In self-managed blocks of flats, the responsibility of handling various requests falls on the managing entity, the directors of the freehold management company. Such requests will from time to time include requests from leaseholders seeking lease extensions; that is unless all leaseholders bought the freehold together and during the conveyance to acquire the freehold simultaneously granted themselves all 999-year leases.
In recent years, the block's property management landscape has witnessed a transformation. At London's leading managing agent, The Ringley Group there is a growing emphasis on affordability and accessibility for leaseholders, particularly those residing in small blocks of flats. "We've known for some time that managing agents need to innovate and evolve", says our founder Mary-Anne Bowring. "We thought to imagine a future where a budget-friendly blocks property management offering exists to manage the service charge for apartments in blocks of flats - and so we just did it".
In the realm of UK leasehold law, service charges play a crucial role in maintaining and managing leasehold properties and the blocks of flats, they sit in. However, there are instances where the demands made for service charges may not be legally valid, leaving the freeholder or the resident's management company, or the right to manage the company shortly. Here we aim to explore the consequences of invalid demands and shed light on the tests used to ensure the legitimacy of service charge demands under UK leasehold law.
In this article, we aim to provide insights into the challenges that owners may face when self-managing a block of flats. The actual challenges will of course vary depending on factors such as the size of the property, the level of experience and expertise among the owners, and the dynamics within the community.
Residential service charge disputes can arise between landlords, property managers, managing agents, and leaseholders or tenants. Sometimes it requires legal intervention to resolve outstanding service charge debts. In the UK, there are two primary avenues for recovering service charge arrears: the First-tier Tribunal and the County Court.
When self-managing a block of flats and serving as a director of the freehold management company, residents Management Company, or right-to-manage company, it is essential to understand the legal responsibilities that come with the roles. Directors when acting as the competent landlord or the party responsible for managing the block of flats, have obligations under both contract law, i.e., the lease, under landlord and tenant law, as well as UK company law. We will explore the key responsibilities and duties that directors must fulfill under these legal frameworks.
Responsibilities under Lease, Landlord, and Tenant Law:
One of the basic conditions of a lease is the payment of a service charge. Members of the freehold business holding leases have shares that can be transferred to a new lessee upon the sale of the flat. They must handle two different legal connections. The first one is between the business and the shareholder, and the second one is between a renter and a landlord. These two legal ties are necessary for the leaseholder's service charges and reserve funds to be paid. The leaseholder may be required to pay fund reserves to an RMC or a landlord corporation. The Landlord and Tenants Act of 1985's Section 18 does not permit the leaseholder to reject the request for paid reserves. It is not legally required for the RMC to request a reserve fund service charge.
When self-managing small blocks of flats, one of the key responsibilities of the community is the collection and banking of service charges. Service charges have to be collected to fund ongoing maintenance, repairs, and management of the property. However, understanding the rules and regulations surrounding service charge collection can sometimes be complex. In this article, we will delve into the guidelines and best practices for collecting and banking service charges for those who self-manage their small blocks of flats.
In the UK, litigating and collecting service charge debts involves navigating specific civil procedure rules. Here we aim to provide a comprehensive guide to the procedures and regulations that must be followed when pursuing such cases in UK county courts. Understanding these rules is essential for landlords, property managers, resident management companies, and right-to-manage companies so they can effectively handle service charge disputes. Here we discuss the key steps involved, from pre-action protocols to trial, ensuring a clear understanding of the process.
Pre-Action Protocols
Before commencing legal proceedings for a service charge debt in a UK county court, it is essential to adhere to the pre-action protocols. By design, these protocols aim to encourage early resolution and avoid unnecessary litigation. The specific pre-action protocol for debt claims outlines the steps, such as sending a letter of claim to the debtor, providing a detailed breakdown of the debt, and allowing a reasonable time for the debtor to respond. Compliance with these protocols shows a genuine attempt to resolve the issue before resorting to court action.
When managing a block of flats, leasehold property owners have two primary options: self-management or appointing a managing agent. Each approach comes with its own set of advantages and disadvantages. In this article, we will explore the pros and cons of self-managing your block of flats versus hiring a managing agent.
Thank you
