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The Block Management Game!

Monday September 7, 2015

Leasehold Law
Leasehold Law

Before venturing into the work of block management I recall spending so much time on the London train I was on first name terms with many of the staff. The reason for my long haul commute was to update myself on the arcane laws and ever changing regulations surrounding block management, where a block of leasehold flats is managed on behalf of the freeholder. I believe the block should be managed on behalf of the leaseholder as well and HPBM does precisely that.

Although the Commonhold and Leasehold Reform Act 2002 paved the way for investors and tenants to determine the way their block is managed, take-up has been low. Many freeholders are London based corporations with deep pockets and expensive lawyers so taking them on appears a David vs Goliath challenge which many people want no part of. Our view is different. David won the fight with Goliath after all.

It is still a little known fact that if fifty percent of leaseholders come together, they may usually appoint their own block management company. The terms of the lease must be adhered to, but with transparency and an open business model, the leaseholders know exactly what they are paying for with no hidden charges, commission or nasty surprises.

London based freeholders often appoint a London based block management company. These companies charge frequently charge London prices. Since the average London property is twice the cost of a similar property in the north east, management company fees reflect this difference. We believe in appointing local reliable contractors, keeping work in the region and offering reasonable costs to our lessees.

We also believe in a reasonable business model. One of the most unfair sanctions in English leasehold law is ‘Forfeiture’. If the tenant is in debt to the freeholder in the sum of £350 or for three years, the freeholder has the ability to take back the flat or house. So for the sake of an overlooked £350 debt, the ‘owner’ can lose a property overnight with no recourse. This sanction needs to be used with caution.

Another potential horror is a leaseholder deciding to do a loft conversion. This is particularly relevant to a recent issue we came across in a Council owned ‘Tyneside Flat’ where the loft space is not included in the lease. The freeholder will charge up to £600 simply to consider the alteration, then charge say £15,000 for the use of the loft space. We recently dealt with a landlord who had a loft conversion carried out at a cost of £65,000 without the necessary consent. The freeholder demanded a further £60,000 for the loft space lease. The total cost of the conversion far exceeded the added value and in sixty years time the refurbished property will revert to the freeholder. Professional advice could have saved a lot of grief in this case.

It is a legal minefield which can often appear to deliberately trap the unwary. But having HPBM’s expert advice and a team of specialists on hand, we are well placed to assist with any issues that your block may be presenting.

 

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Introducing our clients...

I wish to thank you for all the hard work you have been putting in with regards to the management of our block. Living here myself, I have found everything running vastly better. I have received warm and appreciative comments from my neighbours also, congratulating the promptness and professionalism with which you have addressed their issues.

Dr J Jones – Resident Leaseholder

Quite possibly the best decision we made was to involve HPBM in the early stages of our development. The knowledge they have has been invaluable in getting our new block up and running smoothly whilst ensuring the leaseholders are happy with how things are run.

Mr P Smithson – Developer & Freeholder

I think I speak for the large majority of property owners when I say HPBM’s solutions made perfect sense. They put the needs of our tenants and us, as property owners at the forefront of their proposals.

Mr D Humphrey – (Lease Appointed) Management Company Director

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