Top Ten Tips For Landlords

We know many leaseholders move out to then rent their leasehold flat. Follow these tips and you won’t go far wrong.  Decorate neutrally  Don’t be greedy…go easy on the rent increases.  Speak to your mortgage lender  Draw up a proper tenancy agreement  Get tenant references  Properly protect the deposit  Check your building and contents insurance  Declare taxable income  Take safety seriously If tenants stop paying, act fast... read more

Managing Agents | Too Big To Care

When organisations get so big it is hard for them to continue to consistently deliver great customer service. And in some cases sheer size means poor customer service. Some large companies: Tesco, Apple, the AA, seem to manage to maintain their customer focus while others (and the interest here is the UK property management sector) like Peverel (who manage over 150,000 homes) and Countrywide (managing 60,000) seem to lose customer service discipline. The irony is that this was never their intention. The net result of this is that there will be a period of de-centralisation in the property management sector as leaseholders focus on getting the service and value they want and deserve. Why Some Big Companies Fail There are four or five really big residential property management companies in England and Wales. Between them they deliver management services to well over 250,000 residential leaseholders, out of a total of 1.6m leaseholders. A decent slice of the pie. Now let’s imagine you’re a senior manager at a property management company with 100,000 homes in management. What do you worry about? Mrs Miggins’ flood at Flat 23 Holborn Court or the macro costs of cyclical maintenance in the South Region? It’s easy to understand how - as property management companies get significant in size - they inevitably lose their eye for detail. I accept Mrs Miggins has a dedicated ‘front line’ Property Manager employed by Huge Property Management Company Limited, whose job it is to serve her immediate needs and wants. But go up the management chain and very quickly Mrs Miggins’ issue - which to her is actually critical - becomes... read more

Residential Block Management: Why Health And Safety Trumps A Striped Lawn

Politics is the art of conflict. The art of Residential Block Management is balancing competing needs against limited resources: a recipe for conflict. It’s no surprise to learn then that the best property managers are also skilled politicians. A great example of this is the conflict that arises over the need for health and safety versus the desire for aesthetics like landscaped gardens and how the most skilled Leaseholders Leaseholders want to see funds spent on those initiatives that look great, and add value to their property: like landscape gardening, new communal flooring, better lighting and so on. What leaseholders want is great internal and external decorations, great cleaning, and gardening. They want their block to look fabulous. They know it adds value and they feel great to have friends and family visit. For leaseholders health and safety law, say, the Working at Height Regulations, comes a distant second when competing with a great looking block. Landlords Like leaseholders, landlords are keen to see work that adds value to their investment. They  like to see initiatives that improve the look and feel of the place. Serious Responsibilities Landlords and Resident Directors (leaseholders who’ve volunteered themselves as Directors of the Management Company) have serious responsibilities, however, and when it comes to health and safety they’re the ones that could end up in the dock if things go wrong. Law? What Law? The legislation around residential residential block company accommodation is strong, detailed, and widespread. The duty on landlords and Resident Directors to evidence compliance is a serious burden. A burden compounded by the sheer volume of legislation: Health and Safety at... read more

Why Is The Leasehold Sector So Complicated?

“Let he who will be deceived, be deceived“ maxim of Roman Law. Is the UK leaseholder sector needlessly complex? Why and to whose benefit? The legislation surrounding leasehold flats is overly complicated. Let’s start by examining the kernel of the leasehold nut: the lease.  The lease is a challenging read. The legalese seems designed to be confusing. Leases are written in English but the grammar is so hard to unpick it may as well be in an unknown language. To make the point here’s a couple of examples from two separate leases: “To do all such works as under any legislation are directed or required to be done on or in respect of the Property (whether by landlord tenant or occupier) not to do or omit to be done any act matter or thing in respect of the Property which shall contravene any such legislation and to keep the Corporation and the Management Company indemnified against all claims demands and liabilities in respect thereof.” What?!! “The Lessee paying the rent hereby reserved and performing and observing the covenants on his part herein contained shall peaceably hold and enjoy the premises for the term hereby created without any interruption by the Lessor or any person lawfully claiming under or in trust for it.” Pardon?!! Notice how the authors of leases don’t do full stops. It’s clear the lease – the legally binding contract between landlord and tenant - is hard to read and understand. Leases, by design, are unwelcoming. They cry out STAY AWAY, and emphasise it with consistent application of a un-customer friendly font (Courier New 12). From the moment you start reading,... read more

Add Value To Your Flat – Stay Put!

