The Management Service You Can Expect in Your New Home
The Management Service You Can Expect in Your New Home Introduction As the purchaser of a new house or flat where there is a managing agent and a service charge or rent charge you may be wondering what you are paying for and what level of service you can expect. This booklet is intended to be a helpful guide that will answer most, if not all, of your questions. You should also be guided by your lease or Transfer to see what you and your neighbours are responsible for. Effective property management requires that you the resident and your agent work closely together; you do not know us just as you do not know your neighbours, yet we all need to communicate regularly, understand each others problems and remember that we are on the same side, with the same goal of achieving a well maintained and harmonious development that we are all proud of, and you are proud to call home. Page 1 of 16
Contents Introduction Page 1 About Us Page 3 Duties of the Managing Agent Page 3 Enquiries Page 4 Regular Services Page 4 Residents Choice Page 6 Repair Liability Page 6 Building Insurance Page 7 Interest of Mortgagees Page 8 Insurance Claims Page 8 Pets in Flats Page 9 Sub-letting Your Flat Page 9 Parking Page 10 Noise & Nuisance Page 10 Out of Hours Emergencies Page 11 Accounting System Page 12 The Service Charge Estimate Page 12 The Year End Accounts Page 13 Reserve Fund Page 13 Service Charge Payment Page 13 Service Charge Payment FAQ s Page 14 Page 2 of 16
About Us Hazelvine Limited is a specialist property management company whose business is the management of communal areas of blocks of flats, housing estates or mixed use developments. We aim to provide a professional standard of property management and to ensure that our developments are managed in accordance with the leases and Transfers, the wishes of the majority of residents and at a cost which is reasonable and offers value for money. We manage new developments for a few select clients only. We are independent of any developer for whom we act. Our management activities and related accounting procedures are governed by statute and we comply with the Code of Practice for Residential Management prepared by the Royal Institution of Chartered Surveyors. For our clients' protection we also ensure that we have sufficient professional indemnity insurance cover for our activities. We hold a lot of funds on behalf of residents. For your protection, all funds are held in separate client accounts for each development. All accounts are Trust Accounts, in accordance with Section 42 of the Landlord and Tenant Act 1987. All funds held in trust earn interest, for the benefit of residents, at 0.5% below base. As a separate service, we can act as director or company secretary of your residents management company, where applicable. Duties of the Managing Agent Management is far more involved than most people think. We list below some of our duties:- Maintaining a full financial service to calculate and collect service charges, making payments to contractors and service providers, producing estimates and annual reports etc. Prepare, tender and supervise contracts for routine servicing Dealing with questions, queries, complaints etc. from residents, solicitors and others Dealing with work requests, work orders and contractors to ensure maintenance of the building/development Carrying out routine inspections of all sites Dealing with all insurance matters relating to the structure of the property (where we are responsible for placing the insurance), public liability, plant insurance etc Page 3 of 16
Meetings with residents and residents' associations to discuss the management of their development Drawing up specifications, obtaining tenders and supervising major and non-annual works (at an additional fee) Carrying out referenda, producing and issuing newsletters and other similar communications to gauge resident's views on proposals affecting the building/development Dealing tactfully with neighbour disputes Enquiries For normal management matters please make contact with your property manager who will be able to assist you. Where your question relates to an accounting matter, this should be directed to the accounts department. You will be advised of actual names in specific communications from us. Regular Services Most blocks of flats have some or all of the following services provided:- Cleaning Communal Areas This would normally be carried out once per week or once per fortnight and would cover dusting, damp wiping, hoovering and cleaning of glass to internal doors and fire screens. We have a standard specification which is available separately. Wall marks Where possible these can be dealt with during normal cleaning visits. Where walls are badly marked/scuffed a special clean or redecoration may be required which would be subject to a special order. Bin Stores These would be swept and disinfected regularly (normally once a month) during the cleaner's visit. For this reason, we try and arrange the cleaners visit to follow the dustmen s visit. Eurobins/Paladins These would not be part of the cleaners regular responsibilities but if cleaning were required, would be dealt with by separate order. Communal Part Window Cleaning This is usually done once per month. We do not normally arrange cleaning of individual flat windows unless the lease stipulates the contrary. Page 4 of 16
