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.