Section 20 Consultation or “you really ought to want to”

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If you like Charlie Puth or Cliff Richard you will know that they both sing about how “ we don’t talk anymore…” .  Very appropriate words for block management and in particular Section 20 Consultation on qualifying works.

As a block manager acting for multiple clients, it is sometimes easy to feel exasperated about expenses on residential blocks particularly when they exceed the “Section 20” threshold.

For the uninitiated, Section 20 Consultation is the legally prescribed procedure that Landlords (or agents like us acting on their behalf) must follow when carrying out qualifying works.  Without delving into the deeper “legalese” surrounding this and speaking generally for the purposes of day to day block management, the process broadly applies to qualifying works of maintenance or repair which would exceed £250 (inclusive of VAT) for any of the leaseholders in a residential block with variable service charges.

You can read about it in some detail here on the Leasehold Advisory Service Website:

https://www.lease-advice.org/advice-guide/section-20-consultation-private-landlords-resident-management-companies-agents/

I’m a big believer that people should know what they are getting into when they purchase the leasehold interest for a flat or apartment in a residential block, but sadly leaseholders often aren’t well advised on their potential liability for costs in terms of their lease covenants.

The fact that such a regimented approach is required before qualifying works  can be undertaken, is evidence of how much conflict there has historically been in this particular area of block management.

Analysis Business Brainstorming Corporate Smart Concept

In some ways, Section 20 consultation is like a school uniform – it’s great – everyone does the same thing,  there is no doubt about the procedure and dare I say Landlords and Agents can be “punished” if they deviate!

The problem though is that because it has become such a formal process, consultation is often regarded as just another hoop to jump through before a managing agent can get on with the work.  It is easy to forget that you’re dealing with the common parts of a residential block and the “owners” of the flats.  The service charge costs or contributions to major works are often an unwelcome additional burden on them despite their necessity, and as a result it is not uncommon for the relationship between the landlord (or his agent) and the leaseholders to become hostile if communication is sacrificed in the process of following the rules and just making sure formal notices are served correctly.   Frankly, so much of what we do as managing agents is about perception.

For example that hallway carpet and paintwork in the lobby of a small block with two or three flats can be an unwelcome expense if you demand leaseholder contributions just after the festive season when most people are recovering from traditional overindulgence and the stark reality of credit card repayments!   A managing agent may be acting within the prescribed set of rules, but will typically find they are “herding cats” in this situation.

By the same token, the scenario looks very different if the flat owners understand the necessity of the work, the procedures  you need to follow as a competent agent and the positive impact that well maintained common parts will have on the value of their investment.   You will often find that the leaseholders will initiate other works and work with you on overcoming obstacles as opposed to being reactive and defensive!  You really ought to want to speak to your leaseholders!

If this isn’t your experience, you need to be talking to us for your block management needs.

The difference between a Property Valuation and a Market Appraisal

As Chartered Surveyors and Estate Agents in central London, we are often asked by property owners for a valuation of their property; occasionally there is some confusion as to what consumers understand to be a valuation, so we wanted to put the record straight and let you know the score!  A valuation is normally a formal valuation undertaken by a qualified person (a Chartered Surveyor would comply) using what is known in the profession, as the Red Book. The Red Book is written by the Royal Institution of Chartered Surveyors (RICS) and is now becoming globally accepted.

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An appraisal is normally carried out by Estate Agents giving an indication of what the property could be achieved in the market place based on their assessment of the local market and transactions. An appraisal is therefore not a valuation and cannot be used for lending/funding purposes.

A formal valuation is carried out for a defined purpose, for example:

  • A Loan
  • Inheritance Tax Calculations
  • Capital Gains Tax Calculations
  • Accounts
  • Transfer of assets
  • Personal Pension Plans (SIPP)

It will have to comply with the standards and guidance of the Red Book. It is a detailed report under specified headings.

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An appraisal is a short standard letter mainly used by Estate Agents for obtaining instructions to sell or let a property. If an Estate Agent is a registered RICS member, they will now need to follow the guidance set out in the new Blue Book, produced and published by the RICS. This provides industry standards for Estate Agents who are RICS accredited.

A valuer carrying out a formal valuation has Professional Indemnity Cover and therefore a fee will be paid. Normally there is no fee for a market appraisal.