Carpet Cleaning The common parts cleaning would provide for weekly hoovering and spot cleaning. We do not normally arrange for a shampoo of the carpets on a regular (annual) basis but action as and when necessary. Path/Parking Bay Sweeping This would normally be carried out by the gardener. Graffiti A specialist company will be called in whenever required to remove graffiti quickly so not to attract further graffiti. Where possible, longer term solutions will be found such as planting or trellis work. Garden Maintenance During the growing season (March - October) there would be attendance by the contractor either every week or every two weeks. During the winter this would reduce to once per month. The specification includes grass cutting, weeding of beds, leaf clearance, etc., whilst hedge cutting and shrub pruning would be carried out 'as and when' required. The contract would not cover planting or replacement of plants. These would be dealt with by a special order. Watering during drought periods or dry spells is not part of the standard contract. When a development is first built, the show area may have lots of annuals, pots and hanging baskets. These would not normally be the specification planting and when the site is completed, they would normally disappear and be replaced with low maintenance ground cover green shrubs. We have a standard specification which is available separately. Building Repairs These would be dealt with as required and according to priority. Electrical Maintenance Emergency lighting, fire alarms and smoke detectors are often provided and maintenance contracts will be entered into for all such installations under Health & Safety Requirements. Lift Maintenance (where fitted) A contract is entered into for routine maintenance and emergency call-outs for breakdowns. This is normally a basic contract as most of our lifts are new but this is kept under review each year. Door Entry System / TV Aerial Maintenance These are not normally subject to a maintenance agreement as we find that the costs do not warrant it. They are dealt with on a call out basis when a breakdown occurs. In some blocks these are subject to Page 5 of 16
a rental agreement which would normally include dealing with breakdowns caused by defective components. External and Internal Decoration This work is carried out periodically according to the decorative finish which has been used and the level of wear and tear. Normally, external decoration would be dealt with on a three to five year cycle and internal decoration on a five to seven year cycle but the leases and Transfers will detail what is required. Where the current decoration is particularly poor, we would consider, in discussion with residents, bringing the work forward. With lots of buy-to-let properties where tenants frequently move in and out we often carry out regular touch-ups rather than more thorough redecoration programmes at longer intervals. Electric Pumps/Electric Gates Maintenance agreements will be put in place for regular/routine maintenance. Engineering insurance would only normally be put in place where the site also has a lift and the insurance is a statutory requirement, otherwise the cost is prohibitive and not value for money. Residents Choice Most services provided by us at your building can be changed to accord with the wishes of the majority of the residents. It is your home and you know what services you want provided. Clearly in order for us to vary the servicing, we have to be sure that the change does represent the wishes of the majority, and accords with our legal obligations and the obligations within the leases and Transfers. Residents Involvement Residents Association Committees The best forum for discussing service levels and costs is a Residents Association which has a strong membership and a mandate from the flat owners. We welcome the formation of such associations as it provides us with a focal point and a body with whom we can plan changes. We are happy to assist in its formation Garden Committee We firmly believe that to get the most out of your gardeners, one or more willing individuals should be given the authority and responsibility to instruct the gardener during each of their routine visits through the establishment of a gardening committee. Their time, which has been paid for, can then be directed as residents require, rather than the grass getting cut every visit, regardless. Repairing Liabilities Page 6 of 16
For flat owners the repairing liabilities of both the resident and the managing agent are set out within the lease. These can basically be summarised as follows: The Resident (You) You are responsible for all matters within the flat itself plus the repair of any pipe, wire or drain which may be outside of the exterior of the flat but which serves only your flat (often called serves exclusively the demise in the lease). An example of this is the waste from your kitchen sink right up to where it meets the waste stack or main drain serving both your flat and other flats including the connection. It may be that your flat suffers damage due to problems from another flat e.g. water leakage from the flat above. This would be your responsibility, although the cost involved may be charged to the insurance policy for the building. The division of responsibility is detailed within your lease document and shown stippled or hatched on your legal conveyance plan, or red/blue edged on your plan. The Managing Agent (Us) On behalf of all the residents and at a cost to the service charge fund, we are responsible for arranging all repairs and maintenance of the building, all communal drains and rain water gutters and pipes, the surrounds of the building and common areas such as parking, courtyards, paths, driveways, gardens, electric gates etc. If you are ever in doubt about the repairing obligation or liability on any item, your manager will be pleased to advise. Building Insurance For most flats, the building insurance is arranged by us through a Block Policy, a summary of which is available upon request. There may be some blocks where the insurance is arranged via the freeholder and if yours is one of those, the details below may not apply in full although the general principles should be the same. This does not include contents insurance which each lessee will have to arrange separately. The insurance policy covers the following risks to the building (known as Insured Perils): * Fire / Flood / Storm * Subsidence or heave - subject to certain conditions * Vandalism - subject to certain conditions * Theft and/or attempted break-in - subject to certain conditions Page 7 of 16
