Frequently Asked Questions 2 - More
Q & A
General Property Management Questions
and Answers
What is
leasehold?
What is
a lease?
What
are your responsibilities?
How
is the building insured?
What
are my responsibilities as a Residents' Management Company Director?
Can
I sub-let my property?
Can
I make alterations to my property?
Can
I keep pets in my property?
Why
do we need a managing agent and what do they do?
When
will VFM visit my development?
What
do I do if I want to complain?
How
to get started?
Current
Legislation.
Getting
Started.
What is a leasehold?
Leasehold flats can be in purpose-built
blocks, in converted houses or above commercial or retail premises.
Leasehold ownership of a flat is simply
a long tenancy, the right to occupation and use of the flat for a long
period - the 'term' of the lease. This will usually be for 99 or 125
years and the flat can be bought and sold during that term. The term is
fixed at the beginning and so decreases in length year by year. Thus, if
it were not for inflation, the value of the flat would diminish over
time until the eventual expiry of the lease, when the flat reverts to
the landlord (although an assured tenancy would then become a
possibility).
The ownership of the flat usually
relates to everything within the four walls of the flat, including
floorboards and plaster to walls and ceiling, but does not usually
include the external or structural walls. The structure and common parts
of the building and the land it stands on are owned by the landlord, who
is responsible for the maintenance and repair of the building.
The landlord can be a person or a
company, including a local authority or a housing association. It is
also becoming quite common for the leaseholders to own the freehold of
the building, although residents' management company, effectively
becoming their own landlord. With the advent of the right to manage, the
lessees will not own the freehold but will be able to manage the
building as if they were the landlord.
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What is a lease?
A lease is a contract between the
leaseholder and the landlord giving conditional ownership for a fixed
period of time. It is an important document and leaseholders must ensure
that they have a copy and that they understand it. The wording of the
leases is usually in legal language and can vary from property to
property. Leaseholders who cannot understand their lease should get
advice.
It is difficult to change the conditions
of the lease after you buy, so make sure that the services provided in
the lease are those that you want or can accept.
The lease sets out the contractual
obligations of the two parties: what the leaseholder has contracted to
do, and what the landlord is bound to do. The leaseholder's obligations
will include payment of the ground rent (if any) and contribution to the
costs of maintaining and managing the building. The lease will probably
also place certain conditions on the use and occupation of the flat. The
landlord will usually be required to manage and maintain the structure,
exterior and common areas of the property, to collect contributions from
all the leaseholders and keep the accounts.
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What are your
responsibilities?
Principally, these will be the
requirements to keep the inside of the flat in good order, to pay (on
time) a share of the costs of maintaining and running the building, to
behave in a neighbourly manner and not to do certain things without the
landlord's consent, for example, make alterations or sub-let. The
landlord has an obligation to ensure that the leaseholder complies with
such responsibilities for the good of all the other leaseholders. These
rights and responsibilities will be set out in the lease.
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How is the building
insured?
The lease will normally require the
landlord to take out adequate insurance for the building and the common
parts, and will give him or her the right to recover the cost of the
premium through the service charges. The policy will not normally cover
the possessions of individual leaseholders.
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What are my
responsibilities as a Residents' Management Company Director?
Your responsibilities as a Residents'
Management Company (RMC) Director are the same as for any Company
Director. Consequently you have statutory and fiduciary duties that must
not be taken on lightly. In simple terms however you will be responsible
for ensuring that the development is managed properly and cost
effectively. To this end you will need to work with your fellow
Directors to agree a budget with the managing agent and to ensure that
you members then contribute on time and in full. You will need to hold
meetings in accordance with statute and ensure that you consult with
your members/shareholders regularly.
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Can I sub-let my
property?
Most leases allow for the sub letting of
the property, subject to obtaining the prior consent of the
landlord/directors of the RMC, which can not be unreasonably withheld.
It is not normally permissible to sub-divide or sub-let parts of the
property. Any resident wishing to sub-let their property should contact
VFM. It is vital that VFM are advised as to whom resides at the property
including contact details as in the vent of an emergency contact can be
established.
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Can I make
alterations to my property?
Most leases and transfers include
restrictive covenants prohibiting alterations to either the plan or the
elevations of the property without prior written consent. Such
alterations will include the replacement of windows, the removal of
internal walls, installing external lights and the construction of an
extension. Residents wishing to make alterations should apply to VFM in
writing detailing the precise works to be undertaken including the
appropriate planes and specification relating to the proposed works.
