeal, 3 July 2018, owned two bungalows adjoining an access path and embankment owned by Network Rail which was infested with Japanese knotweed.
The roots (or rhizomes) had spread under the respondents’ land, but had not as yet damaged the buildings on them. The respondents issued proceedings. The trial judge rejected claims for private nuisance based on actual encroachment, but allowed claims based on Network Rail’s failure to eradicate the knotweed because a reasonable landowner was obliged to prevent interference with the quiet enjoyment of neighbouring properties.
The judge ordered Network Rail to abate the nuisance, and awarded the respondents damages of (a) £4,320 each to cover treatment of the knotweed (b) survey costs (c) general damages of £1400 for loss of amenity/interference with quiet enjoyment over a 4 year period and (d) £10,500 and £10,000 respectively for the residual diminution in the market value of the properties even after the Japanese knotweed had been treated.
The Court of Appeal helpfully summarised the principles of the cause of action of nuisance:
- Nuisance is “a violation of real property rights” involving either (i) an interference with the legal rights of an owner of land (including an easement and a profit a prendre) or (ii) interference with the amenity of the land (i.e. the right to enjoy it).
- The various categories of nuisance (e.g. encroachment, direct physical injury and interference with quiet enjoyment) were merely examples of violations of property rights and such rigid categorisation did not easily accommodate examples of novel forms of nuisance.
- The frequently stated proposition that damage is always an essential requirement of the cause of action for nuisance must be treated with caution. In the case of nuisance through interference with the amenity of the claimant's land, physical damage is not necessary to complete the cause of action”.
- Nuisance could be caused by inaction or omission as well as by positive activity.
- The broad unifying principle in this area of law was reasonableness between neighbours (real or figurative).
In applying these principles, the judge was wrong to find there was an actionable nuisance simply because the Japanese knotweed diminished the market value of the respondents’ properties. But the Japanese knotweed carried the risk of future physical damage to buildings, structures and installations on the land. A nuisance was committed in the present case when the encroachment of the Japanese knotweed rhizomes diminished the utility and amenity of the respondents’ properties.
The Court therefore allowed both the appeal and the cross-appeal, with the result that Network Rail was held liable in nuisance.
Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work
Talking points
Is a front door common property when it comes to fire risk?
In August, the government’s expert advisory panel of fire safety advised that the front doors to flats should be replaced if landlords or building managers “suspect they do not meet the fire or smoke resistance performance in the building regulations guidance” with fire risk assessments used “to determine how urgently such doors should be replaced”.
This is sound advice. In the wake of last year’s Grenfell Tower tragedy, fire safety has shot straight to the top of the block management agenda. But as with the ongoing row over the replacement of unsafe cladding on the outside of blocks, the sixty-four dollar question when it comes to front doors, is who pays? As ever with leasehold flats the devil is in the detail, as one IRPM member found out recently, having had the front doors inspected in a London block.
“All the flat entrance doors have been found to be non-compliant,” she explains. “The building is old and many of the doors have been tampered with over the years. So I have asked all leaseholders to ensure their doors are either repaired or replaced and have also arranged for a contractor to provide a quote to all.
However, there remains a question mark over who should pay for the work to be carried out. Can the work be carried out and charged to the leaseholder via the service charge account? The lease indicates the flat entrance doors belong to the leaseholder but as they lead to the common areas (for which block managers are clearly responsible) their non-compliance compromises the fire safety and emergency evacuation of all occupants and visitors.
So where does the law stand on this? What do leases have to say on the matter and how far can property managers go to ensure that all leaseholders replace their existing non-compliant doors with new ones that meet the building regulations and will keep residents and their neighbours safe?
Property lawyer Cassandra Zanelli, partner at PM Legal in Wolverhampton has this to say on the matter. “If the block is old and the doors still meet the regulations that were in place when it was built, then the doors are legally compliant and it may be hard to force the leaseholders to replace them. If however, as this managing agent says, the doors have been tampered with and no longer comply either with pre-existing or current building regulations then the leaseholders are likely to be in breach of the clause in their lease which obliges them to keep their flats in good order.” Where this is the case, the block manager would be within their rights to serve them with a notice asking them to comply with the terms of their lease by replacing their front doors with new doors that meet the current building regulations.
