F.A.Q. Help Our Block Is A Wreck -Budgeting and Priorities

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    F.A.Q. Help Our Block Is A Wreck -Budgeting and Priorities

    I am going to approach this as a block with residents in control, or at least at the wheel, in the sense of a car, driven by chimps. To keep it simple, freeholder also refers to head lessees residents management companies and right to manage companies. As always it is an anecdotal first principles guide, and trips over the odd second principle. It is intended to start you out on the right lines by touching on issues you can’t find elsewhere and most importantly get you to think.


    1 Where Do We Start?

    Do not approach this as a house owner, obtaining quotes to compare, negotiate and agree with your spouse (or tell spouse what they have agreed to), or Vlad, who is buying your kidneys, to pay for it.

    As I will elaborate there are several reasons why that’s wrong
    1 You probably don’t know what you are doing - c’mon you googled most of it
    2 There is a statutory procedure to follow to consult leaseholders on service charges
    3 This is a group exercise, but they may not know about team working and its dynamics
    4 You might be a company or the freeholder but the rules in 2 apply to you too
    5 You will learn about wearing two hats, and the “stupid people” who live in blocks

    1.1 We’re A Company or We’re Too small for the law to Apply

    While a company or a freehold group can decide to do what it likes, each flat owner has a lease which is a binding contract between them as landlord and tenant. It operates under landlord and tenant law, not just company law. There, two hats.

    Resolutions “at the AGM” or “we voted as a majority” therefore cannot change those leases/contracts or statutory rights and obligations.
    e.g for major works it can make decisions in principle or how to respond , but is dependant on the “section 20” process, and only the lease dictate payment times and shares
    e.g. while it can decide by vote to add conservatories and a pool, if the lease does not allow improvements, then leaseholders don’t have to pay for it. Conversely reducing services or facilities is not possible if the lease requires that they are provided.

    1.2 But We Are Share of Freehold

    Yes that was a chair that I just threw at you. There is no such thing, the group or company owns the freehold and flat owners have leases to which the law applies, as above i.e. I own a flat, we own the block so I don’t own a share of it, or our company/trust owns it.

    1.3 Can We Opt Out of That?

    There is long running litigation where the company’s articles (or freeholders “paperwork”) may allow them to fund works themselves but that has been challenged.
    The critical issues are
    • that the leases are still binding so that, e.g, you cannot replace windows demised to a leaseholder or anything that alters what the lease provides for
    • there is a risk that the cost might still be regarded as a service charge by the Court. This can arise if one has been dishonest in their agreement or disputes arise, especially if the project goes wrong
    • there is statutory presumption against contracting out, so agreements can be set aside unless it can be shown that the agreement was made in full knowledge of their rights and there is no overriding reason not to
    It is therefore essential to take legal advice before proceeding. A major component will be showing that they were aware of their rights, all alternatives and observations were explored, and that any decision reached was arrived at by consensus and agreement, rather than imposed or predetermined e.g. we are going to do it unless you disagree.

    1.4 Consultation and “Section 20”

    Leases set out what works and services are to be provided, and qualifying works such as re decoration etc which are included in the service charge must be consulted on where any one flat will contribute £250. No that’s not per flat, it is any one flat. Where there are large units such as a penthouse or knocked through flat, this can be most relevant.
    n.b. at the time of waffling Phillips v Francis, where the Chancellor the High Court, clearly off his medication, decided that it is the sum total of ALL qualifying works. So if one flat will pay £175, if you add that what you have already spent, and it adds up to £250 or more, then consultation is required. Even for a light bulb. Yes I know completely Dagenham East (4 stops beyond Barking).

    The legislation is the Landlord And Tenant Act 1985 (heavily revised) and LEASE do a detailed guide. I will concentrate on works that are not under long terms agreements nor for a local authority landlord, so please read the above rather than me regurgitate it. Instead I will paraphrase the steps and add the bits you don’t get told.

