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Current Legislation

 

The principal Acts of Parliament and changes that are relevant to residential leasehold management are as follows :- 

• Landlord and Tenant Act 1985 

• Landlord and Tenant Act 1987 

• Leasehold Reform, Housing and Urban Development Act 1993 

• Housing Act 1996 

• Health and Safety at Work Act 1998

• Control of Asbestos at Work Regulations 2002

• Commonhold and Leasehold Reform Act 2002 

• Regulatory Reform (Fire Safety) Order 2005

 

Legislation recently brought into force is briefly summarized and considered below :- 

Commonhold and Leasehold Reform Act 2002

The provisions of The Commonhold and Leasehold Reform Act 2002 has brought into force many significant changes including  :-

The introduction of a new Right to Manage, or RTM, which enables leaseholders of flats, subject to qualifying rules, to take over collectively the management duties of the building without having to prove fault on the part of the freeholder or pay any compensation. This allows leaseholders to have a greater degree of control over the level of service charges set, and the option to appoint their own managing agents and select insurers.

The major works consultation procedures which were previously covered under Section 20 of the Landlord and Tenant Act 1985 are now revised under the Commonhold and Leasehold Reform Act 2002.  Also known as Section 20 under the new Act, it is still necessary to consult leaseholders when expenditure on specific proposed terms will be higher than the new statutory limits. 

Subject to these specific expenditure limits, consultation in the new prescribed form applies to such ‘qualifying works’ and also to ‘qualifying long-term agreements’ which are to last longer than 12 months.

There are a number of different stages and consultation periods involved in the process, all being subject to specific and varying requirements. The first stage requires that the landlord issues a ‘Notice of Intention’. Following a consultation period, a ‘paragraph B statement’ must then be issued for qualifying works setting out the estimated costs, again subject to specific details. A further notice must accompany this statement inviting observations from leaseholders. Long term agreements are subject to further and more detailed proposals. Under specific circumstances the landlord must subsequently notify leaseholders once a decision is reached. Such notice being required within a 21 day period giving reasons and responses to observations which have been made.

The Act also brings in to effect increased powers to the Leasehold Valuation Tribunal, or LVT, in its interpretation.  The LVT now deals with the vast majority of service charge and consultation issues and other disputes including :-

Variation of leases

Reasonableness of administration charges

Residential service charges or service charges in estate management schemes

All issues in connection with Right to Manage

Regulatory Reform (Fire Safety) Order 2005

New fire safety rules affecting all non-domestic premises in England and Wales came into force on 1 October 2006, in accordance with the 'Regulatory Reform (Fire Safety) Order 2005' (S.I. 2005/1541, ISBN 0110729455), The new law:

• Emphasises preventing fires and reducing risk

• Makes it your responsibility to ensure the safety of everyone who uses your premises and all those in the immediate vicinity

• Does away with the need for fire certificates

Control of Asbestos at Work Regulations 2002

Under the Control of Asbestos at Work Regulations 2002 employer, the self-employed and those in control of premises all have a duty to prevent exposure to asbestos.  Where this is not reasonably practicable, then they must make sure this it is kept as low as reasonably practicable, and in any case below the specific control limit.

Persons who own or who are responsible for premises must have identified where if any, the asbestos is located in the premises they are responsible for and must have recorded its locations and drawn up a strategy or Action Plan for dealing with it. In many cases, the “dutyholder” is the person or organisation that has clear responsibility for the maintenance or repair of non-domestic premises through an explicit agreement such as a tenancy agreement or contract.

The duty to manage covers all non-domestic premises. Such premises include all industrial, commercial or public buildings such as factories, warehouses, offices, shops, hospitals and schools.

Non-domestic premises also include those ‘common’ areas of certain domestic premises: purpose-built flats or houses converted into flats. The common areas of such domestic premises might include foyers, corridors, lifts and lift-shafts, staircases, roof spaces, gardens, yards, outhouses and garages – but would not include the flat itself. Such common areas would not include rooms within a private residence that are shared by more than one household such as bathrooms, kitchens etc in shared houses and communal dining rooms and lounges in sheltered accommodation.

Further detail is set out in a chart of premises on the HSE website and includes which are likely to be classified as domestic or non-domestic for the purposes of the duty to manage.

There are three essential steps duty holders need take:

• Find out whether the premises contains asbestos, and, if so, where it is and what condition it is in. If in doubt, materials must be presumed to contain asbestos;
• Assess the risk ; and
• Make a plan to manage that risk and act on it.

The duty to manage is all about putting in place the practical steps necessary to protect maintenance workers and others from the risk of exposure to asbestos fibres. It is not about removing all asbestos.   

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