This post offers five different investment strategies for leaseholders looking to add value to their flat – without selling. Over the last year or so we’ve seen more and more of our leaseholder clientschoosing to sit tight, not sell, and instead sweat their existing property asset. Here’s our list of the five most popular ways leaseholders are investing in their own homes to add value. The Mortgage Market Before we move on to adding value to your flat let’s just spend a moment understanding the housing market. I do this not because I want to waste your time but because it will help rationalise my investment tips. Right now mortgages are cheap. But to unlock these fabulous deals requires a massive deposit. Usually north of 25%. So on a £200,000 flat you need £50,000. Yep – me neither.  High deposits are a key factor in explaining why the housing market has been flat for the last few years.  The situation is steadily improving; you can now get a mortgage with just a 5% deposit but the deals are much less attractive. How Do You Add Value To Your Flat? What can a leaseholder do to sweat their property assets? Most people haven’t got £50k as a deposit for a great mortgage deal but many have a few thousand which they can spend wisely to add value. Five Sure Fire Ways To Add Value To Your Flat 1.  Extend Your Lease When your lease term runs out your lovely flat is handed back to the landlord. And you get nothing. But there is statutory legislation that gives you the right to extend (by 90 years)... read more

Reduce Your Residential Buildings Insurance

Practical steps leaseholders and Directors of Resident Management Companies (RMCs) can take to reduce their residential buildings insurance. Residential Buildings Insurance Is The Big One Leaseholders will know from experience the biggest cost in a typical block’s service charge budget is the building’s insurance. Given it’s the biggest cost it’s also the most sensible place to start when trying to reduce service charge bills.  Luckily insurance is also the most common area for leaseholders to make significant savings. In most cases the lease will require the freeholder (landlord) to insure the building. The freeholder will then recover the insurance cost from the leaseholders. Often the lease entitles the freeholder to purchase the buildings insurance from whoever he/she chooses and at whatever risk cover they decide. Which makes sense – after all they are the building’s ultimate owner. But often leaseholders feel the rate of insurance is needlessly expensive. The Reasonableness Test Leaseholders who feel the residential buildings insurance charge is excessive can instruct the freeholder or their managing agent to explain how the insurance is arrived at and what is covered. Leaseholders can ask the freeholder, or his managing agent, to demonstrate that the insurance costs are ‘reasonable’. This legal right is detailed in the Landlord and Tenant Act 1985 and is clearly aimed at ensuring the leaseholder doesn’t pay above market rates. A freeholder is duty bound to provide not just a summary of the insurance policy but also the detail of the risks covered and all the associated schedules. Get Your Insurance Docs Leaseholders are advised to write to their freeholder requesting the key documents. Once received it makes... read more

Freehold Purchase – Hold All The Aces

When leaseholders get fed up with their managing agents they understandably want to see real change. They want to see off their existing managing agents and bring in new management. A quick trawl of the internet later and the same frustrated leaseholders find they have two choices: Right To Manage or Freehold Purchase. Both options allow leaseholders to forcibly take control from their landlord giving them the power to hire and fire the managing agents. But out of the two options collectively owning the freehold offers the greater, ultimate power. This article explains how and why. The Advantages Of Freehold Purchase In short Right To Manage has many positives but it does not offer full and outright ownership to the applicant. Freehold purchase does. A flat with a share of freehold is more attractive to buyers and more attractive to lenders – and so on a like for like basis a flat with a share of freehold is valued higher than a leasehold flat. The first thing to say is that freehold purchase is a legal right. If more than 50% of leaseholders express a wish to do it the landlord has to sell. He has no choice. The only negotiation is the price. The Costs The main cost is the expense of buying the freehold itself. This is called the premium. In order to get a sense of the cost of the premium you would need to get a valuation done by a RICS Registered Valuer. (For a free indicative estimate contact Your Home Property Management). The more leaseholders that participate the better because greater participation means lesser individual... read more