    1.4.1 What they don’t tell you; notices have day limits so check them, and add at least a working day for 1st class postage, more if you are 2nd class. Proof of posting, especially for overseas is recommended. Emails are useful but make sure that everyone agrees and opts in (no, that’s not “we will use email unless you moan”…) to service of notice by email.

    Tip: When dealing with observations and responses, make a separate copy in the file for the response sections below. It avoids overlooking it or being unable to easily locate it when the time comes. I also suggest that you respond separately rather than mixed with other issues.

    1.4.2 Notice Of intention (NOI)- 30 + days statutory minimum

    This sets out what you propose to do and seek observations and nominations for suitable contractors.
    -Suitable contractors are skilled and experienced in the works, verifiable by inspection and references, the financial resources, suitable insurance, and the appropriate heath and safety method statements and risk assessments. As employer you have to make sure they have them and that they are adequate and, along with any qualifications, are current.
    -Observations are obtained over the entire consultation period of 30 plus days after which they are responded to, as you have a duty to do that. These will either be summarised or copied whole for the next notice.

    In the Inbetween…. Likely at least 21 days

    it is at this stage, with a clear project and set of options, you vet the nominated and selected contractors and proceed to draw up the specification or schedule of works to be priced by contractors.
    -I recommend that they are in sealed envelopes to be opened by at least to people to avoid accusations of rigging. If there is mistrust have them sent to your surveyor or accountant to open and notarise
    -Contractors are not always bright allow time for mistakes and clarification

    1.4.3 Notice Of Estimates (NOE) 30 + days statutory minimum

    This sets out the prices obtained, at least two, and seeks observations. It summarises or sends copies of all the observations and responses and why any nominated contractors are not invited to tender. Copies of the prices must be sent or made available for inspection f.o.c.

    In the Inbetween….

    This rather depends on the observations as to how long it takes to proceed and place a contract and whether you need to revise and perhaps re- consult, or postpone works if a determination is needed or sought.

    1.4.4 Contract Award Notice 21 + days statutory minimum

    Where the selected contractor is not a nominated contractor or the lowest tender is not accepted observations are again sought with a summary of the above responses to the NOE.

    Remember that the decisions of your group are subject to this process and very much part of the decision making process rather than a stage or hurdle. The initial project outline is subject to the NOI, and the group has to decide how to respond and act before tendering the work. That outcome has to be included in the NOE, which presents the tenders, and seeks further observations, to which it has to respond to as a group.

    This can be done by the leading group, written exchanges, or open meeting(s). It is however very important to keep separate votes as a group or company and the consultation itself. Therefore after a general discussion of the merits of a project you would clearly propose that the company is voting on doing A. If that vote is passed it is then put to a vote that the company respond to observations that you are not doing B because of 1 2 & 3. This is vital; observations cannot be responded to and disregarded as “we voted against that”, reasons must be given, e.g. after considering B, for x y z factors, this was discounted and the company therefore voted for A.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

    #2
    2 Groups and leadership

    I’ll try not to sound like a management handbook from the airport. The one you bought to look impressive and try and get a free upgrade. We’ll ok it was just me then.

    2.1 We Are In Charge, Right?

    We tend to vote for the “take charge head screwed on” alpha types or those that are most vocal (well, the coherent ones). If there is general consensus and the funds are available all goes well. However we have to think of the exceptions, both to the above and generally. And learn the words to cum by ya.

    There is always going to be a minority opinion, some with financial issues or a split in plans or priorities. When the list of issues is long, all of these come into play. It is therefore essential to carefully study understand and listen to the other voices and accommodate their views.

    It is not simply common courtesy, as unless there is taste for litigation, do not be tempted to steamroll and quickly dismiss a minority position, or the person making them, as
    • There is the statutory duty(above) in the consultation process to seek and have regard to the observations and respond to them
    • The principle is, even with the stupid people, that you should respond to in an objective and constructive manner that a reasonable person, unfamiliar with the situation, would understand, e.g. a Court.
    • while the leading group can set out their preferred option, they are appointed by and accountable to everyone either as landlord or elected board or committee
    • Cynically, alienating today’s enemy loses tomorrow’s ally, as memories are long

    2.2 Direction-dragged to a decision or led to it?

    It is a common mistake that “being in charge” means that you advance your own agenda without realising that a key responsibility is to act on behalf of others. In order to do so you have to canvas and work with everyone, especially on major projects.

