Leasehold – it’s not all bad!

A casual trawl of the internet will unearth a wealth of stories and concerns on leasehold property. Does that mean Leasehold is bad? No not at all. All it means is that some have unfortunate experiences and the smart buyer will plan and map out what they need to know and be prepared.

For the first time buyer the whole process can be daunting and exciting in equal measure. You will face a whole raft of new experiences and emotions. How can anyone know everything they need to know? Of course reading this magazine is a great starting point! But where do you go, how do you find out easily and quickly what you need to know?

There is a lot of guides and information that can clear your path for a successful purchase and happy experience in your first home. By giving some simple steps in this article hopefully you can finish wiser than when you read the headline.

Your first port of call will be the estate agents and the developers selling the flat or house. You want to know if the property is leasehold or freehold. Generally flats will be leasehold. This form of tenure has been around for centuries and there is a wealth of legislation covering the obligations and control of the building. There are many professionals who haven’t uncovered all the intricacies and there is always something else to learn. Only recently I discovered it is a criminal matter to not comply with supply of information. Rarely is anyone prosecuted and we always supply information needed so I hadn’t needed to know!

Make sure when looking at a flat you know the length of the lease, the service charge levels, when were the last audited accounts for the service charge completed and how much is in the reserve fund. The reserve fund or sinking fund is there to finance future major works at the building. Armed with these points will give a good steer in the first instance as to how well the building is managed and what it will cost you each year to pay for the running of the building.

If the seller cannot answer these questions easily then you should be cautious on taking the purchase further. However much you fall in love with the home you have to keep heart and head separate and let the head have its day as you start the purchase process. There will be plenty of time for the heart to rule and do cartwheels in your chest.

Once you find the home of your dreams and assessed your payment commitment each year and its affordability then you need to find a lawyer to handle the purchase. In all things it can be tempting to go to the cheapest because it all seems so expensive. This can be a false economy and I do not mean this to be disparaging to the legal profession. There are a number of cheap conveyancing solicitors that will not understand the complexities of leasehold and for the money they charge cannot do a thorough or complete job on any purchase that is not the simplest or most straightforward.

Make sure that you receive a report on title, a copy of the lease, the management information that will have been passed to your lawyer. As unsexy as it is, you need to relax with your favourite beverage and read the papers and the information. Ask questions to have any points clarified. Ensure you understand what you are buying and what your obligations are. Find out online about the people who manage the building. Find out about the developer.

It is very exciting making that first home purchase and everyone should be able to make a sound decision and have full knowledge of what they are doing. Of course there may be issues and problems going along but the more you understand and prepare during purchase the better prepared you will be to overcome and ensure nothing turns into a disaster.

Following simple advice and getting clear guidance can make sure you have a home to enjoy.

News on the Block 15th July 2015 Article

On 9th July there was the latest in the leasehold improvement roundtables hosted by Sir Peter Bottomley and Jim Fitzpatrick at Portcullis House led by Leasehold Knowledge Partnership. The purpose is to look at leasehold issues and explore how and where to improve the issues and how to resolve matters.

It is interesting how much time and energy is going into the search for how to make the leasehold market function better. The number of different organisations looking at professionalising the residential leasehold market is quite extraordinary. Unfortunately it is the bad managing agents and freeholders that create the headlines that highlight the problems. Generally these are the ones not belonging to any organisation or wanting to keep up to date with legislation or best practice.

So the challenge is how the responsible and capable managers and owners can improve the market, and service delivery and rid the leaseholders of the villains and incompetent managers and owners. Personally I feel the only way we can make a difference and keep improving services is to continue to push the boundaries on service delivery and management performance upwards.

If you think about any customer service experience you know good service from bad; if you think about value for money there is an instinct on when something is expensive. However with residential management there will be items of expenditure that the leaseholder may not agree with but doesn’t make the expenditure wrong. For example expenditure on health and safety inspections and electrical testing can be questioned, but is required.

Of course the world is full of different people with different perspectives and appreciations, we ignore that truism at our peril. If you have a row of terrace houses each will be maintained differently. Some will be well maintained to high standard, some will look tatty and unkempt and everything in between. This is because some people are house proud and some are not. Some know they have to maintain their homes and some do not. This same mentality translates into blocks of flats. Save that for the block the manager has to maintain and meet the lease and legal obligations otherwise they can face action from various quarters.