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At Davis Brown we have RICS registered valuers and a team of Residential and Commercial Agents. If would like to discuss a market appraisal or a Red Book Valuation, please contact us:

No. 1 Margaret Street, London, W1W 8RB

T (44) 020 7637 1066

E info@davis-brown.co.uk

W www.davis-brown.co.uk

What’s The Solution to London’s Housing Crisis?

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The housing crisis in this country is one of the biggest political issues and has been for some time. There has been plenty of blame directed at the property industry but I doubt that this is the cause of the problem.

A recent study by Savills’ research team highlighted that private renters across the UK are now paying in excess of £54 billion with approximately 50% being under the age of 35. This problem has been most extreme in London where a limited supply of housing has prevented younger buyers from getting on the property ladder.

The Government recently proposed an additional £2 billion for additional 25,000 affordable homes over the next 5 years, however many fear this is not enough to solve the problem. The Mayor of London however has stated that in excess of 50,000 homes need to be built a year, with 50% being affordable housing.

As the demand for housing has continued to increase, the price of development land has also risen dramatically. When demands for affordable housing increases, developers often struggle to make a profit. This often threatens the viability of a scheme, no matter the size of the project. The result of this could be that over the next few years the amount of development decreases.

So what is the solution, and how do we get more homes being built and reboot the market?

The first thing that could be done is replace Stamp Duty by an alternative form of tax, which many surveyors and estate agents in London have been calling for. Although it will not directly result in more homes being built it is likely to re-ignite the housing market and give people more flexibility to move, rather than being trapped in a home that is too small or in a lesser location.

Many people feel that it is time to completely update and reform Planning Policy. If we account for the speed at which London’s population is growing should the stringent Green Belt regulations be reconsidered? This is an unpopular view by many, especially for those living there, but one has to remember how little space remains in Central London for the development of affordable housing.

Currently planning applications can be both time consuming and an expensive process. Negotiation can take a long time and often results in projects falling through. If a complete overhaul of planning policy was introduced this could not only speed up the process developments but also be more finely tuned to provide the additional infrastructure and affordable housing, which has become necessary.

On 22nd November the autumn budget will be announced by the Chancellor. Could this be the time we start to see a genuine solution to boost the housing market and finding a way of solving the ‘Housing Crisis’?….

All About Subsidence

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The definition of subsidence is ‘the gradual caving in or sinking of an area of land’.

How can you tell if subsidence is occurring?

Depending on circumstances, there is a varying degree of effects on buildings which are astride or close to a patch of land where subsidence is occurring. Typically you would find diagonal stepped cracking through external brickwork with the more prominent separation at the highest points of the cracks. Internal symptoms include cracks in plasterwork, rucking of wallpaper and doors/windows binding within their frames.

What causes subsidence?

Subsidence is most common where finer soils are present e.g. clay soils, which are prevalent in the south east of England but also extends as far north as Hull and as far west as Exeter in what is known as the ‘Clay Belt’. Water is the primary cause of subsidence on fine soils, usually caused by a close proximity tree which can draw moisture away from soil causing it to shrink or a leaked drain which can cause fine soils to wash away from beneath foundations. A rarer type of subsidence is due to the presence of old mines beneath buildings which can cause sudden collapse.

What is the difference between subsidence and settlement?

Settlement is the downward movement of the ground as a direct result of the weight of the building acting upon the ground. Subsidence however is unrelated to the weight of the building and can happen as a result of unpredictable factors.

How do you remedy the effect of subsidence?

As soon as you see symptoms of subsidence, an expert should be called to provide a diagnosis. Once the cause has been ascertained, typical remediation processes could involve repairing drains, cutting and removing trees, underpinning the building or demolition and rebuilding parts of the building.

Davis Brown Wraps Up London!

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This November, Davis Brown is once again supporting Wrap Up London in its annual mission to help keep London warm this winter. We’ll be volunteering as the Fitzrovia collection point for all your unwanted coats so that they can start a new life with those most likely to struggle to keep warm during the winter months.

The coat collection for the local area will run direct from the Davis Brown office with any unwanted coats donated to homeless shelters, refugee centres, women’s refuges and other charities. If you live or work in the area and would like to donate a coat to a worthy cause, we’d love for you to pop in.