    A common business approach is an assertive and focused agenda which directs discussion towards a predetermined outcome by garnering support. Consultation is however in this arena a key part of creating the outcome from inception to finalisation. An alternative is laying out the information and alternatives, like a trail of breadcrumbs. This teases and nudges the discussion, and dissenters, to a consensus or workable outcome, despite it being tedious.

    I must stress the importance of trying to building a consensus rather than impose a decision, no matter how obvious it is and stupid the stupid people are. Cynically, in litigation a reasoned and professional response in a “teeth gritted, want to make voodoo effigy of them but can’t” approach will pay dividends, as it establishes the balance of credibility for you.

    It will also build trust so that those in real need who may mask their lack of funds with other objections, might trust you (to not post an arrears list on the notice board blaming them for the delay, or a notice “sponger” on their front door) and talk confidentially.

    But don’t let it go to you head, the shareholders or members are stakeholders with a similar or often identical stake to yours, and therefore your appointment, unlike a traditional company appointment, is truly only first amongst equals.

    2.3 Going Round In Circles, the expectation game.

    As consultation makes revision inevitable, delegates should understand that their ownership and investment in a task should be tempered by that and their accountability to the group. They must not be frustrated with delays, changes or starting over, nor go off track, however good the reason, without approval from the main group, or at least ensure that they develop alternatives as well as Plan A.

    For example, builders will press you with “20% off start tomorrow”. Norman no mates and his spreadsheets, even sweet old Betty (who struggles with the microwave let alone email) will slow you down. Text a lot Kate (who does nothing, just texts from the sidelines) will drive you mad with “keep me in the loop, hun” or “why don’t you respond” by return, at 3 am. And, finally, committees will rubbish weeks of work in a minute flat.

    In short, it is a complicated mix and those with team working skills are often the worst when they apply those to block management, particularly consultation, which has a circular and collegiate process, not a Menshevik driven linear one. It is important that those involved understand that when choosing the committee or person that they will suit this process, as it can get very frustrating, and you will ask "surely it should be more straightforward than this". It isn't you are acting for everyone not just you and everyone has a say and an opinion, even the stupid people.

    That is why the Chair spends their time thinking and managing
    -delegate selection
    -ensuring that the tracks taken are stuck to and any variation is first agreed
    -keeping everyone interested and participating, and
    -tempering over enthusiasm and smoothing ruffled feathers
    rather than “doing”.
    Leadership is therefore not “bossy Becky sorting it out”, it is about delivery and team work, in this case, using a herd of cats, and ungrateful ones at times too.

    2.4 A final word or warning-think it don’t say it.

    In business and life we make choices with a measure of risk that, in the end, it might end up costing us something. It is best to remember that you are speaking for a group or company and not for yourself. Rather like speaking for your employer, you cannot, for that “one *&^%$£$ person”, no matter how much you want to, actually recommend a self colonoscopy. The risk is not yours alone to create and meet.

    2.5 And if It Goes Wrong?

    In the case of leases, if a person has their contribution reduced, then the loss cannot come from the service charge. The freeholder will have to find the money itself and few Articles of Association allow for that, and if the winning leaseholder is also a shareholder or member, a Court would likely bar them making a contribution as such. As a result the stress that I have placed on working with the poor and stupid people, which in turn forces a second look at everything, is essential to reduce risk to the minimum.

    So lets get started.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

    Comment


      #3
      3 Do We Have A Clue?

