Lots of people may be using the disruptions forced on us by COVID-19 to take a step back from the hustle and bustle of usual routines to take stock and re-evaluate their priorities.
For freeholders and leaseholders, it might also include how you manage your building as well as having a spring clean in the home.
As a freeholder or volunteer director of a Residents Management Company for Right To Manage company, it’s likely you put a lot of effort into looking after both the building and the leaseholders who share it.
Lockdown may have given you the time to assess if you are using your precious time efficiently and maybe conclude that you are expecting too much of yourself and it’s time to share more of the load and galvanise support from neighbours.
Make a list of what you would like to achieve and prioritise. Don’t bite off more than you can chew. As some things can probably wait until next year. We’ve suggested just five below to help get you started.
Most important don’t try and do everything yourself – share the load with your co-directors or co-opt other residents.
And decide what success will look like to you, whether that’s having the company accounts done well before deadline, having 100% service charge receipts in the bank, or finally getting agreement to have the lobby smartened up.
Check the list below for some ideas – you may want to add other goals or create a totally different list.
Whatever you do, make sure your goals are realistic and achievable within the timeframe you’ve allowed yourself.
This is meant to be an opportunity to review and learn – not a marathon ‘to do’ list that will keep you awake at night.
- It can seem a thankless job
Thank yourself and don’t over-commit or accept unnecessary personal liability.
There will always be complaints and issues, in even the smallest block of close neighbours and friends. Deal with them but don’t dwell on them – it’s not you, it’s the building! Take time to ponder on the good that you do and what you have achieved.
If you’re the director of a residents’ management company, ask yourself honestly if you have time and energy to serve another year. Check also that other directors are also willing to remain in office, and what their plans are. If they have retirement plans looming, now might be the time for some succession planning.
Look after yourselves legally and financially too. Of course, you probably cannot (and would not want to) accept remuneration for your work, but you could still face potential personal financial losses. Mistakes can happen, and you deserve the protection of Directors’ & Officers’ Liability Cover1. Your buildings insurance broker should be able to assist in arranging this cover.
When did you last review you the building insurance for your block of flats or apartments? Check that it fulfils lease conditions and that the broker has a good track record searching for an appropriate level of cover for your needs and helping with claims.
If there is an emergency, you will have enough to do without the hassle of claims administration – it’s worth considering choosing a broker like Deacon, with an in-house claims team, and who can help you step-by-step through the claims process.
- Take time to really understand what you have taken on
If you are a volunteer director of a limited company – it has implications for you personally.
There are useful guides from Companies House for directors of property management companies2 set up by developers and for right to manage (RTM) companies3 set up when leaseholders combine to take over the management of their block – usually with a view to controlling costs and managing the building more effectively.
For RTMs, there’s a useful interactive learning tool4 online. It covers the key areas of registration, being a director, record keeping and filing accounts – 30 minutes very well spent.
Remember that failure to file accounts correctly can lead to the company being struck off. That will be neither easy to explain to your neighbours and is likely to be a hassle to put right.
- Review the agreement you have with your managing agent
Is it still fair to both parties? Does it cover everything you need? Are there simmering problems or resentments that need to be put in the open and nipped in the bud?
The Association of Residential Managing Agents provides useful guidance5 on how the relationship should work.
The Leasehold Advisory Service’s information6 also helps on how to approach ending an existing arrangement. The Royal Institution of Chartered Surveyors (RICS) also publishes a guide7 for management of residential properties where service charges ae payable.
- Get the finances 100% in order
Tie up loose ends, take steps to reduce any service charge arrears and ensure accounts are up to date.
Having a firm financial foundation will make management much easier. Everything else follows from this. Make sure your records are up to date, so you can send friendly and timely reminders of overdue charges, but also be prepared to take formal legal action if necessary.
Do make sure your service charge demands are correct: The Landlord & Tenant Act is very specific about how service charges must be demanded8.
Each invoice must be accompanied by certain documents set out in a prescribed format. Correcting errors is time consuming so, even though you may be dealing with the best of friends, but you still need to follow these procedures.
- Start to prepare the ground for major works
Even in the smallest block, a house converted into a few flats, you need to follow the prescribed “Section 20” consultation process9 before you start incurring costs if that is going to involve a bill to any leaseholder that exceeds £250.
Without the consultation, you may find that you can recover no more than £250 per leaseholder, whether you’ve spent £1000 on the communal entrance or £10,000 on a new roof!
The process involves many stages and can take many months – so the sooner you start the better. Check the lease as it may set out specific timescales for big-ticket maintenance activities, such as a requirement for the exterior to be decorated every 7 years. Such big expenses need to be planned for.
Rest assured that if you need to undertake genuine emergency works and it isn’t practical to undertake a lengthy “Section 20” consultation, you can apply after the event for dispensation from consultation.
You’re probably doing all these things anyway – in which case focus on number one and thank yourself for a job well done!
FP564 -2020 [Reviewed June 2021]
The opinions and views expressed in the above articles are those of the author only and are for guidance purposes only. The authors disclaim any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.