Therefore the profession needs to up its game constantly in communication and management performance. At the same time being a psychologist, behavioural economist, lawyer and counsellor. There is still a long way to go to make the leasehold homes all managed efficiently and effectively but awareness and understanding is the start of the journey.

A-Llama-ing

It is always a colourful golfing day when you embark on a round of golf in your finest Royal & Awesome trews, regardless of what the weather decides to do. It was on a bright day that I found myself playing a 2 ball match against a friend whom I hadn’t seen for ages. A great driver of the ball but somewhat erratic he can give the appearance of playing crazy golf with some of the parts of the course he visits.

Anyway that is not the point of the tale, as fascinating as it is. We had played the first hole with slices into the rough and the sand traps. We caught up with a four ball on the second hole and waited for our chance to hit each shot. At the par three third tee the four-ball nicely let us through, fortunately we both played the hole well. We then strolled up the steep bank to the fourth tee. As we arrived there standing on the path leading to the fairway staring at us was a the strangest animal I had ever seen. It looked like a cross between a cow and a sheep. It turned out to be a naked Llama! When I say naked it was shorn on body and legs with its head fluffy. We stood debating if it was planning on moving or had seen us drive and new it was in the safest place!

He stayed, we drove, he was safe! It certainly gave us a shock and I am pleased to say the rest of the round was uneventful. Save for a comfortable win for me of 3 and 2!

News on the Block 15th September 2015 Article

Over the last nine months I have had a lot of conversations about the state of leasehold management. I have encountered the nuances of the soft side of management. When calls go unanswered, when information is not supplied, when the leaseholder feels they are not getting service are all the soft areas that are vital to the management process of a building.

Although I genuinely believe managing agent’s service has improved over the last five years. There will always be examples of poor service, of agents who don’t do things right, but we have to look at the bigger picture. Not easy for anyone when they are in the middle of a problem or feeling they have an injustice.

Of course if you go into a store and buy something and are not happy that is a lone choice, a lone interaction. With management of a building it is really a community and it is finding a common denominator of service. This will never please all the people and may not please a lot.

Of course I hear those who are complaining on levels way beyond customer service. I have touched on these themes previously and they are a reoccurring every day of the week in my inbox and work with Leasehold Advisory Service.

One of the biggest leap forwards we have made is the launch of the information sheet for potential buyers so they get an understanding of what buying leasehold means from when they first go to look for a property.

Leasehold is not a bad way town a home in a building; it is how it is operated that can cause the issues. I think there needs to be a new perspective given that maybe the managing agents are not bad they are just doing their best. If their best doesn’t measure to your standards then it is necessary to get the perspectives aligned.

For some a restaurant will be great and for others they will hate it. There may been no change in service. You just have to read Trip Advisor to realise different folks have different reactions and expectations.

We have to highlight the bad from the good and it needs the good managers to stand up and shout from the roof tops what should be done to give good management.

The Good, the Bad & the Ugly!

A lot of life is about compromise. Whether it be living with your family, embarking on a cohabiting relationship, or friendships. At any point in time unless you are living in a bubble or are incredibly selfish then all areas and aspects will be give and take. Whether it is as mundane as what to choose for dinner; which film to see; or who has control of the remote for the evening; it all needs compromise.

Some of us are better prepared to handle compromise than others. Some of us are more accommodating than others. And some just go through life downright selfish. Only the other day I was queuing for a delayed tube and a young man thought trying to sneak in ahead of the long queue was appropriate behaviour. The tens of people waiting thought differently and let him know their feelings. But why would someone think such a selfish act appropriate and what in the makeup of a person drives them to want to upset a host of others.

Now the point of this is not to give some moralistic discourse on life’s journey, but rather to give an angle on what it means to live in a home. This may seem a strange comment but you need to stand back and think about community and sharing.

If you are looking at a flat as your first home then it is best to approach it with a view as to a community you are entering. It is a matter of give and take in being reasonable. It would be unpleasant to leave smelly rubbish in a hall way for your neighbours to look and smell when you could take it down to the bin store. If you don’t want it in your flat then fair guess others would not want it inflicted on them.

If you are having a party, alerting your neighbours and having consideration would seem common sense. After all would you want to be disturbed when you had planned a quiet evening? Would you rather be considerate and friendly in handling matters?

The biggest challenge to managers of flats and the common parts is disputes between neighbours. A lot of disputes start out from a trivial matter and then grow out of proportion. What may seem the most important; earth shatteringly important thing at one moment can actually be trivial from another perspective. It is not always possible to see that however.

Over the years I have seen examples of the good the bad and the ugly many times over. When a neighbour is happy to help or a community spirit fosters around sharing and supporting each other is fantastic. This may come from adversity where the leaseholders feel their managing agents are not treating them fairly and band together to resolve. Or it can come from a positive approach whereby there are great community amenities that allow garden parties and community activity.

It is always bad when one of the neighbours creates disturbance, nuisance or annoyance in their day to day living. If they are so inconsiderate that they block hallways with bicycles rather than putting in the cycle store or leave wet umbrellas outside of their flats then this can become an irritant and lead to conflict and contention.

The ugly is the extreme and very rare. When you get a leaseholder who has little or no social skill that leads them to be constantly in conflict or aggressive behaviour then this becomes a real problem. Managing those people is more the work of psychotherapy than common part management.

Of course there are all types of humans in everyday life and you are naturally going to encounter them in the course of flat living. However if you embark on your exciting journey stepping on the home ownership ladder with a spirit of give and take then the experience should be the more fun and satisfactory.

Of course everyone is different and there would be no TV programmes on “neighbours from hell!” without dispute and conflict. These problems arise in houses as well as flats so don’t be put off, just be aware!

News on the Block 10th November 2015 Article

You cannot please all the people all the time! This is one of the truest statements I know. It is certainly true when you are dealing with a large population with the potential for differing views. Anyone who has worked in service knows this and anyone who has tried to lead in anything.

Just think about your favourite team in whatever sport you care to choose. How many times do you disagree with the manager or tactics? How many times do you hear outcry on social media and the press because of this or that happening? Well when you have an apartment block the views and perspectives can be heightened.

The leaseholders will vary from those that care passionately, to those who could care less; to those who want the building kept in the best possible condition, to those who want the least possible spent on the building!

Of course the managing agent’s challenge is to be the conductor to the orchestra that is all the services operating in the building and meeting all the varying aspirations of the leaseholders. It always feels sensible to keep in mind the perspectives of all sides to understand where they are coming from.

This is where LEASE can come to the fore and we are developing new services that will make it easier to avoid escalation of conflict and to reduce the ability to be in long drawn out arguments. Of course if anyone puts their head in the sand or doesn’t want to participate then all the independent reviews and mediation will make no difference.

We are committed to getting better education and services on all sides and we will strive to deliver that. We know we have a long journey to go on and we won’t get everything right or to everyone’s satisfaction. Well we will keep reviewing, monitoring, checking and revising all the while. Our end game is clearly in focus – we just have to find the smoothest path!

Crazy Golf Challenge

I have always been slightly crazy when it comes to challenges or raising money for charity. For instance having never been any kind of long distance runner, I volunteered to run the London Marathon in 1990 to help raise money for the charity. I felt the money raising would be easy even if I finished last in the marathon. My time wasn’t great but I got the bug and ended up doing 7 marathons of which 3 were in 6 months!

So when Sparks (the charity that aids medical research for children) started their longest day challenge I leapt to undertake 4 rounds in a day. It is supported by Royal & Awesome and who could turn down the chance to play some fun, bright golf for a whole day? And how hard could 4 rounds be? I took it a stage further last year and embarked on 4 rounds in the 4 home countries in a day. I succeeded and managed to wear a different pair of funky golf trousers from Royal & Awesome for each round.

So fired up with knowing I could do 4 rounds I started looking for a challenge for this year. I more than found it when I started searching the Guinness Book of World Records and found the record for most golf holes in 12 hours on foot.

I had to carry my own clubs, the course had to be at least 6,000 yards and had to finish each hole. The World record stood at 221 holes and was played on a 9 hole course and played only with a 7 iron.

I started planning and organising in March of 2015 and the more I planned the more sensible it seemed to only use a 7 iron. I played round after round to get miles in my legs and trained and trained to build stamina. The round was planned for Monday 28th September at Fulwell Golf Club near Twickenham. I needed 12 hours of daylight and didn’t want it too hot – that would be crazy golf if the sun were beating down!

The Sunday was not the best preparation as I was ill in bed all day with a fever, I didn’t eat and needed to get the fever out of my system. Not the carbohydrate loading day I had planned!

Come the morning of 28th I set off at 5am to Fulwell and arrived in time to change and prepare myself for a 6.40am start. The 28th offered just 11 hours and 50 minutes daylight. The course were superb in how they had prepared the clubs golfers to know the challenge I was embarking on.

Dressed in my finest Royal & Awesome colourful golf trousers and with my seven iron in hand I ran to the first tee. The ground staff had set up the course to be just over 6,000 yards for me but there was still the distance between green and tee to cover, some of which were quite large.

The next 12 hours hardly flew by but jogging and pacing across the yards I managed to cover 80,000 steps and over 40 miles in the 12 hours. Unfortunately I only managed 169 holes but that is a hole in less than five minutes for 12 hours. Not a bad effort for a 53 year old. I managed some funky golf, some poor golf and a some great golf.

Over £5,000 was raised for Sparks and I was very sore and stiff the next day. I have put the challenge out on the internet and so far I think I have the British Record even if I fell short of the World record. Will I be doing any more challenges? Well that would just be plain crazy golf – and even I am not that daft!

LEASE & what we do

I had the pleasure of attending the FPRA AGM this year and an even greater pleasure to be asked to address the attendees.

I was shocked when I asked how many people were aware of LEASE and only 50% of the hands went up. We have been around for 21 years and I thought in leasehold circles we were well known but clearly we have a lot of work to do in raising awareness. The Advisory service is there for all leaseholders and we are an initial point of call for guidance and direction. The website has a host of information and guidance. It should be your first port of call if you have a query, question, or quandary.

The website is going through a redesign at present and we will be launching the cleaner, crisper, easier to navigate site in the New Year.

We are handling around 35,000 queries a year and we have a few people who make repeated calls with a couple who are up over 200 calls! Also whilst we handle 35,000 calls we are not able to answer a further 35,000. We know this is not acceptable and we apologise to all our callers ho haven’t been answered.

One of the areas that keeps our minds focussed is finding changes and new ways to deliver the service to ensure that we can answer 100% of calls and deliver our service to all who need it. This is an ongoing process and I am sure we will not get everything right first time. However I can give a commitment that we will monitor and measure to make sure that we are improving our service.

The team we have are recognised as experts and the quality of their advice is so highly regarded that lawyers and residential professionals call us to check on matters. Indeed one practitioner trained using our guides and guidance.

One specific question I received at the AGM was why our conference was so expensive. The LEASE conference is on 2nd February 2016 and details can be found on our website. During the day we have a paid for conference which is aimed at professionals in the residential arena but anyone is welcome. In the evening we have a free conference for leaseholders whereby they are informed on topical matters and have a surgery to ask their questions.

In order to deliver the free conference for leaseholders we have to charge a full price for the daytime conference. In looking around at other conferences we seem to be in line and not too high. I will ensure that each year we review the pricing and ensure we are offering value and quality.

Hopefully you will search out our website and find our service. If you can come to the conference you will be most welcome.

How do we solve the leasehold conundrum?

There is a constant debate on what legislative changes will solve all the leasehold woes? Is it making all properties Commonhold? Is it making leaseholders have control of choosing the managing agent? Or is it something else [fill in your own issue]? Well having gone into LEASE and spent a day on the phones and dealing with enquiries I am more convinced than ever that education is the key missing element.

Before you scream at the magazine let me clarify this statement. Obviously there are situations where a managing agent or freeholder acts inappropriately or questionably. Equally there will be leaseholders who will not pay their service charge or behave antisocially. However, these are manmade issues not caused by the lease or the law.

Education in all areas and arenas will benefit all leaseholders to know their rights, their responsibilities and what expectations they should have in terms of management and services. Equally if we can raise the standards of the management then that has to be a good thing as well.

Many agents are now regulated with ARMA Q and many are trying to raise their game, however there are those who are not and those who want to race to the lowest fees and bid down the market for share. Surely it is in the interests of all the good agents to highlight the bad. To raise awareness of what to expect to ensure people know how to address and solve their problems.

From the calls I took working at LEASE there was a mix bag of issues. But what was interesting was that a good percentage of the calls were from leaseholders who owned their freehold. The issues they had appertained to the leaseholders falling out and disagreeing on how the building should be run. Or one director went rogue and was using tied parties to do works and other directors wanted to get control back.

I am therefore not convinced that there is an easy solution or a panacea that would mean everything runs smoothly. In reality as with any service it is about the customer, in this case the leaseholder. As we know a block of flats is a community and the leaseholders are forced together and have to share the burden of the running. In order to do that it needs a consensus from the leaseholders on their aims, aspirations and expectations. If they can’t do that a building has no hope of running smoothly.

At LEASE we are committed to working with everyone in leasehold to improve the understanding and standards. Of course there are changes in the law that would be helpful and developments in leasehold that would be beneficial. It is the combination of all of this that will deliver a robust leasehold sector for the benefit of all.

How to avoid nasty surprises!

As exciting as buying your new home is, (and boy it is very exciting!) you have to be alert to your rights, responsibilities and obligations that you would be taking on when buying leasehold. Frequently we can find ourselves in the “Donald Rumsfeld Scenario”. You will recall his statement of known knowns, and known unknowns but can’t deal with unknown unknowns!

Well for a first time buyer I would suggest that you need to use all the tools you can to make sure that you avoid the unknown unknowns. How do you do this? Well you need to ask questions and ensure that you have the core base from which to inform yourself about the questions to ask.

Leasehold property can be extremely complex and the levels of management services can differ widely. It is therefore very sensible to be informed. If we look at the basics of leasehold this will assist you to get to the questions you should be asking.

Leasehold property is applicable to both flats and houses. It is a type of tenure that is unique to England and Wales and has been around since feudal times. You will own an interest in the property you buy and the rights and responsibilities of you as owner of the lease and the landlord who grants the lease.

The building will be managed by a managing agent who it is worth checking if they are members of ARMA Q or regulated by the RICS, organisations that are raising standards in property management and regulates their members. If a managing agent is not a member of ARMA Q nor regulated by RICS then it is worth checking what procedures and disciplines in place for complaints and enquire of the standard of services supplied. The estate agent or developer should be able to advise on who is managing, what the service charge budget is and what the main lease terms are.

By gaining the basic facts you can then have clarity and knowledge on what your outgoings will be. Whatever property you buy be it freehold or leasehold, you will be responsible for maintenance and running costs; the only difference with leasehold is that this will be organised for you by the managing agent and recharged to you. There is a wealth of legislative protection to assist you to ensure what you pay is reasonable.

Of course if you buy a freehold property you get the choice on how well you maintain your house – which is why when you walk along a terrace of houses some will be maintained brilliantly, some appallingly and a whole range in between. This is the individual’s choice. With leasehold you do not get the choice. It is a factor of how well managed the property is and the standards that are decided to be maintained.

You may get a say but equally you may not in how the building is managed. This is dictated by the lease or whether leaseholders have got together to take control. No one person can know everything in leasehold and it is appreciated the complexities. However there is a lot of advice and guidance available for you and www.lease-advice.org is the best place to start. If you have your eyes open then you can enjoy the excitement and pleasure of your new home and avoid nasty surprises.

Buying leasehold is not scary if you do your homework. But with any property you should make sure you know what you are getting into. That is only sensible. It is your largest purchase at any time in your life (except when you have earned millions and decide to go for the Lear jet and super yacht!) and you would surely do checking if you bought a car and would want to do the same for your home.

Make sure the excitement of buying your new home travels through to delight in living in your new home and keep your eyes open. There is advice out there for you.