Cassandra believes the best option here is to work in tandem with the leaseholders. Get the residents together and be completely open and honest about the risks to them and their neighbours if the fire doors are not up to scratch, she suggests. “Arranging for a contractor to quote for new doors – and presumably negotiating a decent discount for buying in bulk - seems a sensible way forward and is most likely to keep leaseholders on side."
Unfortunately it is very unlikely that the cost of the doors could be claimed back via the service charge as the doors are demised to the individual leaseholders and are not included in the common parts. “If leaseholders refuse to pay for their own doors, the PM may have to resort to the option of serving notices on them as outlined above,” Cassandra concludes.
If block managers find themselves in a similar situation and have problems getting leaseholders to cooperate, the best option is to bite the bullet and take professional advice on what is allowed under the terms of the lease. Every lease is different and some are more specific than others, particularly when it comes to using service charge monies and reserve funds. An experienced property lawyer will be able to quickly determine what is and isn’t acceptable.
Bradley Parker, MD of fire and life safety specialist Future Fire confirms that block managers are increasingly concerned about the effectiveness of fire doors in the blocks they manage. He has been inundated with enquiries in the last 12 months and thinks this issue is one that will run and run. ARMA has done some work on this too – which may be useful to IRPM members and can be downloaded from our website.
Are you ready for the Insurance Distribution Directive?
Do you deal with insurance as part of your job? If so, read on. New legislation coming into force in October could mean upskilling and increasing your CPD hours to meet the new requirements.
The IDD is the European directive updating the Insurance Mediation Directive that sets a minimum standard for the sale of general insurance across Europe. This forms the basis for regulation in the UK on which the current Financial Conduct Authority (FCA) handbook is based.
The IDD was scheduled for implementation in February this year but in December the European Commission announced that changes to the IDD will not now apply until 1 October. This has given everyone, including the FCA, some breathing space and time to finish the consultation process and finalise the rule book.
First, the IDD re-defines and clarifies who needs to be regulated, by changing from the term mediation (meaning to arrange, advise or bring about a contract to insurance) to the term distribution which has a broader meaning. This makes matters clear, leaving little doubt for unregulated managing agents in that they are acting illegally if involved in the distribution of insurance. Ultimately any insurance brokers currently supplying insurance products to unregulated firms will have to reconsider their position as the IDD makes them responsible for checking that any firm to which they distribute insurance is appropriately regulated.
The second change – and the most significant for property managers - is in respect of insurance knowledge and training. This is particularly relevant to anyone involved in the distribution of insurance. Under the IDD rules - and given the new definition - any regulated firm will need to ensure a minimum level of ability by staff members who deal with insurance. The IDD outlines this level of competence to include: knowledge of the terms and conditions of policies offered; applicable laws governing the distribution of insurance; claims and complaints handling; assessing customer needs; the insurance market; business ethics, standards and financial competence. In addition, all employees involved in distributing insurance need to demonstrate a minimum of 15 hours of CPD in insurance in each 12-month period.
Paul Robertson of Midway Insurance Services has published more specific information detailing the proposed rules at www.1stsureflats.com and has also written a book Robertson’s Insurance principles for leasehold flats. Alongside the book there is a website, which enables property managers to read each chapter and then answer a series of assessment questions, enabling you to demonstrate the required number of hours of insurance-related CPD.
Topic of the month
Social Housing Green Paper
In August, after a number of delays, the government published its long-awaited green paper setting out a range of proposals for reform of social housing in England. The paper, titled A New Deal for Social Housing, is divided into a number of sections and invites observations and comments.
