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.

No new leasehold houses – but what about the old ones?

No more leasehold houses will be sold in England and Wales, the government said last week. Developers will no longer be able to hold homeowners to ransom by selling their freeholds and doubling ground rents and freeholders will be able to challenge estate management fees. Legislation willbe brought in to ban long leases on houses and ground rents will be kept to a minimum for both new build houses and flats.

No new leasehold houses are to be built – but what do you do if you already live in one?

This is welcome news for new homebuyers but what is being done about existing leaseholders who are already trapped by escalating charges?

There are an estimated 4.3 million leasehold homes in England and 1.4 million of them are houses. Campaigning group the Leasehold Knowledge Partnership believes that this equates to 100,000 families trapped in houses that are now impossible to sell because their contracts are so unfair. According to the Mail Online this week, “more than half of new houses were sold on ‘unfair’ leasehold terms in some towns last year” despite then Communities Secretary Sajid Javid pledging a ban in 2017. This is backed up by figures from the House of Commons which reveal that a total of 3,394 new leasehold houses were sold across England last year.

Communities Secretary James Brokenshire has now promised new laws to take the ban forward, saying “We will legislate to ensure that in the future – unless there are exceptional circumstances – all new houses will be sold on a freehold basis, with ground rents in future leases reduced to zero”.

So far so good. But the problem now, as the Leasehold Knowledge Partnership rightly points out, is that government is in danger of creating a two-tier market in the leasehold sector. Clearly the ban – when it comes –  is a step in the right direction for homeowners. But two issues remain. Legislation takes time, so what happens to those buying homes now? And what is the outlook for existing homeowners? The MHCLG now needs to apply itself to the issues being faced by thousands of families around the country and find a way to bring genuine fairness to the sector.

Leasehold reform – there’s more to come!

Yet more reform is on the table and is set to affect anyone with a leasehold home. Yesterday, the government responded to the Housing, Communities and Local Government Select Committee’s report on Leasehold Reform, and has come out largely in favour of the measures it is recommending.

More leasehold reform is on the way – but how long will it take?

Proposals include:

  • giving clearer information to consumers on how to buy and sell leasehold properties
  • Looking again at commonhold in light of the Law Commission’s recent report
  • working with developers on a standard ‘key features’ document so consumers have clear details of a lease before they buy
  • removing any financial value from future ground rent
  • ensuring the Law Commission is able to properly consider the use of unfair terms
  • updating planning guidance to ensure clear and transparent agreement between developers and local authorities on public areas and utilities to be adopted
  • considering recommendations on permission fees, major works (including a code of practice) and other charges.
  • exploring the best way to challenge unjustifiable legal costs, including looking again at legislation
  • exploring legal changes to forfeiture
  • extending compulsory membership of a redress scheme to all freeholders of leasehold properties
  • implementing improvements to the enfranchisement system as soon as possible

How long will these recommendations take –  and will some end up being watered down along the way? Nothing is certain. But what is clear is that there is now the will at policy level to make life easier for leaseholders. And that has to be good news.

If you are interested in reading the response document in full, you can donwload it here.

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.

How to lease: will the new guide help homebuyers?

A new How to Lease guide for homebuyers, produced by the government, is out now. The leaflet follows a similar format to the How to Rent guide for tenants, explaining the ins and outs of leasehold in a clear, accessible way.

How many times have we all heard leaseholders who have run into problems with their freeholder or their lease, saying they didn’t understand the implications of buying a leasehold property? It happens all the time. Leasehold tenure is complicated and anything that can be done to make it easier to grasp, must be a step in the right direction.

A new guide for leaseholders – will it make an impact?

The Institute of Residential Property Management points out today that under the Consumer Protection Regulations 2008, the government has the power to ensure that basic leasehold terms are included in estate agency sales information. The National Trading Standards Estate Agency Team has a consumer guide for potential buyers confirming that the main terms of the lease are “material information” that “would affect the transactional decision of the average consumer”. It stop short of saying the same to estate agents and the IRPM is lobbying government to ensure that buyers are given this information up front.

“This would mean that buyers would know what they are buying and mortgage valuers would be able to value the property on its true lease terms,” says the IRPM. The professional body is also working with lenders and surveyors to push for this transparency in the home sales process, with support from NAEA Propertymark. Sadly, to-date, the IRPM sees little improvement in the information that estate agents provide to buyers.

So will the How to Lease guide help? If it is to make any real impact, estate agents must be instructed to give the guide to ALL prospective leaseholders with the understanding that they take the time to read it. Ideally, they will talk buyers carefully through the key points. The guide is only worthwhile if they are able to discuss any issues they have with either their estate agent, their solicitor or both – and receive properly informed responses to their questions.

Luxury amenities – what gets your vote?

Today we thought we’d have a bit of fun. What added extras would persuade you to sign on the dotted line if you were buying or renting a new flat?

Developers are busy trying to attract buyers and renters to their blocks by offering a whole range of residential amenities. But some of them are frankly a bit dull, especially if you live in the middle of a town or city. Who needs a gym or a coffee shop when there are plenty to choose from just around the corner? And how many of us will use those treadmills anyway?  When you have the whole of London, Manchester, Brighton or Bradford to eat, drink and be merry in, your block operator is going to have to work a bit harder.

So what gives one block a genuine edge over another? A recent survey by CBRE put concierge services at the top of the list. Practical help with everyday tasks such as laundry, car hire and parcel pick-up and drop off is always popular. So are health-based amenities such as an on-site spa – with health treatments and nutritional advice ramping up more points than just providing a few rowing machines.

Some developers really are going the extra mile, so we did a bit of research to see if we could find some genuinely innovative amenities that would make any residential block really stand out from the rest.

It turns out the Americans really know how to live! Green space and healthy living are on offer at Staten Island Urby in New York via social spaces that encourage residents to get to know each other. The development features an urban farm, a communal gourmet kitchen and a rooftop apiary. The chef-in-residence (yes you heard that right) even hosts gourmet cooking classes and cocktail tastings.

If you prefer animals to people, another New York development features doggy daycare, a grooming spa, cat sitting and a visiting vet for poorly pets.

And in Miami Beach, a sharing room at the Ritz-Carlton Residences gives flat owners the chance to offload their pre-loved good quality items such as handbags, golf clubs and bicycles and ‘shop’ the room, taking what they want in exchange. Great for them, even better for the environment.

Sky Gardens at Wardian, London

Other innovative ideas we came across included an on-site aquarium; providing recording studios and other music-based amenities to allow residents to share their creative ideas; the ‘sky gardens’ and in-house gardening specialists on offer at Wardian in London’s Docklands look spectacular; and we even heard of one block featuring an adult treehouse. That’s certainly not for everyone.

The lesson here, is for block operators to use their imagination and deliver purposeful amenities that enhance living spaces and create community  – not just the same tired old gym.

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?

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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.