We will be welcoming coats of all shapes and sizes to help Wrap Up London reach its 2017 target of 22,000 donations. Collections will run from today, until Thursday 23rd November, Monday to Friday 9am – 5pm. Please bring your coats direct to Davis Brown – 1 Margaret Street, London, W1W 8RB. Thank you!

Importance of Tenancy Deposit Scheme

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When applying for a private residential rental property, you should be financially prepared and place money aside in order to accommodate the deposit which you would be expected to transfer over to your agent or landlord (usually totaling 6 weeks rent), who in turn will place it within a government protected scheme. The Housing Act 2004 Part 6 introduced tenancy deposit schemes to cover the deposits paid by tenants who had assured shorthold tenancies (ASTs) however tenancies that are not ASTs are not covered by this legislation, and cannot be covered by tenancy deposit schemes.

There are multiple approved schemes including custodial, insurance-based or both. In each case, the legislation makes it mandatory for a deposit taken for an AST to be protected by an approved scheme. The legislation also sets out certain criteria that must be followed by the landlord or agent, these include: registering the deposit within 30 days, providing the tenant details of the prescribed information & deposit scheme within 30 days and at the end of the tenancy return any agreed or determined amount of deposit within 10 days or agreement or determination.

Should either your agent or the landlord not fulfil his legal obligation of registering the deposit, there are penalties and restrictions that would apply, including: preventing the landlord from serving a Section 21 Notice to bring the tenancy to an end, if the tenant applies to the country court the court will require the deposit to be repaid to the tenant or protected under an approved scheme and the court must also order the landlord or agent to pay the tenant a penalty of between one & three times the amount of the deposit. Best make sure you register the deposit!!

It is not a legal requirement to have an inventory carried out prior to occupation, however it is certainly strongly recommended as it schedules the condition of the property and provides protection for both the landlord and the tenant to help resolve any disputes come the end of the tenancy.

The most commonly used schemes include The Deposit Protection Service (DPS), Tenancy Deposit Scheme (TDS) & My Deposits.

Everything You Need To Know About Listed Buildings

Rydal Hall, English Lake District, UK, a historical listed building which is run by the Christian diocese of Carlisle to provide a retreat and conference centre.

What does ‘listed’ mean?

It means that the property is on a national register of buildings with architectural or historical importance. You can check if your property is listed at the following website https://historicengland.org.uk/listing/the-list

What does this mean for buyers?

It means the building is protected and the owners must ensure its upkeep and not make any unauthorised alterations without consent.

Which buildings get listed?

Anything built before 1700 that is still more or less in its original condition. Plus most properties built between 1700 and 1840, along with later structures (1840-1914) that either demonstrate technological advances or were designed by famous architects. And post-1945 buildings are now being added to the list, though only those of particular importance.

Does the building have to be a house?

In short no, all sorts of structures can be listed, a few unusual examples are a petrol station, skate park, pier and the old penguin enclosure at London Zoo!

What’s the difference between a Grade I listed and a Grade II listed house?

In England and Wales, a Grade I building is the most protected structure, being considered of ‘outstanding or national architectural or historical interest’. Very few buildings (2%) come into this category. Grade II starred status (4%) indicates a structure of more than just local interest and Grade II listing (94%) denotes the place is of ‘special architectural or historic interest’.

Can you make alterations to a listed building?

Not without getting Listed Building Consent from the local conservation officer, who is usually employed by the local council. When buying a Listed building you have to make sure the previous owners didn’t carry out any unauthorised work. If they have undertaken unauthorised works and you purchase the property the new buyer will have to remedy the works.

Can any changes or extensions be made?

Yes, but only with the approval of the conservation officer, who will probably insist on the use of bricks, tiles or other materials that match the original. Some listed homeowners view this official as an enemy, but on the whole, it’s best to view the conservation officer as a friend and ally, rather than an obstacle. After all, they have the power to say ‘yes’ or ‘no’.

Does anyone else get a say?

Yes, your local authority has to notify English Heritage of all planning applications for Grade I or Grade II starred properties. Sometimes, applications regarding Grade II homes are also referred to English Heritage as well.

Can you fight a refusal?