      There is no substitute for experienced qualified advice from a surveyor engineer or specialist
      expert e.g chartered building surveyors, chartered quantity surveyors (brick counters)*, structural engineers and service engineers. They can assist with
      • scope of works, alternatives and the budgeting and costing of those
      • specification tendering and contract administration
      • when you are at work, so is the builder, so an expert on site is often essential
      • be a buffer between you and the stupid people
      • they can also provide an objective independent voice
      Their fees are a percentage that is on average between 8 to 12% of the contract cost or in some cases an hourly rate or fixed cost.
      * I am told they like to be referred to as Building Economists ( brick enumerators then)

      Contractors can provide advice and suggestions, especially the larger ones with full time estimators and qualified staff e.g. builders who are CIOB members. They are there to sell you their services and so might not be completely forthcoming, nor be any more honest than Michael Fitzpatrick, and his roving band of tarmacers from the caravan park.

      For everything else, there is google.

      The problem with that is while learning and doing is part of life, there are many blind alleys and inapplicable examples in the interweb. Are you confident that you fully understand the work being specified and moreover the associated matters of contracts, insurance, liability and health and safety requirements that you, as employer, have to comply with, and ensure that the contractor is and has? Are you prepared to take on contract administration, or even have the time to do so?
      e.g Boris the brush dropped a can of Dulux on the old lady on the way to the post office. Its the contractor’s problem, right? Well no as the employer you have, and share, liability too, which means that you have to ensure that the contractor is insured and his health and safety paperwork will pass muster. Don’t forget it can also be a criminal matter, and your insurance won’t provide a person to do your community service or pay the fine.

      3.1 What We don’t know.

      Single Biggest Mistake - failing to have a comprehensive and common spec for all estimates
      e.g. External painting is easy, yes? What quality of paint, value range or made of the tears of Tibetan monks, and are they all using it? How many coats? Where does the inside of a window stop and become external? How much rubbing down and burn off and how much on each window? Filler or timber cut in repairs?
      e.g. Carpets. Is the same type of carpet being quoted for? Underlay and fitting is free, but what quality is the underlay as it can take years off a carpet. Is removal of the old included?
      e.g Roofing. Like painting what material or insulation is being used? What scaffold and access arrangements are they using, full or handrail, rope and pulley lifting, or drag it up in the lift?

      This leads to the disputes e.g. “we said we’d paint the block but no one said anything about the repairs to the windows or the glazing. You mean that I have to pay more?! And why are you doing burn off and not rubbing down, and 3 coats, really? I propose we retender …its not what I understood. You Mr Chairman, did a rotten job.”

      Therefore the project has to be thought through in painstaking detail. When it is perfect, start with the “what ifs” and twist it bend it and break it. At this stage the stupid people are relatively useful with their nitpicking ways in stress testing your best laid plans.

      Second Biggest Mistake - Welcome friends to the wonderful world of contractor’s extras.
      By thinking things through, you can avoid the unexpected being priced as extras, e.g rotten timbers in windows or under flat roofs, woodworm in the rafters or asbestos under the communal pipework. They are all nasty surprises, except to the contractor, who once on site, has you at his mercy as to what he chooses to charge. Lovely Jubbly.

      You cannot get competitive prices and expect the current contractor to lose and let others use his scaffold, or work round each other. Leaseholders cannot be expected to pay for unexpected works, no matter how needed they are, it takes time to consult or obtain dispensation, even if the lease doesn’t stop you from billing the owners to raise the cash.

      This is why careful thought has to be given to provide a comprehensive specification for prices to be obtained on, or where work cannot be accurately specified, the contractors agrees a schedule of rates for the work and includes suitable contingencies in that tender.

      Third Biggest Mistake- Failing to Inspect Beforehand
      The above can be avoided by a through pre inspection before specifying to allow for visible works and potential works on a contingency and rate priced work, e.g. first checking the roof as, later on, you will have 4 flights of scaffold up to do the painting. This includes access scaffold or cherry pickers climbing around and poking holes in things or test patches on roofs etc. Cheap drone cameras are also very useful for hard to access areas as it is not legal to send small children up chimneys anymore.