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Can I keep pets in
my property?
This is dependent on the terms contained
within your Lease or transfer Document. Most Leases prohibit pets or
require written consent of the Landlord/Directors of the RMC before a
pet is allowed to reside in the property. Some older properties do not
include such a restriction.
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Why do we need a
managing agent and what do they do?
Not all properties have managing agents
but most do. Maintaining the common areas, the fabric of the building
and the grounds are important elements in ensuring the value of your
property is maintained. Poorly managed sites deteriorate quickly and
become less attractive to purchasers and the costs associated with good
management are often less than it would cost to manage say a house with
the same services, particularly where your agent has considerable
purchasing power.
The Manager is responsible for ensuring
that many essential things happen at your development and these are
principally as follows:
(i) To make sure the building remains
properly insured, at the right level and with appropriate cover. This
might include engineering insurance for lifts and other plant, Directors
and Officer Liability for Directors of a Residents' Management Company
and of course traditional buildings insurance that will include
terrorism cover together with common area only contents cover.
(ii) To provide basic services on site
including cleaning, gardening, window cleaning, lift maintenance, entry
system maintenance etc. In fact just about any service that your
development requires we arrange. This includes anything from spa water
testing to pigeon control, it just depends on your development's needs
and the services agreed with your developer.
(iii) Health and safety is a major part
of our work to protect you and the people that work on your development.
Typically on a larger development we might arrange an annual Health
& Safety assessment, periodic water testing, dry riser tests, fire
alarm testing, lightning conductor testing, emergency lighting tests, 'mansafe'
or cradle testing, lift testing as well as electrical and gas testing.
In addition we will ensure that everyone who works on your development
is properly qualified and insured.
(iv) All of the above is backed up by an
inspection regime that not only provides a visual overview but will seek
to maintain and indeed enhance the value of your property going forward
by ensuring that contracts on site are all being undertaken in
accordance with agreed standards.
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When will VFM visit
my development?
Generally our contract will set the
minimum number of visits per annum. For most developments this will be
between 8 and 12 times during the year, plus specific visits (usually 3)
to meet residents' representatives. Of course reality often means that
we visit much more that this, particularly in the early days of a
development or where there is a specific matter to resolve.
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What do I do if I
want to complain?
In the first instance it is best to
speak to the Property Administrator or Manager for your property. Call
or email and we will endeavour to resolve any problem as quickly as
possible. If you are not satisfied with your response then we suggest
that write to us detailing the nature of your complaint. We will
endeavour where possible to respond in detail within 10 working days.
All complaints are logged and reviewed by the Directors and if necessary
we will arrange to meet with you in person to find a resolution. We are,
of course, also happy to receive your compliments and any comments about
how we can improve the services we offer you.
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How to Get Started?
Property owners considering a change of
managing agent might be discouraged by the thought of having to devote
significant and very precious time and effort in securing the benefits
offered by new managers.
At VFM we set out to ensure this process
is made as simple and easy as possible for our prospective clients. We
recognise that certain fundamental issues will require client input
however by obtaining information directly from the previous agents we
aim to minimise the need for unnecessary client involvement in the
handover process.
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Current
Legislation.
There are five principal Acts of
Parliament that are relevant to residential leasehold management:
- Landlord and Tenant Act 1985
- Landlord and Tenant Act 1987
- Leasehold Reform, Housing and Urban
Development Act 1993
- Housing Act 1996
- Commonhold and Leasehold Reform Act
2002
The provisions of The Commonhold and
Leasehold Reform Act 2002 are now being progressively brought into force
stages. Among the many changes the Act brings in to effect, is the
introduction of a new Right to Manage (RMT). This 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 new Act is being progressively
implemented and disputes are to be brought before the Leasehold
Valuation Tribunal. Interpretation of the legislation will no doubt
become clearer as decisions are reported.
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Getting Started.
Property owners considering a change of
managing agent might be discouraged by the thought of having to devote
significant and very precious time and effort in securing the benefits
offered by new managers.
At VFM we set out to ensure this process
is made as simple and easy as possible for our prospective clients. We
recognise that certain fundamental issues will require client input
however by obtaining information directly from the previous agents we
aim to minimise the need for unnecessary client involvement in the
handover procedure.
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