Yes, but it will involve a local inquiry called by the Secretary of State.

What about insurance?

As the house must be repaired using traditional methods and materials, the policy will be more expensive than for a modern house.

Why the British Fascination with all things Scandinavian?

map of Sweden through magnifying glass
map of Sweden through magnifying glass

Scandinavia seems to have been incorporated into every corner of British life.  It’s on our TVs, in our wardrobes, on our plates and very much a firm fixture in our homes by way of furniture.  Classic Scandi designs such as Eero Saarinen’s Tulip chair & Arne Jacobsen’s Egg are just as popular today as they were when first produced in the 50s and 60s.  So why is it that our love affair with Scandinavian furniture has stood the test of time?  The Nordic nations have an air of “coolness” about them, and this transfers to their designs, including clothing, architecture and indeed their furniture.  The Nordic nations have a real talent for functional, attractive, simple and affordable furniture and this makes for an appealing package.  The quiet, understated aesthetics have for decades been popular and were first taken on by designers and architects and the popularity soon spread – unsurprisingly, to the wider public.  Large brands such as Ikea have – since 1987 in the UK – been feeding the masses affordable pieces, and with new young Nordic designers on the rise we should expect it to be sticking around for the foreseeable.  We’ve even go so far as to adopt the Danish word “hygge”(pronounced “hoo-ga”) translating into English as “cosiness” , but it’s much more than that, it’s encompasses all things Danish and homely, often described as “the warm glow of candlelight” – I mean, who wouldn’t want a bit of hygge in their life?!

Why to use a Professional when negotiating a commercial lease

Commercial Lease agreement with money on a table.

We now have endless information and resources, at our fingertips which we can access day to day. By not instructing a professional for their advice, many people see this as a way of saving time and cutting costs.  Sadly this often has negative consequences as cutting out any professional advice makes people liable to the ‘free’ – often dubious information, which is available online. Much of the available information provided is not reliably checked and very often misses vital information. This often results in what should have been a relatively simple task turning into a much more time-consuming and unnecessarily expensive project. Property agents and surveyors in London are all too familiar with people getting into trouble after thinking they could do it on a ‘do-it-yourself’ basis.

When negotiating commercial leases, it is common for many people to ‘save money’ by cutting out the middle-man and not instructing an agent. People often think they have negotiated a good deal, however it is very common for them not to have accounted for other clauses within the lease. This can cost them significantly more than what was originally budgeted for; examples include large dilapidation costs at the end of the term, or significant rental increases with limited flexibility to surrender the lease.

Lease renewals and rent reviews can become a messy affair. Both landlords and tenants have been caught out by excessive costs if negotiations have failed. This can result in paying for a 3rd party surveyor or even going to court. If suitable advice had been taken at the beginning much of this would have been avoided, and the best deal for both parties could be reached.

As so much information is now accessible many tasks are thought to be easy enough to solve on your own. When managing property there are numerous things that can catch you out, I would suggest it is worth speaking to someone before you take the first step!

THREE OF THE BEST AUTUMNAL INTERIOR TRENDS

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This season is all about geometric tiles, velvety textures and houseplants. Below we share some of our favourite inspirations & tips and how to put them together in your home.

 

GEOMETRIC TILES

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 Square and rectangular tiles are a thing of the past, this season is all about mosaics in an array of shapes, colours and sizes. The great thing about these geometric tiles is that they can work in both modern and traditional settings, and despite being on-trend, styles like these don’t date since they also have a timeless appeal.

Shop the look: Geometric Black Hexagon Mosaic, £10.70 per tile, firedearth.com  

VELVETS

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 If you decide to go for one of the season’s hottest trends, we advise that you go for colours that are warm and welcoming such as burnt oranges, deep cranberry, soft chestnut and pastel pinks. And if you don’t want to invest in a sofa or an armchair, then why not opt for some plain velvet cushions or a throw?

Shop the look: Frame, An armchair in Blush Cotton Velvet, £599, made.com 

PLANT LIFE

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 Houseplants are here to stay – hooray! So why not decorate every corner of your home this autumn with gorgeous greenery. Our absolute favourites are the banana plant and the coffee plant.

Shop the look: Yucca Plant, £24.95, bakker.com