      Fourth Biggest Mistake -Not hiring a qualified expert
      C’mon I have bills to pay and Cats to feed.

      This will establish the unknown unknowns and quantify the known unknowns through
      • a comprehensive pre-inspection,
      • drafting breaking and redrafting your specifications, and
      • include a schedule of rates to allow for the unexpected

      Otherwise your budget will vanish quicker than a builder’s private plated Mercedes when h’s fucked up.

      It is after all much easier to give back money at the end than ask for more, and, best of all, look like a genius.

      3.2 Health and Safety and Liability

      Ok matchsticks into eyes. The employer, you, cannot elude liability or responsibility as
      • the block is occupied and used by others, so the contractor does not take full control of it
      • even if the contractor dropped the roof tile on the school kids you still have some potential liability as site owner and employer
      • while in most cases a contractor will deal direct with a claimant the claimant can easily claim against you, and you in turn the contractor
      and the court will apportion liability between you. This means that
      • even if you have zero liability you still incur time and costs of a defence
      • your own employees and other users still look to you for their health and safety

      It is therefore your responsibility, and in order to protect yourself, to ensure that you have in addition to your own versions of the following, that the contractor has
      • adequate public liability insurance
      • comprehensive health and safety policies
      • risk assessments for all works on the site
      • method statements for all operations

      Many health and safety breaches have criminal penalties. Insurance may deal with legal costs, but not always pay fines, and the penalty may extend beyond the company to directors or in the case of freeholders, to them personally. It is rare that these can be passed on in the service charge or recovered by the Company.

      The question is “so how do we do that” and the answer is another question “to assess the scope and adequacy of the above and to identify and manage risk, am I competent to do so?” If you are not, then you need to either gain a suitable understanding of each operation and the legislation, or seek professional advice. Few contractors will indemnify you against all claims.

      Have a look at the HSE website and, for example, the construction design and management regulations and general obligations as to the common parts and exterior (which are regarded as workplaces and non domestic premises).
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        4 The Magical Mystery Tour of Contractors Pricing.

        While there are standard pricing guides contractors have their own approach business models and practices. Some say that they are making it up, and their calculators have a button marked “ that’s extra” , all we know is that’s its never on budget.

        4.1 Whats’ in a Name?
        There are three basic types of pricing
        1 Estimate- an approximate cost which can be varied on the final bill for exceptional reasons
        2 Quote- a fixed inclusive price
        3 Tender- an offer by a contractor to carry out works based on a detailed specification and a list of individually priced works.
        Assume that all prices are net of VAT.

        4.2 What Price Should I Get?

        The tender is generally used for more complex works and expensive projects. For smaller works the estimate or quote is appropriate but be wary of the
        -“that’s not included luv”
        -the sucking of teeth and “its more complicated innit”, and
        - “you understand that, of course” with the implied “otherwise you are pretty thick”

        Estimates can be used for larger simple projects as long as they are sufficiently detailed e.g. internal decorations would set out what is to be decorated with what, specific repairs and allowances for an area or rate for other repairs say re-plastering, together with general arrangements such as parking storage site protection, working hours and completion time, and no playing BBC R1Xtra,ever, or no weeing on next doors roses. Even if it is good for’em.

        It is essential that any of the above should include dispute resolution clauses and the minor works JCT contracts for small works or for home owners is very useful. Be wary that these clauses are agreed to and that the contractor cannot rely on his standard t & c s.

        4.3 Pricing Up

        Brick counters (3) ok quantity surveyors, and proper chartered surveyors use their experience training and a variety of pricing guides and indices to costs works for budgets ( yes that’s expensive talk for “look it up”). Or a quick call to a builder who owes them a favour.

        Contractors however use several thousand clicks on a calculator, much sucking of teeth and shakes of the head before finally dividing by “Pie”, & multiply by the chest size of today’s page 3. Plus VAT. By that I mean they have their own ways of doing things.