* Escape of water (e.g. water leak from a tank or an appliance such as a radiator or washing machine) * Accidental damage to sanitary ware and fixed glass * Collision with the building by a vehicle * Third party and public liability cover * Terrorism insurance should also be arranged separately and is something we do as standard On housing sites, usually third party insurance is all that is arranged to protect residents for claims should someone be injured on the communal grounds. Hazelvine earns commission on the insurance it places which covers the arrangement of the policy, annual quotations prior to renewal and dealing with claims. Where insurance is arranged by your freeholder, you will need to deal with them or their agents with any claims or general insurance matters. Interest of Mortgagees The interests of all lessees and their mortgagees is automatically noted under a general interest clause of our Block Policy so will not be specifically noted. Insurance Claims Each lessee is an insured person under the terms of the policy and as such if you have a claim which relates to your flat - or those conduits which serve your flat - you have to complete a claim form, obtain two competitive quotations and arrange to have the work done. Where there is a claim which affects the communal areas, the structure or several flats within the building, then we would deal with both the claim and the works required. In both cases, we will progress the claim where we arrange the insurance. Sometimes Hazelvine can provide a quotation from its maintenance department if you do not know any local tradesmen. The procedure for making claims is as follows: You contact us and we will either send a claim form to you for completion, or we will direct you to our website where you can download one. If you carry out the work before acceptance of your claim you do so at your own risk, except as noted below. When the claim has been approved you have to pay any contractors employed by you and forward the original receipt to us. This is then forwarded to the insurers for reimbursement. When large Page 8 of 16
amounts are involved the insurers will normally pay the contractor direct upon receipt of a satisfaction note. Where works are of an emergency nature either to secure the premises or to prevent further damage you will usually receive a verbal authority to proceed with essential works without the need for an estimate for that part of the works. When the damage to your flat is to such an extent that the flat is uninhabitable, the policy provides cover for alternative accommodation. It would be for you to negotiate with loss adjusters the type of alternative accommodation to be provided. Buildings Insurance Policies include a loss of rent provision. This covers the freeholder for loss of his ground rent, it does not cover the rent due to a leaseholder who is sub-letting their flat Pets in Flats Some leases have an absolute ban on any pets or on certain pets. Other leases allow pets provided consent is obtained beforehand. In these cases a written consent is required. We are not normally concerned about fish, caged birds etc. Where you wish to have a cat or dog, please write to us for consent. In the case of a dog, we would normally require a photograph to ensure it is a breed which is consistent with flat living. The written consent is given by way of licence subject to what are termed good neighbour conditions as follows:- Only one cat or dog per flat would be permitted (for a dog it would be restricted to that shown in the photograph) No noise or nuisance must be caused to other residents No cat flaps are allowed and cats must not be permitted to roam the communal areas of the building Dogs must not be left alone in the flat for long periods of time and when within the building or grounds, they must be on a leash They must not be allowed to foul the grounds or common parts of the building (in the event of an accident we would expect the resident concerned to clear away any mess as cleaners are now reluctant to deal with this due to Health & Safety at Work Regulations) Any breaches of these conditions can result in the permission being withdrawn. We charge a fee for dealing with pet licences Sub-Letting Your Flat If you wish to sub-let your flat, some leases state that you should obtain prior written consent or that the subtenant should enter into a direct deed of covenant to ensure that the sub-tenant complies with the general Page 9 of 16
terms and regulations contained within the lease. downloaded from our website. A standard application form can be sent to you or In order to protect the other residents in the building and to comply with the terms of the lease, references may be required and the letting must be to a specific person(s). In some cases we may not be able to accept a proposed letting to say, a local authority or a short term holiday let. You will be required to pay reasonable costs for the preparation and completion of the deed of covenant and an administration cost to us for dealing with the matter. These fees are set out within the application form. Before you consider sub-letting, please make sure you check with your building society, bank or other lender to see if they have any rules that you have to follow. Parking The leases/transfers will determine if parking spaces are allocated or demised. Allocated Parking/Demised Parking A major source of neighbour disputes is parking. Most developments allocate one or more parking spaces to each flat or house and these are shown on the conveyance plan. Residents should ensure that they only park in their allocated space(s), leaving any other car outside of the parking area. Second cars must not be regularly parked on visitor spaces. Car parking spaces are either demised, in which case you own your space for the term of the lease, or allocated, where the freeholder or manager owns the spaces and you have the right to use the one allocated to you. Visitor spaces are for visitor s vehicles only and leases/transfers state that they are available for visitor s short term parking. We interpret this as meaning not more than a day or overnight. As the managing agent we cannot protect a resident s individual space (where demised) and if any vehicle parks upon it the only person who can take action is the leaseholder who owns that space. If you want to protect your space by erecting a drop-post, prior written consent must be obtained. Our policy is that the first post used on a site must then be used throughout to maintain the aesthetic appearance of the development. Where there is abuse of the visitor s parking spaces we would take action against the abuser or, if it was a dumped car, we would locate the owner via DVLA - although this process can take up to one month from notification of the registration number. We cannot deal with dumped cars on a resident s private space. Page 10 of 16
