Successful RTM claim

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    Successful RTM claim

    Hi all,

    I wonder if anybody can be of assistance.

    Cutting a long story short we have managed to obtain the RTM from a very aggressive freeholder. The right will transfer to us in August.

    It is a small block of four converted one bedroom flats

    We have incorporated the company.

    I have a section 20 outstanding for £20k for roof works. I have quotes for less than half of this. We will take on the roof works in August. The roof works are subjective in that local roofers are suggesting other ways to make the roof good. When we takeover are we able to vary slightly what the previous Managing Agent has recommended in order to keep the roof in good repair without the freeholder kicking up a fuss? If this was possible will we have to issue a fresh Section 20?

    Also I am concerned if I miss a procedure that the Freeholder will try to fight our RTM.

    There are 3 leaseholders including myself. We are all communicating and we will have meetings regularly. I am just a little lost.

    I do not know what fire regulations are needed i.e is there an inspection needed yearly?

    I also notice there is an asbestos inspection charge on our Service Charge bill. Would this be yearly?

    Also I have obtained their insurance policy. Does it have to be exactly the same? i.e. rebuild cost,declared value, excesses and terrorism liability?

    Is the best thing for us to read this? http://www.rics.org/Global/Service_c...ition_2016.pdf

    I have read most of the lease advisory website.

    Any advice gratefully received.

    #2
    When you say you've obtained the RTM, do you mean that you've applied for it and the counterclaim period expires in August? Or that it's past the counterclaim period and it's due to handover in August?

    Comment


      #3
      Hi Benzo. Due to hand over in August. Thanks

      Comment


        #4
        Does the freeholder live in one of the flats ?

        After the handover and RTM takes over the administration of service charge account, the freeholder is left with ground rent collection and proceedings for forfeiture of lease. The RTM Directors decide the service charge budget , and what work will be done and what service providing supplier will gets the work order.

        I suggest you buy a copy of RICS Residential Management Code from RICS Online Bookshop .

        Its the RICS guide for managing agents and explains what you have to do.

        Comment


          #5
          Hi Gordon999 No the freeholder does not live in one of the flats.

          Is it this online book?

          http://www.rics.org/Global/Service_c...ition_2016.pdf

          Comment


            #6
            Yes. This Code is the standard applied by FTT to judge the service of managing agents.

            For fire regulations. you need to contact your local Fire station for the safety officer.

            The buildings insurance is usually insured for the declared re-instatement value which is calculated by a RICS Surveyor based on the total floor area and latest building unit costs. .

            You should be looking at the current policy to see what is the declared re-instatement value.?

            Comment


              #7
              Thanks again Gordon999. Appreciated.

              Yes I have last years Insurance policy which has the rebuild value and a terrorism clause.Shall l add the RPI to the price?

              If you have time to read the below I would be very happy. In the meantime I have ordered this book:

              https://www.amazon.co.uk/Right-Manag.../dp/0728204282

              A) My lease states for insurance purposes I don't have to insure for terrorism so I'm fine to omit this from the policy as it was previously covered? It states "the lessor does not have to insure terrorism unless a mortgage company specifies to".(I'll check mortgages with other leaseholders)
              B) Can I change the specifications slightly of roof works from the previous freeholder? This is advised by several roofers. Do I also have to issue a new section 20 if I change the spec?
              C) I shall contact the local fire dept thanks.
              D ) I have received a notice from the freeholder that all monies will be passed to the RTM company on the date specified. Will a cheque land on our doorstep with accounts etc or do I need to communicate with the freeholder at handover date? I am aware all contracts will end and I will not be renewing with any of their workers.

              Thanks in advance. A great forum!

              Comment


                #8
                Section 20 protects the leaseholders, not the freeholder. If the freeholder objected it would be because the proposed work was not sufficient to comply with the lease, not because of consultation issues.

                You should get a lot of information on handover. Even if the contractors are abandoned, I hope their warranties won't be voided, so you need those. You also need all the details of the accounts, and the underlying records, together with copies of fire risk assessment, asbestos surveys, electrical inspections, the health and safety files from building work recent enough to be covered by the CDM regulations, details of defaulters, copies of licences to alter, etc., etc.

                The guideline for fire risk assessments is to review every year, or after significant work or changes in circumstance, if sooner, and to redo every four to five years. The normal assumption is that you can review yourself, but is best to get consultant to redo it, or if there are major changes.