        Contractors have individual arrangements on their company operations and with labour, subcontractors and in-house specialities that cause priced elements to vary tender to tender. Contractor A hires a team each time and his price will include his subcontractors profit, and his own. B’s team only work for him so his price is lower as it only includes wages and materials, but his profits/overheads are in fact elsewhere, in his preliminary costs of the tender, so that while they, B, appear cheaper, they may not be as the grand total might be similar. Contractor C may be painting company, but his chum the roofer is helping out and he chooses to keep his low painting price and put say 30% on the roofing costs. Contractor D as a general contractor employing subcontractors might then add a lower mark up of 20% on all the priced works.

        As a result a priced list of works may be highly dependant on other prices or parts of a tender, and therefore cannot be seen as a shopping list to cherry pick. It is certainly a basis for negotiation but if he chooses to add 40% to the roofer you can only ask or negotiate that this be reduced.

        It is important that any items that you might exclude be priced as opt in or addon, not opt out. Cutting out works impacts other works and therefore the cost of omission may be higher than expected. In simple terms if you hire a man for the day and cut out jobs to 6.5 hours he will want 8 hours as 1.5 hours is lost working time to him, when he could have arranged say 2, ½ days. In the same way scaffold not used to clean stonework that is omitted will be charged for as it will be idle until the painters get to that section in a week or so.

        The use of appointed suppliers can reduce this and so, as in one case, stop the same coir doormat on a project vary between £35 bought direct to a priced cost of £210 plus Vat and fees. However do accept that a relatively cheap item on Amazon in fact takes time and effort to order and get delivered, which he will charge for. As he has to wait for weeks for your payment, especially on bulk items he may use a supplier on account and the price might be considerably greater than for immediate payment.

        Certain works may need a nominated subcontractor for a specific choice or section of work, e.g using the entryphone contractor to lift and relay cables, or a specialist floor refurbisher for the marble entry floor, or if you suspect that you cannot reply on the contractor to do a job well, to use say, your plumber who knows the building well.

        That’s is why it is key that variable elements are managed by precise requirements and common procedures and materials in clearly specified works, with pre agreed rates for extras.
        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

        Comment


          #5
          5 Making The List and Budgeting for It p1

          Pen poised to write the bullet points? Put it down. There is a lot of ground to cover before you get to that so that you approach it the right way.

          “There is never plenty of time”
          Source: Anyone who has done this before

          5.1 Timing And The Lease

          Lets say you want to paint in the summer. So that’s a month to get quotes, send them round, and send out the bills, so start in April ready for June, simples. Er no, says the Churchill Dog. Lets say we…..

          Start with the lease
          • What work are you required to do and when
          • When can you bill it under the lease
          Then you realise that
          • you have to consult and factor in meetings of the board and residents, which is at least 3 months
          • the lease says that the estimated cost has to be included in the annual estimate starting Jan 1 and we can only bill half in Jan and July
          And therefore on pricing we need either
          • a solid budget cost
          • prices with at least 7 months validity
          unless you have other funds or reserves.

          Rather than March you may have to start in September with a notice of Intention to resolve what is to be done and then obtain budget costings or tenders with long validity.

          If you have leases that charge in arrears or don’t allow one off demands then you might have to defer works or borrow the funds though interest might not be recoverable.

          5.2 Affordability

          The lease is a contract and a harsh mistress. It requires payment in full often long in advance and rarely allows monthly payments, even if you think it should. Without an external freeholder and their deep pockets, those that pay in full are subsidising others and therefore it is morally wrong to expect monthly payments. Funds have to be in the bank when needed.

          The Courts and Tribunals have stopped short of making affordability a prerequisite and have indicated that the landlord must instead be pragmatic and take note of owner’s priorities and financial position. As a result of this presumption, if an alternative and more affordable, fair and reasonable option presents itself, the landlord will have to therefore defend his, rather than the Court require that they be persuaded to accept the alternative.

          Do review your assets (and kudos to the person who, when she heard this looked at her “assets”, and raised an eyebrow- I was nearly unfaithful, but only in my head). Many freehold groups may have valuable land or space, ground rent incomes or lease extension rights, even staff accommodation, which can be sold or for loan security, outside the service charge, to fund works in the short term.