Noise & Nuisance Noise from T.V s, stereos, parties, guests leaving, etc. can be very annoying - particularly late at night. Nuisance can be caused by undertaking activities which do not accord with the community spirit. Carrying out major repairs in your parking space; leaving a derelict car in the parking court; abuse of the visitors spaces; not taking correct control of your pets and erecting satellite dishes are all examples and are matters about which we regularly receive complaints. We do not wish to become involved in inter-neighbour disputes unless this is unavoidable. A time may however arise where you feel we have to become involved. In those instances we would require the complaint in writing with evidence that you have tried to deal with the matter directly with your neighbour first and verified by at least one other - and preferably two other - flat owners also in writing. Initially we will write to the lessee concerned advising them of the complaint - but not the complainants and requesting that the activity ceases. If this is not successful, then solicitors would have to become involved. We would then ask you for security for their costs as provided for within the lease. This would normally be an initial sum of 500 but would increase if the matter had to go to court. You and other flat owners affected must also be prepared to give evidence in court to substantiate the nuisance claim, otherwise it cannot be pursued. Out of Hours Emergencies In common with other managing agents, our offices are open Monday to Friday during normal business hours. Outside of those hours, we have a FAX machine, answerphone or email address for you to leave a message. When the office is closed, if an emergency should arise you should make arrangements as below and/or as may be indicated on the Management Notice Board within your block and advise us when we re-open. Please also ensure that the problem is an emergency and not something that can wait until our offices re-open. Out of hours call-outs can be expensive and should only be made in emergency situations. Blocked Drains Call Dyno-Rod or similar emergency plumbing service. They will require you to pay their account on the spot but we will arrange to reimburse you but only where it is the communal drain that is blocked. Electrical Failure to Common Parts This is normally due to a circuit breaker operating. If you know where this is located you can push it back in or push the switch up. If in doubt, call the emergency number of the local Electricity Company. Door Entry Breakdown These can normally be left until our office re-opens. A message or email will ensure that a work order is placed with the appropriate contractors. Page 11 of 16
TV Aerial Failure This is not an emergency matter: Where a communal TV aerial or system is installed we would require two or more lessees to complain about poor or loss of reception before we could instruct an aerial contractor to attend at the cost of the service charge. You are advised to first check that the fault is not with your television before reporting a problem with the aerial. Lift Breakdown If persons are trapped in the lift, call the fire brigade on 999. Where an emergency number is displayed on site for the lift engineers, also call them. If the lift engineers are called out outside of normal working hours, their call out charges (payable by you and your fellow residents through the service charge fund) are very high. It is often better to wait until we open and report the failure to us so that we can then issue instructions during normal working hours. Water Leak Call the emergency number of your local water company. If water is flooding through the building and forced entry is required into a flat, call the fire brigade. Foul Pump Flashing Light This is not an emergency provided, it is reported within a few days of being set off and can be dealt with during normal office hours. Other Building Emergencies Where you have to call out a contractor and meet his charge we will arrange prompt reimbursement where the problem involves the communal parts of the building was an emergency and the payment for the repair is correctly the responsibility of the service charge fund. 24 Hour Emergency Service (Optional) In our experience, very few emergencies happen outside of normal working hours and those that do can usually be dealt with as above. However, if residents want the added peace of mind of a 24-hour emergency number then this can be provided for a reasonable annual charge, currently starting at 500 per annum depending upon the number of units. We will provide you with a mobile number which will be manned by one of our managers 24-hours a day. Please ask your property manager for details and a quotation. Accounting System For the majority of developments, the service charge accounting system is basically similar and is set out within the lease and cannot be altered or amended by us. It can be summarised as follows:- Page 12 of 16
