The Landlord & Tenant Acts of 1985 and 1987, the Housing and Urban Development Act of 1993 and, more recently, the Amendments to the Housing Act of 1996 and the Commonhold and Leasehold Reform Act 2002, have each added security of tenure to leaseholders. (for more details of these and other relevant Acts of Parliament press here)
Leaseholders can now acquire their freeholds, they can extend their leases, they can apply to the Leasehold Valuation Tribunals (“LVTs”) – see “Leasehold Valuation Tribunals” – to either set aside or amend service charge demands and, if necessary, seek for the LVT to appoint a differing managing entity.
If the LVTs adjudication, on the reasonableness of any service charge demand, falls in favour of the landlord, that landlord has no remedy for charging interest on those reasonably requested outstanding demands, or any ability to recover costs for defending the call for the adjudication.
Whilst the lessees’ obligations to pay service charge demands are suspended from the inception of the adjudication process and the duration of that process to its findings, the landlords’ obligations, as covenanted in the lease, have to be performed at the landlords’ cost.
In the course of building up the leading brokerage for ground rent investors in the United Kingdom, we have frequently been asked to advise on:
This service we offer is multi-faceted.
All buildings need a regular “check up” for a variety of reasons.
Deterioration of buildings is a natural process that can be curtailed by an ongoing maintenance programme. This process can be better serviced by the considered monitoring of the same by a qualified surveyor experienced in the specific requirements of this situation.
We have found that the majority of lessees are happy to engage in this monitoring process. They quickly become aware of the commercial benefits in so doing.
With those landlords that have entered our insurance programme (see “Insurance Scheme”), this service is becoming increasingly essential. We have engaged a system for landlords that requires the lessees’ tacit approval, whereby all buildings are surveyed. The report satisfies each building’s requirement for an updated insurance premium.
For those Landlords that have management obligations under their leases the qualified report that acts as a guide to the maintenance requirements has proved very beneficial to all parties concerned. (see “Management Scheme”)
To those involved in our finance programme this process can provide an essential guide to the valuer if called upon. (see “Finance Scheme”)
For all those involved in our lease-extension advisory programme this also cannot work without a recognised qualified surveyor’s report. (see “Lease Extension Scheme”)
We are educated in the values of each potential income stream of the “ground rent” investment. We are aware of the issues that are important outside, but in relation to these income streams, that affect their value. Major clearing banks, insurers, surveyors and legal entities accept this opinion.
This service will also identify whether you have a statutory duty of care under the Control of Asbestos at Work Regulations 2002.
If you own, occupy, manage or have responsibilities for non-domestic premises which may contain asbestos, you will either have:
- A legal duty to manage the risk from this material; or
- A duty to co-operate with whoever manages that risk.
If you have information on the whereabouts of asbestos you will, under the duty of co-operation, be required to make this available to those responsible for managing these risks. Every communal activity of a building, be it the foyer, lift, roof space, engine room, garden, heating ducts and behind ceiling tiles and wall partitions, is, for the purposes of this legislation classified as “non-domestic”.
The survey is intended to describe the general condition of the building and to identify remedial works required in the short term (one to five years). Projections are based upon the professional judgement of the qualified surveyor at the time of inspection, coupled with any supporting documentation available to the surveyor. Obviously, works in the future may change either by addition or in priority, dependant upon issues such that cannot be foreseen at the time of the inspection.
It is not intended that this initial survey should be a comprehensive list of all defects in conjunction with remedial works required; but a record of significant items which are of a concern to the surveyor in relation to the overall condition and standard of the building.
The surveyor will not refer to elements that are found to be in an acceptable condition, compatible with the age of the building.
SCHEDULE OF CONDITIONS AND RECOMMENDATIONS
DESCRIPTION OF REPORTING FORMAT
There will be a general description of the accommodation, general state of repair, and long term planning summary.
The report will be presented in a table format with columns under the following headings:
Element – The part of the building being reported on
Location – Refer to the area within the premises
Description and condition- Description and condition of the element in terms of location, nature and materials, with comments on the condition of the element
1. Health, safety and security. Failure of the component resulting in serious risk to the health, safety and security of users and/or third parties or loss of amenity and space.
2. Liable to cause further damage resulting high cost for replacement and/or high consequential component damage.
3. Wind and weather tight, with acceptable level of maintenance.
4. Damaged, but no immediate risk, no consequential effect on other components. A repair to maintain the superficial appearance of the component.
Recommended remedial works required during the next five years as required
The budget element cost of carrying out the minimum recommended works on a day one basis. (It will exclude VAT and professional fees).
Percentage breakdown of the estimated works over a five year period, where the minimum recommended works may be prolonged in accordance with priority
Prior to undertaking a full survey of the building, all residents will be notified in order to state the purpose of the survey and to ensure that all problems, defects and concerns will be addressed in the survey.
All normal documents relating to the property held by the Managing Agents, the Landlord, or the Tenants, will be referred to and consulted during the preparation of the report.
BUILDING REINSTATEMENT COST ASSESSMENT
Assessment of the replacement cost of the building for insurance purposes, including allowance for the demolition, temporary works, site clearance, and fees. Excluding occupier’s fixtures and fittings and consequential losses.
This assessment will not cover any requirement for decontamination of the land, which might be imposed by the Environmental Agency or other statutory body, should total rebuilding be necessary following an incident generating a claim.
GENERAL CONDITIONS AND LIMITATIONS
This survey will be confined to an inspection of those parts of the building, which are accessible without the use of special equipment or builder’s attendance. Thus this survey will not comment upon the internal conditions of floor or roof voids, service ducts or other parts of the building, which are concealed or covered up, including adjoining sides of the party structures.
The inspection will also be restricted to areas governed by the freeholder’s obligations. No direct external or internal roof inspections will be conducted in the course of preparing the report, unless specifically requested.
The surveyor will carry out a visual inspection of the drainage, heating and electrical service installations of the building, but will not subject the services to testing. Manhole covers will not be lifted unless specifically requested.
Generally the report will assume that no deleterious or hazardous materials or techniques have been used in the construction of the property. However, the surveyor will be mindful of the landlord’s potential duty of care under The Control of Asbestos at Work Regulations Act 2002 (see “Asbestos Management”), or The Defective Premises Act 1972, and may well recommend a further inspection by relevant specialists.
The report will assume that the property is not in an area where, based on information published by the National Radiological Protection board, there is a risk of radon.
If you would like to discuss this service we offer then please press here