Leaseholders who want a greater voice in the management of their building may want to think about forming a Tenants’ Association.
A Tenants’ Association can be set up by a group of leaseholders who own leases from the same landlord / freeholder on similar terms.
Forming an Association is a good way for the flat owners to express their collective views to the freeholder and / or their managing agent.
The association could be a company, but does not need to be. It can be a loose collective of people that want to work together to be recognised in consultation on service charge and management issues.
However, in order to be most effective the association needs to be officially “recognised.”
If the association achieves recognised status then the freeholder/landlord must then consult with the association on any plans for major works and notices (such as section 20 notices) must be copied to it. The association can then use its collective voice in any consultations on future works, or major cost items for the building.
The association approaches the landlord and the landlord agrees to recognise the association. The landlord then confirms this formally in writing. The association is then ‘recognised.’
Any written notification or ‘certificate’ from the landlord recognising the association will continue to be valid unless the landlord/ freeholder gives the association is given six months’ notice withdrawing recognition.
A certificate is usually granted for a specified period of time (normally four years), but it may be renewed at the end of this time. The tribunal can also cancel the certificate at the end of this period if it considers that there is no advantage for the Association to be recognised.
The other way is if a certificate is obtained from the First-Tier Tribunal of the Property Chamber (formerly the ‘LVT’ or ‘Leasehold Valuation Tribunal’). This is much more likely if the freeholder is unlikely to be a willing participant in the recognition of the association.
Who can become a Member of the Tenants’ Association?
Any long leasehold flat owners in the building who are paying variable service charges to their landlord are entitled to be members.
How many flat owners are needed?
As a general rule, the Association will need at least 60% of those flat owners who are entitled to join, to have become members. In other words, if there are 100 flats in the block and all of these are let out on long leases with a service charge, then at least 60 of the flats must join in.
How does the process work?
The formal request for recognition, whether made to the landlord directly or to the tribunal, must include copies of the rules of association or constitution, which should be fair and democratic.
The leaseholders will also have to submit the names and addresses of all of the elected members of the proposed Association with their application.
Can the landlord join?
The landlord and the managing agent are not entitled to become members of the Tenants’ Association. If there are any leasehold owners who do not pay variable service charges, then they can become members of the association, but they are not allowed to vote.
How do we go about forming a Recognised Tenants’ Association?
If you want to form a recognised Association, or to make an application to become one, then the first step is to investigate with your neighbours whether there is sufficient interest to set up an association. You will then need to consider whether to use an incorporated or unincorporated model.
Bishop & Sewell LLP have significant experience of helping leaseholders with these sorts of issues and can assist in the formation of a recognised association and an appropriate application to the tribunal.
For further information on forming an association, or if you already have an association and want to be become recognised by applying to the tribunal, contact a member of our specialist team today by emailing firstname.lastname@example.org or by telephoning 020 7631 4141 and asking to speak to a member of the Service Charge consultation team.Chris Macartney speaking at the Landlord Investment Show – 15th June 2017
Members of the Landlord & Tenant and Property teams will be at the National Landlord Investment Show at Olympia on 15th June 2017.
This event provides a platform for current and prospective landlords to keep up-to-date with industry developments and provide access to experts to gain in-depth knowledge of UK property hot-spots.
Chris Macartney, Partner in our Landlord & Tenant Department will be one of the Seminar speakers discussing ‘What to look for when buying a leasehold property’ in Seminar Room 2 at 14:35 and several members of the team will be on hand to answer questions.
For follow-up or queries please contact email@example.com or telephone 020 7631 4141 and ask to speak to a member of the Landlord & Tenant team.Leasehold Property and Alterations
The website ‘Property 118’ has published Mark Chick’s article on leasehold property and alterations. If you own a leasehold flat or house or commercial premises and want to do works, you should read this first.
A link to the article appears below:
If you would like to discuss any leasehold issues by all means get in touch with our expert team by emailing firstname.lastname@example.org or calling 020 7631 4141 and asking to speak to a member of the landlord and tenant team.Bishop & Sewell listed as Finalists in this year’s ERMAs
The firm are delighted once again to have been shortlisted as finalists in this year’s Enfranchisement and Right to Manage Awards. These awards are independently judged and seek to highlight excellence in enfranchisement. The firm won Solicitors of the Year in 2015 and Mark Chick won the award as Solicitor of the Year in 2016.
To find out more about our award winning leasehold team click here.‘Elim Court’ & Right to Manage – How wrong is right?
Mark Chick highlights a recent Right to Manage case which illustrates how wrong you can get it, but still get it right?