Service Charge Estimate At the beginning of each service charge year an estimate is prepared detailing what amounts we estimate will be needed to provide the services to your building. Your comments will be invited on the estimate where time permits. How is the estimated service charge calculated? The lease requires us to estimate at the beginning of each financial year the total expenditure to be incurred during the year. To assist residents, we do not just quote a figure, but we estimate expenditure against each of the main items of expense - gardening, cleaning, insurance, etc. The estimated figures are based upon a combination of known expenditure during the previous year, existing regular service contracts, quotes from contractors and our own knowledge and experience, and is subject to adjustment after the end of the financial year. You are invoiced on the basis of this estimate according to the frequency set out within the lease. This will either be annually in advance; half-yearly in advance or quarterly in advance. Payment is then due. Year End Accounts Within six months of the year end an account of what has actually been spent is produced by an independent accountant. This account is sent to you with an adjusting invoice. If the account shows we have spent more than we estimated, then a further payment is due on receipt of the invoice. Where the account shows we have spent less than the estimate, the invoice will show the amount of credit which has been placed to your account and which will either reduce the payment you make when the next regular invoice is issued or will go into reserves for a rainy day. Reserve Funds The objective of a reserve fund is to collect for non-annual major work, such as decorating, so that in the year the work is carried out there is not a large increase in the service charge collection. As far as possible, we try to set the level of reserve fund collection so that very little extra payment, if any, is required when substantial building expenditure needs to be incurred. The reserve fund is invested in an interest bearing account and the level of the fund and the interest earned, together with details of any expenditure from the fund are all shown as part of the annual service charge account. When you come to sell your property, prospective purchasers should look favourably upon the existence of a reserve fund which will prevent substantial increases in service charges, particularly if the building is due for decoration Page 13 of 16
Service Charge Payment Service charge payments are due in advance as defined within the lease. The reason why advance payment is stipulated is because the only source of money to pay for the servicing of your building is the service charge fund itself. Therefore, if residents do not pay, there are no funds to insure or service the building. It is our duty to collect the service charge when it is due. We carry out this duty by issuing the invoice for payment well before the due date to give you plenty of notice to be able to arrange the payment. Payment is due in accordance with the terms of your lease so reminders will not be issued. Should service charges not be paid after a reasonable period, usually 14 or 21 days depending what the lease or Transfer stipulate, we have no alternative but to commence legal action to recover the outstanding amount. The lease usually provides that legal costs incurred are met by the residents in arrears. Service charges that are paid late will also attract interest at a punitive rate which will be specified within the lease/transfer. Service Charge Payment FAQ s. Can I pay by instalments? We offer arrangements for you to enter into a direct debit payment scheme for the payment of service charges in ten equal instalments during the service charge year. The first payment will be taken on 18 February in each year and the last payment on 18 November in each. There is an administration fee for this facility of currently 15 per annum plus VAT for which payment will be taken with the February instalment. I am in financial difficulties and cannot pay. What shall I do? In such circumstances you should immediately contact your mortgage lender. They have an interest in your property as security for their loan to you. In normal circumstances they will usually assist you with the payment. It is important that you keep them advised as, if solicitors are instructed to collect your outstanding charges they have a duty to inform your mortgage lender that they are taking action. The invoice received is not in my name. Why and what is my liability? This usually occurs when a sale has taken place and your solicitor has not registered the assignment with us as required by the lease. You should contact your solicitor immediately to ensure that the position is corrected as you want to ensure your interest in the property has been registered. Until registration has taken place, we are unable to amend the record relating to your flat. However as the owner, you are responsible for the charges so should notify us and pay these even though you may be resolving matters with your solicitor. I am going to sell before the period end date on the invoice. Do I still have to pay? Page 14 of 16
Yes. As the owner of the property when the invoice is issued the payment is due from you in full. You should request a receipt when you pay as your solicitor will require this and will obtain a refund from your purchaser or a contribution to the cost you have incurred. If you are completing a sale prior to the beginning of the invoice period, pass the invoice to your solicitor and he will then see that the purchaser becomes aware of it. For most sales, solicitors write to ask us if there are any payments outstanding. If you have not paid it is possible that this may hold up your sale. It is important to hold a retention when you sell your property as until year-end accounts of actual expenditure are produced, your liability for that year is not known. The estimate includes building insurance, but I already pay this to another party Under the terms of most leases we are required to insure the whole building but not your belongings. Where your bank or building society has required you to insure through them, you should obtain from us a copy of the insurance summary details and current schedule to give to them to cancel their policy. Page 15 of 16