Top Ten Tips For Landlords

Here’s our pick of the ten best tips for residential landlords. We’ve been really concise because we know how busy you are! If you have others that you think trump ours - let us know. If we agree we’ll stick ’em on the list. Top Ten Tips For Landlords 1.  Decorate neutrally 2.  Don’t be greedy…go easy on the rent increases.   3.  Speak to your mortgage lender 4.  Draw up a proper tenancy agreement 5.  Get tenant references 6.  Properly protect the deposit 7.  Check your building and contents insurance 8.  Declare taxable income 9.  Take safety seriously 10. If tenants stop paying, act fast Follow these and you won’t go far... read more

Change Your Managing Agent

Leaseholders! You CAN change your managing agent.  This article explains how. Many leaseholders don’t realise they are in charge and can bring in new management. Too many assume the management comes with the block. Getting rid of poor property management companies is not easy. If it were you wouldn’t be reading this. Before we get to the action plan we need to agree first principles: what exactly is bad management? Time and time again it’s the same issues. Over to the Aaagh!-ometer. The Aaagh!-ometer Gripe Aaagh!-ometer Score Failure to answer the phone and respond to messages 9/10 Lack of onsite presence 6/10 Unclear service charge bills 7/10 High insurance premiums 8/10 Poor day to day services like gardening and cleaning 7/10 Not knowing where your money goes 7/10   If your blood is beginning to boil - it’s no surprise. Unfortunately these issues are common. The list reflects our experience as an experienced property management company in London. It also includes some of the leaseholder research conducted for the London Assembly’s report ‘Highly Charged’ –  an investigation into leaseholder service charges in the capital. What Can I Do About Bad Management? Now we know what makes for bad block management what can we do about it? There’s something called the Leasehold Valuation Tribunal (the LVT is a statutory tribunal, a kind of court) which can help, but it generally only tackles disputes between the leaseholder and their landlord - not the managing agent. There’s no established recourse in law to tackle bad managing agents. And, in spite of a call by many in the sector, managing agents have no... read more

Five Quick Tips For Leaseholders

Here’s how to save money on your residential leasehold service charges… Leaseholders can feel ripped off by high service charges.  Here’s five quick tips - in priority order – to help you achieve better value for money.   ONE - CHECK THE LEASE   It’s bad form to use caps lock but number one by a country mile is CHECK THE LEASE. If the lease doesn’t allow it then your managing agent and/or landlord shouldn’t be doing it. A good example might be where the property management company charges an ‘administration charge’ (usually around £100) when/if you seek permission to sublet your leasehold property. Managing agents often chance their arm in the hope the leaseholder doesn’t bother to contest the charge. But a quick look through the lease will confirm if the fee is legitimate. Remember: if it’s not in the lease your landlord can’t charge for it.   TWO - FORM/JOIN THE RESIDENTS’ MANAGEMENT COMPANY   Form a group. Solidarity is stronger than steel. When your landlord/managing agent learns his or her residents have formed an organised group they will take you far more seriously. And take far fewer punts on charging unfair fees.   THREE - LEARN A BIT ABOUT LEASEHOLD   THREE - Get acquainted with leasehold legislation. There’s no need to become an expert – just a broad brush grasp will work wonders. There are plenty of books at your local library plus there’s the internet. Just a little bit of technical knowledge will go a long way in helping you and your neighbours achieve fairness. It’s amazing the effect quoting specific legislation has on your... read more