Serving notices has always been a tricky business. The emphasis in legal terms on getting it right is a balancing act between what ‘black letter’ compliance might demand and that which the reasonable layperson might expect common sense commerciality to dictate.
The case of Elim Court (Elim Court RTM Company Limited v Avon Freeholds Limited  EWCA Civ 89) is very interesting, as it really does seem to push the envelope of how wrong you can get it, yet still get it right.
Elim Court concerns RTM and so you might argue that different policy considerations apply – this is a ‘no fault’ right to take over the management after all – any failure in the process can be corrected by serving another notice and here are no economic consequences for the landlord, as unlike in enfranchisement cases, no property interests are changing hands.
However, I think that this case may well be seized upon as a ‘get out of jail free’ card by those next affected by issues of validity in their notices.
During the RTM process a notice must be given to the tenants as to where a copy of the articles of association of the company may be inspected. Three days for inspection must be nominated of which at least one must be a Saturday or Sunday. In Elim Court three days were specified, but none was a Saturday or Sunday.
The court held that the non-compliance with the requirements of the legislation was a trivial failure and would not of itself invalidate the RTM process.
Similarly, for RTM, the notice must be signed on behalf of the company. An issue arose as to whether it had been signed by an authorised member or officer. The notice was in fact signed by an individual (a member) but whose status was unclear as he had signed under a stamp that said ‘RTMF Secretarial’
The court held, nonetheless, despite the confusion the notice had been validly signed.
Lastly, the notice had not been served on an intermediate landlord – a strict requirement of the RTM legislation. The intermediate landlord in question owned a single ‘reversionary’ head lease over one flat only. This secured an equity release scheme. Accordingly, because the intermediate landlord had no direct management responsibilities the court decided that service could be dispensed with.
The previous case law (Mannai) has focused on the ‘reasonable recipient’ test and an emphasis on whether the notice complied or not with a mandatory obligation under statute.
However, this moved on in the 2014 Court of Appeal case of Natt v Osman. The test now is whether parliament would have intended that failure to comply would have invalidated the exercise of the right in question.
Elim may well be confined to its facts – as an RTM case and it is certainly true that RTM has ‘just got easier.’ Will it make a difference in enfranchisement? – We will have to wait and see.
Mark Chick is a Partner and Head of the Landlord & Tenant team here at Bishop & Sewell LLP. To discuss any of the issues raised in this article or leasehold matters generally, please email email@example.com or by telephoning 020 7631 4141 and asking to speak to a member of Landlord & Tenant team.Where should notice be served?
In this article Mark Chick takes a look at the case of Oldham Metropolitan Borough Council v Tanna and the question of whether service on the registered proprietor will be good service.
Click here for further details.
If you have a query about leasehold issues then please contact firstname.lastname@example.org or call 020 7631 4141 and ask to speak to a member of the landlord and tenant teamBishop & Sewell advises on Spinnaker Opportunities IPO
Bishop & Sewell has advised Spinnaker Opportunities, a new cash shell, on its admission to the Standard List of the London Stock Exchange and its Placing and Subscription of over 26 million shares. Admission and Dealings occurred at 5 pence per share on Wednesday 17th May.
Spinnaker is the latest venture of veteran small-cap trouble-shooter turned entrepreneur, Andy Morrison, who is chairman and a leading investor in the business. Spinnaker, which has a highly experienced board and advisory team, is now seeking a reverse takeover and is currently assessing opportunities in the oil and gas sector, mid-stream and down-stream energy and cleantech.
The transaction was handled on behalf of Bishop & Sewell by David Little, Andrew Kavanagh and Gurkirit Gill.
David Little, Partner at Bishop & Sewell, added:
“It has been a real pleasure to help Spinnaker Opportunities plc on this significant step and to see the company complete a successful offering at a time of relative uncertainty in equity markets generally.”RICS CPD Birmingham – 24th May 2017
Mark Chick is speaking at the RICS CPD Day in Birmingham giving a case update on Leasehold Enfranchisement. Any delegates from the day who would like copies of the slides or to follow up on the day should contact email@example.com
If you would like to discuss leasehold issues generally or have a question for our landlord and tenant team please email firstname.lastname@example.org or telephone 020 7631 4141 and ask to speak to a member of the landlord and tenant team.Bishop & Sewell presence at Landlord Investment Shows 2017
We will be present at several Landlord Investment Shows throughout the year in June, September and November. These events provide a platform for current and prospective landlords to keep up-to-date with industry developments and provide access to experts to gain in-depth knowledge of UK property hot-spots. You can find out more details below: