Our service to you is changing – for the better!

Last week we blogged about the likely regulation of property agents. Today it’s official. Change is coming. And it should have a positive impact on the way the residential sector delivers services to our customers.

Lord Best has delivered the final report of the Regulation of Property Agents (RoPA) working group. This sets out ways to make property agents more effective, more profesional and more accountable to their clients. For some time, the government has been determined to regulate residential property agents, enforce a mandatory qualification and set out a new code of practice. This will now happen but it will take time. Setting the wheels of legislation in motion is rarely fast – and with Brexit taking up parliamentary time, don’t hold your breath!

But there is now no doubt that regulation is on its way. The initiative has cross-party support and the public want to see change.

R0PA report: In future, only qualified agents will be able to operate in the leasehold sector

So what is being proposed? First, the plans affect all residential agents. That means everyone working in sales, lettings and leasehold/block management and build-to-rent. In his report, Lord Best suggests a new regulator, accountable to the government and responsible for producing a new code of practice for all residential property agents. That means firms AND individuals. A list of “reserved activities” will also be produced and companies carrying out those activities must be regulated and have a licence to operate. Individuals will need a qualification and a licence to practice. The regulator will issue the licences. They can be taken away if businesses or individual property agents don’t play by the rules.

Lord Best also proposes the new regulator should set the syllabus for a mandatory qualification and this should be approved by Ofqual. The suggestion is that sales and lettings agents be qualified to level 3 of Ofqual’s Regulated Qualification Framework and block managers should be qualified to level 4. In English, level 3 is the equivalent of the IRPM’s Associate qualification and level 4 equates to MIRPM.

What all this means is that, as we speculated last week, some agents will need to upskill, while others will be granted a licence to practice based on their existing qualifications.

So now it’s over to government to make this happen. Ultimately the aim is to protect consumers, support an ethical culture throughout the sector, and prevent bad practice. It’s hard to argue with that!

Leak detection – how much could you save?

Do your neighbours have contents insurance? If not, a leak or a burst pipe in a neighbouring or upstairs flat could end up costing you thousands of pounds. To help solve this problem, there are leak detection systems on the market that could be worth thinking about.

The Association of British Insurers estimates that a burst pipe can release enough water to fill 48 bathtubs. Imagine that amount of water flooding through the ceiling of a flat and then think about the damage caused as a result. Sadly, that scenario isn’t an unusual one. Between 2014 and 2016, the total cost of ‘escape of water’ claims rose by 24%. And during the first nine months of 2017, claims like this cost insurers £483 million.

Even a small amount of water damage can mean claiming on insurance to pay for redecoration or a new ceiling

The ABI reckons claims are increasing for a number of reasons. Everyone wants a high spec kitchen with integrated plumbed-in appliances and there are now more bathrooms in new properties. Use of push-fit pipes by the plumbing industry is increasing; and in some cases, pipes are being poorly installed. Whatever the cause, for property managers as well as residents, a serious leak in a residential block is a major headache.

Residents frequently fall out over water damage and insurance claims, which on average are around £25,000 for a burst pipe. Add to this the fact that 1 in 5 UK homeowners has no contents insurance and property managers inevitably find themselves involved in disputes. Many block insurers are now introducing additional excesses for water damage. So leaks add up to a big problem for everyone.

Last month, leak detection specialist Aqualeak produced a new technical guide that explains the way leak detection systems work and the components required. It includes easy-to-understand technical illustrations showing how systems are installed.

Another company, LeakSafe also has a list of frequently asked questions on its website which are a good starting point for anyone wondering if these systems are worth the investment.

Obviously, installation comes at a cost and retrofitting isn’t possible in all existing developments. But if you live in a block that has had problems with leaking pipes – and have paid the price – it could be worth considering. Maybe raise the issue with your property manager or freeholder at your next resident’s meeting.

And the really good news for flat owners – apart from preventing water damage of course – is that leak detection systems can have a positive impact on block insurance premiums.

Rogue agents – your days are numbered

The government is calling time on rogue agents. Compulsory qualification and regulation are on the way. To-date, the property industry has always been self-regulating, with a mix of qualified and unqualified agents out there and government reluctant to get involved.

This is unacceptable – with customers expected to pick their way through a smorgasbord of different property industry bodies, all saying their members are reputable but still, in some cases, giving them enough rope to hang themselves with.

Until now, the argument has been that individual member organisations were capable of regulating their own members and the market would work in favour of professional agents, pushing out the rogue operators. This softly-softly approach hasn’t worked. There has been a race to the bottom, with consumers too often seduced by low fees, finding out too late that their advisers can’t deliver on their promised service offer.

fter relentless lobbying from both industry and consumer organisations, government has tightened up on redress for customers, has moved to protect deposit monies and has finally recognised the need for proper regulation and qualifications for all.

The government is finally calling time on rogue agents

Speaking at a major leasehold event in June, Lord Richard Best, the chair of a working group looking at regulation of property agents, told managing agents that in future their firms will be regulated. They themselves will need to upskill if they don’t already hold recognised professional qualifications. What is certain is that “there will be a Regulator and there will be regulation – we need to sort out the rogues and raise standards,” says Lord Best. “Any new regime will apply not only to property managers but to letting and estate agents as well as to international property agents – with reference to UK sales – and to property guardians.”  

In future, all agents will need qualifications that are recognised by OffQual. Existing qualifications will be ‘grandparented’ or recognised under the new rules but some agents will need to ramp up their CPD or qualifying training in order to meet the new benchmark.

So the days of the cowboys are numbered – thankfully. But of course, all this takes time – two years at least thinks Lord Best. As chartered surveyors, we employ many well qualified and experienced property people at Ringley and we fully support any attempt to raise the bar of professionalism in our industry. We await the final recommendations of the working group with interest.

Balcony fires – don’t take the risk

Is your balcony a fire risk? Following the fire in June that raced through a block in Barking via wooden-clad balconies, the government now has an advice note to block owners and residents. Balconies must not compromise resident safety by providing a means of external fire spread, it says.  Balconies must be included in fire risk assessments. If they contain combustible material then they should be removed and replaced.

Don’t try this at home…

So building owners need to understand the materials used in the construction of balconies on their blocks. This way they will be able to assess whether adequate fire protection is in place to resist a fire spreading both across and through the external wall.  But owners aren’t necessarily either fire or construction experts. So if there is any doubt over the materials used or the risk presented, they should seek professional advice from a fire safety specialist.

Revisions to the Building Regulations introduced in December address the risks posed by balconies. The new regulations require balconies on residential buildings over 18m high to be made of non-combustible materials. But balconies on existing blocks like the one in Barking, may be made from combustible materials, so it is vital for building owners to do their homework properly.

Property managers can play their part by setting out a few simple rules stating what can and cannot be stored and used on balconies by residents. Here’s our advice:

  • Don’t use balconies as storage areas – particularly for anything that might be flammable.
  • If balconies are used as smoking areas, make sure that cigarettes are properly extinguished and disposed of. The same goes for candles.
  • And most important of all, never barbeque on your balcony. A significant number of fires in flats start this way. Not only is it clearly dangerous but your block insurer will take a very dim view of any claim for fire damage resulting from an out-of-control barbeque.

Make sure residents know what is and isn’t acceptable – and why. Use the block newsletter, website, the AGM or a social get-together to drive this message home. And don’t forget anyone sub-letting. It could save a life.

Focus on property management – but make sure you get it right!

Letting agents have been told today, that by focusing on lettings only and not offering property management, they could be losing out on “thousands of pounds of potential income”. New research from outsourcing supplier ARPM, reported in Letting Agent Today, shows that many agents typically offer let-only. By offering a full management service too, ARPM calculates they could boost average annual income by up to 80% per tenancy. That’s big money.

The report reveals an untapped market of almost one million landlords in London alone who only use letting agents to find them tenants – or don’t use one at all. With private rentals expanding across the country year-on-year and many landlords living remotely from their investment property, there is huge potential for growth. And a chance to claw back the estimated £400 per letting that agents are expected to lose as a result of the tenant fees ban.

Property management is not a business to be entered into lightly

But – and this is a big but – property management is a serious business. The government has agents in its sights right now and poor service in our sector is soon to be outlawed by the advent of stronger regulation and the need for recognised qualifications. So, like marriage, this isn’t a client relationship to be entered into lightly.

As chartered surveyors and professional managing agents, we have specialised in this service for many years. Our lettings division Life by Ringley, based in Manchester and servicing clients across the region, has a clear understanding of the differing needs of landlords and tenants. We provide both basic and full management services, with fees clearly stated from the start. Click here to find out more. https://lifebyringley.co.uk/

As well as managing rental property, Ringley specialises in leasehold blocks. Rather than a one-size-fits-all approach, our Blockcare offer has something for everyone from a basic service to fully managed options. Fees are charged according to the level of management you require. Sign-up is easy and almost everything from site reports, minutes, invoicing and accounts can be done online. We can take us much or as little of the hassle out of your management requirements as you want us to.

We even have a tailor-made package for you to use if you can’t afford a managing agent! Click here to find a package that suits your needs https://www.ringley.co.uk/property_management

Access all areas?

Most residential leases include a clause that allows landlords access to flats, if it is for one of the reasons laid down in the lease. Simple enough you might think. Well, not necessarily, as the recent case of New Crane Wharf Freehold Limited v Dovener shows. The question raised here is whether or not a leaseholder who does not give prior permission for the landlord to enter their flat for a legitimate reason, is in breach of their lease.

The terms of the lease in question allowed the landlord access as long as the flat owner was given at least 48 hours’ notice. However, when the landlord gave a time and date to inspect the flat, he heard nothing apart from an email from the leaseholder stating that he wasn’t happy about the landlord entering his property. A second letter was sent, including a new date for entry to the property. Again, there was no reply.

The landlord took the case to the First Tier Tribunal, arguing that the leaseholder’s failure to answer his letters was a breach of covenant. However the FTT disagreed and ruled against the landlord. The reason given was that the lease did not specify that the landlord could only gain access after gaining confirmation that the time and date given was acceptable.

The landlord then appealed but the appeal failed too. Again, the reasoning was that there was no evidence that the leaseholder refused entry at the date and time specified by the landlord and so the leaseholder was not found to be in breach of the lease.

This is a technical point but an important one for landlords. There are two lessons to be learned here. First, when landlords want to access a property, they must think hard about the wording of the notice they issue.

And second, when access is required – and is acceptable under the lease terms – it seems that landlords should go ahead and try to gain entry on the time and date specified in the notice, regardless of whether or not they have received a response from the leaseholder. This is potentially time-consuming but any other approach may end up being even more so, as this landlord found out.

At Ringley we have our own in-house legal department. Our qualified specialists are always on hand to offer advice and help you navigate the complexities of leasehold law. So if you have any questions relating to your lease or any other legal matters, contact us at http://www.ringleylaw.co.uk

What will the flat of the future look like?

s

Fancy a wind turbine on your roof? Well, in a few years’ time, according to Aldous Hicks from Recircle Recycling, you could be seeing them everywhere on the skyline. Climate change is making an impact on the way we live and in future we will be installing a whole range of eco-friendly devices in our homes to help reduce our carbon footprint and ramp up our ability to reduce, re-use and recycle products that we now just throw away. Here are some of Recircle’s favourites.

New storage batteries currently in development promise to unlock a range of in-home energy production methods. Batteries will then be able to store power at a local level and perhaps even distribute power across a community. But what will we use to generate power?

That could be solar tiles – which are a step up from the bulky panels we’re all familiar with because they are smaller and more flexible. They can be retrofitted onto any property with a roof, although the drawback is the low energy production they offer in less sunny countries. So in the UK, we may be stuck with solar panels for a bit longer.

Back to those wind turbines. Imagine fitting an attractive and super-efficient wind turbine on your roof that’s a piece of art as well as generating almost all the power needed. Take the Liam F1 Urban Wind Turbine from Dutch tech firm, The Archimedes, shown above. The spiral design resembles a big rotating flower. At 80% efficiency, it is a forerunner of the high-efficiency turbines of the future.

Something really exciting is the bio-fuel synthesiser. Scientists are now working with microorganisms that can break down organic material and CO2, passing the energy straight into a battery. Food waste and human excrement will feed the machine, providing energy-free sewage treatment and no need for composting. Bio-fuel synthesisers will be fitted to our toilets and waste disposal pipes, turning our organic waste into clean energy.

But what about other kinds of waste? A closed-loop economy means processing products and packaging back into their original form, or equivalent. At the moment, we can’t do this because of the high cost and low-reliability of separating out different materials for recycling.

So ReCircle is working on a home and business appliance to do this. It will use a sensor to ensure different materials are never put together. This means the inherent material value is not lost due to being mixed with other different materials – the major problem with the current recycling system.

The near-pure used-materials are washed, ground or compacted to contaminant-free sized-reduced pure products ready for storage. The pure close-loop recyclable products will then be collected on-demand from buildings when the storage containers are full.

It may even be possible to combine technologies like a recycling appliance and a 3D printer, ensuring that everything you print can be reprocessed into future ‘ink’ to make more products. Individual homes and other buildings could instantly become closed-loop in themselves.



 

Section 21 changes: making them work

Yesterday’s blog looked at the problems that could be caused for the rental sector by the proposal to scrap “no-fault” Section 21 evictions.

The government proposes to effectively make tenancies open-ended while at the same time strengthening the rights of landlords who want to recover their properties by giving the Section 8 process more teeth. Getting this right will make or break the planned change in the law. Get it wrong and the government risks seriously damaging the rental sector – which is already struggling to meet the demand for housing.

The average time it takes for a private landlord to repossess a property via the current system is nearly four months, according to data from the Ministry of Justice published in Landlord Today this week. This is completely unacceptable. All landlords know that eviction of any kind is a last resort. And even official figures point to the fact that only 10% of tenancies are ended by the landlord, not the tenant. All other things being equal, they have a better investment with a long term tenant where there is no void rent loss and less move-in-move-out wear and tear.  But there are legitimate reasons why a buy-to-let landlord may need to evict someone when they have a change of circumstances and that situation must be supported by an efficient court process.

In Scotland, where court reform was rolled out prior to scrapping their equivalent of Section 21, the new regime seems to be working. So paying attention to Section 8 will be vital if the new regime is to be fair to landlords as well as to tenants.

Not surprisingly, there has been a strong reaction to the government’s plans from the lettings sector, with more than 6,000 people responding to the Residential Landlord Association’s survey asking what a post-Section 21 private rented sector should look like – a record response for the trade body. The RLA survey closes on Monday and the results will be used to respond to the government’s formal consultation when it is launched, so go to the RLA website at https://rla.onlinesurveys.ac.uk/possession-reform-ensuring-landlord-confidence-apr-may to have your say.

New building regulations are coming your way

The government is expected to publish draft legislation to deliver new post-Grenfell building regulations by the end of this month. The aim is to ensure that all new buildings, including high-rise blocks, are built to robust fire and life safety standards, reducing the possibility of a repeat of the 2017 tragedy. We hear the new regime could be in place by 2021.

According to press reports, the government is likely to set out proposals for new legislation before the end of May and, according to Inside Housing, certainly before 14 June – the second anniversary of the Grenfell Tower fire. The consultation period on these ideas will probably last around eight weeks.

The proposals will be based on recommendations set out in Dame Judith Hackitt’s review of the building regulations, which was carried out last year, and it is likely that included in the new regime will be:

  • a designated ‘dutyholder’ in every building, who will take on new responsibilities for building safety;
  • A new regulator will be set up to take responsibility for building safety; and
  • Changes to the current rules around building control. These may make it impossible for developers to choose their own building control regulator as they can under the existing regime.

The government is also expected to consult on ways to better engage residents in decisions about their building and address their safety concerns.

The proposal that will have the biggest impact on flat owners and their property managers is the introduction of the role of ‘dutyholder’ or in other words, a building safety manager. Block managers already carry responsibility for health & safety but Dame Judith wants a named individual to be held responsible for the safety of a building and its residents. This could be a property/building manager, a separate specialist or even – with the right training – an RMC or RTMCo director. Until the consultation is published, it is impossible to second guess the way this will go. But one thing is certain, fire and life safety is right at the top of the housing agenda. Whether block managers are in the frame themselves or will be responsible for working with another specialist, they must ensure their skills are bang up-to-date because residents will want to know they are up to the job.

Dangerous cladding will be replaced on private blocks – at last


Dangerous ACM cladding like the type used on Grenfell Tower is finally to be replaced on private blocks

Leaseholders in the 156 private blocks around the country with dangerous Grenfell-style cladding, received the good news last week that the government is to stump up £200 million to pay for it to be replaced. Building owners now have three months to access the fund. The row over who should pay for new cladding on private blocks has rumbled on for almost two years, since the Grenfell fire in June 2017 revealed the fatal flaws of ACM coverings on high rise blocks.

What it also revealed – to the public as well as to those already in the know – is the conundrum at the heart of leasehold: which is that he who pays the piper, doesn’t necessarily call the tune. Or in other words, the flat owners who pay the service charge are not always involved in the decisions that are taken about their blocks. This frequently applies as much to the placement of insurance and the appointment of maintenance contractors as it does to decisions around the specification of building materials. However, flat owners are not building experts. They have to rely on their property managers to do the right thing and involve residents in decision making wherever possible. It is important that they communicate the thinking behind the choices that are made, in order to ensure the best outcomes for residents as well as landlords.

When it comes to cladding – and other major building components – neither property managers nor residents have an input first time round. Those decisions are down to architects and developers who, in turn, must adhere to the building regulations. The choice of replacement cladding will now be under scrutiny from all sides and the government has already told the leasehold sector that the funding announced last week is “a one-time only offer”.  At the last count, there were 156 private blocks around the country still in need of remediation. With £200 million on offer, it’s not hard to do the maths. Price, as always, will be a factor in determining which products are most appropriate.

The other interesting point to note is that buried in the small print of the government’s statement are these words: “As a condition of funding, we will require the building owner to take reasonable steps to recover the costs from those responsible for the presence of the unsafe cladding”. So watch this space – this story isn’t over yet.