The Hackitt Review, published earlier this year recommended that landlords should have a resident engagement strategy for sharing information about safety and engaging with concerns that residents may have. The government agrees with that assessment and intends to set up a pilot scheme to trial options. In addition, there will be a review of the Decent Homes standard to consider whether to introduce requirements such as an obligation to install smoke and carbon monoxide alarms in social housing in the same way as in privately rented accommodation. Consideration will also be given to requiring homes to meet Energy Performance Band C, insofar as is practical and cost efficient.
In order to tackle effective resolution of complaints, the green paper seeks views on whether the requirement whereby residents who wish to complain to the Housing Ombudsman have to do so via a “designated person” (e.g. their local MP, councillor or tenant panel) should be abolished. This so called “democratic filter” was introduced in The Localism Act 2011.
The paper proposes that social landlords should be required to publish key performance indicators (KPIs), such as to how effective their complaints handing process has been, so that residents can see how their landlord compares to others. The paper also asks whether KPIs could be used to help the government decide which landlords should receive financial support from the Affordable Homes Programme and whether the Regulator of Social Housing should place greater emphasis on consumer satisfaction.
At present, the Regulator only takes formal action against a social landlord which fails to meet consumer standards if there is a “serious detriment” to existing or potential tenants (s.198A, Housing and Regeneration Act 2008). The paper asks whether this is the appropriate standard.
The paper seeks views on the future of grant funding for housing associations and the possible reform of the Housing Revenue Account so as to support further borrowing for investment. It also suggests that local authorities should be able to keep a greater proportion of right to buy receipts to allow authorities to re-invest in new properties. A separate technical consultation paper has been issued on this question. The government is also seeking views as to how best to support or deliver a “best neighbourhood competition”.
The decision has been taken that Part 4, Chapter 2, Housing and Planning Act 2016 (payments by local authorities to central government calculated by reference to the value of higher value vacant properties) will not be brought into force and will be repealed when Parliamentary time allows. Part 4, Chapter 6, Housing and Planning Act 2016 (abolition of old-style secure tenancies and replacement by new-style fixed term tenancies) won’t be brought into force at this time either and nor will the Secure Tenancies (Victims of Domestic Violence) Act 2018 which was designed to ensure that such victims were granted old-style secure tenancies on rehousing. The Localism Act 2011 will, however, be amended so as to ensure that the policy objectives of the 2018 Act apply with equal force to flexible tenancies.
What are the Key proposals in the Social Housing Green paper?
- New 'league tables' of housing providers based on key performance indicators, surrounding services such as repairs and neighbourhood management. This could be linked to housing grant.
- Consideration to scrapping of the current 'serious detriment' test, to allow 'Ofsted-style' tougher consumer regulation
- New home ownership options such as allowing tenants to buy as little as 1% of their property each year through shared ownership. This would only apply to new shared ownership purchases.
- Ditching of plans to force social landlords to offer fixed term tenancies rather than lifetime tenancies in social housing
- Ditching of plans to force councils to sell off their most valuable social housing when it becomes vacant
- The potential introduction of a new stock transfer programme from councils to 'community-led' housing associations
- The return of guaranteed debt funding to help the development of affordable homes, and
- Longer term 'strategic partnerships' for developing housing associations
(source: Inside Housing)
Finally, and most important for IRPM members working in social housing, the government is seeking views as to how to encourage professionalism in housing management. In order to respond and make your views heard, you can download the Green Paper from the government website.
All responses must be submitted by 6 November 2018.
Thanks to Arden Chambers' Housing View for much of the information used in this article.
Events
11 September 2018 - Associate Exam in London & Birmingham
13 September 2018 – Regional Seminar - Brighton
26 September 2018 – AGM
02 October 2018 – Regional Seminar - Birmingham
03 October 2018 - Member Exam Workshop - London
04 October 2018 - Member Exam Workshop – London
10 October 2018 – Regional Seminar – Bristol
23 October 2018 – Regional Seminar - Manchester
30 October 2018 - Member Exam in London & Manchester
01 November 2018 – Regional Seminar - London
ARMA
To book ARMA training courses
IRPM members (associates and above) can attend ARMA courses at the discounted ARMA members rate.
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
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