                Electrical inspections are typically every four years.

                Asbestos probably the same, but the first inspection, which should already have been done, involves taking samples, and those don't have to be repeated; if it came back as no asbestos present, unless subsequent work has contradicted this, you don't need one at all.

                Comment


                  #9
                  Originally posted by leaseholder64 View Post
                  Section 20 protects the leaseholders, not the freeholder. If the freeholder objected it would be because the proposed work was not sufficient to comply with the lease, not because of consultation issues.

                  You should get a lot of information on handover. Even if the contractors are abandoned, I hope their warranties won't be voided, so you need those. You also need all the details of the accounts, and the underlying records, together with copies of fire risk assessment, asbestos surveys, electrical inspections, the health and safety files from building work recent enough to be covered by the CDM regulations, details of defaulters, copies of licences to alter, etc., etc
                  Thanks Leaseholder64 much appreciated.

                  So as above I do not need to go through another section 20. i.e. If all 3 leaseholders sit down and agree specs etc costing say £5k. We would all divide the amount correctly and sign papers saying monies paid and agreed etc. Would this be sufficient?

                  Also thanks for the info on handing over. Do you believe all this will be sent to the RTM address or will I need to chase for reserve fund, monies owed etc etc?

                  Last question is I have received a demand for insurance but they have been charging me £20 for each flat as an administration charge. I cannot see anything in my lease stating this is allowed. Am I free to just pay the insurance demands and not the Admin charge?

                  Thanks again!!

                  Comment


                    #10
                    Your RTM Is due to commence in August and will take over running the service account and maintenance of building. The RTM decides everything and freeholder is left with collecting the ground rent and dealing with forfeiture of lease (which is unlikely to happen ) .

                    When does your current buildings insurance expire ? What is the annual premium you are charged ?

                    Ideally the next policy should be under the RTM as policy holder.

                    You need to open a bank account called " RTM ( Client Money ) " to receive the money at handover.date from freeholder.

                    Read about opening bank account in your RICS Code.

                    Comment


                      #11
                      Hi Gordon999

                      I have received a notice confirming RTM will commence in August. The freeholder states that the insurance will run out on this date and I will have to arrange. Policy is currently £1920 for four flats. I need to name the freeholder on my policy.

                      Also can you confirm that I can get away with this...?

                      I have received a demand for insurance but they have been charging me £20 for each flat as an administration charge. I cannot see anything in my lease stating this is allowed. Am I free to just pay the insurance demands and not the Admin charge?

                      Thanks again. It is much appreciated!

                      Comment


                        #12
                        I'm a bit confused because the first half says you are arranging the insurance and the second half says the freeholder is!

                        Why would you think that he freeholder would not want to be name as having an interest in the insurance? (I would say it was essential they were named!)

                        Why do you think the freeholder should do work arranging the insurance for no money? (There could be a question of reasonableness, of course.)

                        Comment


                          #13
                          Thanks Leaseholder64 for the reply.

                          Apologies for the confusion.

                          I have received a renewal from the freeholder for insurance for the upcoming year. I shall pay this and the majority will be refunded in August when we handover.

                          I shall then arrange my own policy for the building naming the freeholder as an interested party.

                          I was not aware the freeholder could charge an administration charge on top of the policy for 'time spent arranging the policy'. If so then I shall advise the other leaseholders to pay the admin charge on top of the buildings insurance demand.

                          Much appreciated!

                          Comment


                            #14
                            I think £1920 cost for buildings insurance for 4 flats is OTT . If your building has not made any costly insurance claims during past 3 years , the cost of annual insurance should be down to around £800 for whole building ( or roughly £200 per flat ). Are you located next to a petrol filling station ?

                            Comment


                              #15
                              Thanks gordon999.

                              No we do not have any claims in the last 3 years. This is obviously another reason why I shall be arranging our own policy. One flat does pay nearly £700 but has a large garden.

                              This is also why I was concerned about the 'Administration charge' of £20 per flat. I was going to pay the premium minus this admin charge but it looks like the general consensus is to pay this on top of the extortionate premium.

                              I am dealing with a freeholder that has one of the worst reputations. I won't mention what joys the leasehold advisory service and others have to say concerning this company.

                              Comment

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