          All of this will invariably affect your timescale and needs some thought.


          5.3 The Road Map- Yes Major Works can be like the Middle East Peace Process

          1 What Do We Need To Do And Want To Do

          2 What Priorities Do We Have

          3 Is There A Best Order

          4 How Much Cash Have We Got And How Do We Get Some More

          5 Make A List and Obtain Preliminary Costings

          6 NOI to consult, finalise options and seek Observations And Nomination

          7 Vet Nominations and Finalise Specification And Tender

          8 NOE with costs And Summary Of 6 and seek Observations

          You can quickly see that this is not as simple as it seems.

          Decisions may take several meetings and discussion with everyone and the extent and scope of that varies group to group
          Stages 1-5 might become a circular argument without actual prices or budgets “ how can I say yes if I don’t know what it will cost”
          Stage 6 might be undertaken to explore stages 1 to 5. This may become quite protracted except for simple or short lists
          Stage 8 might be the time to decide stages 1-5 with actual prices to hand rather than budgets prior to stage 6
          There is merit in the “money no object approach” early on but, over specification can lead to wasted fees, as can under specification lead to increased fees on re tendering, not to mention sceptical residents and contractors

          With these in mind and my earlier comments about leading to consensus rather than driving the debate, an initial list and discussion is the starting point to see what the prevailing mood is.

          In most cases where it is going to be a laundry list and a lot of either or, it is best to opt for
          • making a list-money no object
          • getting budget costings as above
          to keep the debate structured into stage 6.

          5.4 Priorities

          Unless you are knee deep in water, the roofless top floor has taken to camping in the garden, or it is so bad you are reading the fine print of the fire insurance policy and developing an alibi (no, lawyers say don’t do that) what comes first is a nightmare.

          The overwhelming priority is the integrity value and amenity of the block, expressed in wind and watertight, safe to use, contractual obligations met, and amenity and appearance.

          5.4.1 Let Them Eat Cake. Vast sums are spent on roads roofs lifts pipes etc and you will still hear “ didn’t really get a lot for all that”…Many have forgone day to day expenses or holidays and quickly sour on infrastructure investment where the need was not, as above, dire. It is key to mix in some appreciable benefits and improvements such as running irritations, dealing with parking issues, a bit of scenic gardening or make over.
          e.g a large prestigious block needed to re design the lobby and it proved contentious. With 3 days labour and materials, a touch up of the wood work, painting over tired wall paper, a new big photograph of local landmarks in a frame ( under £100),brighter bulbs and some good fake flowers, saw people attitudes changed as it could be deferred for a year or so as the pressure was off.

          However cosmetic works should not overlook long term needs.
          e.g. a block had spent huge sums on wallpaper and carpets in the lobbies despite the smell of burning from the 50 year old wiring and pipes that were, well, more repairs than pipes. Told you so…. when after 3 years it was comprehensively ruined by works. A director became a recluse and one sold up due to the backlash-ironically from those that demanded the redecs at the time.

          5.4.2 Skin The Cat. Affordability concerns can be minimised with different approaches
          • residents days with pizza parties kids event bbq etc or short morning/evening exercises can achieve a lot, if properly planned and targeted, to deal with labour intensive works.
          • extensive redecorations may better done in phases on the most exposed elevations as long as the overall costs can be shown to be fair and reasonable esp if some sheltered elevations may be omitted or postponed or touched up/maintained.
          • Using direct labour by employing a painter rather than a contractor with overheads
          • looking at longer term savings such as PVCu windows rather than painting if timber repairs are extensive
          • a pitched roof rather than a flat roof
          • phased works such as replacing one lift and scavenging spares for the other
          • break down a large job into several if savings can be made rather than incur the overhead and mark up of the large general contractor
          • accept that temporary work might be needed to postpone works say to combine roof and redecorations on one scaffold as in the long term it is cheaper.
          subject of course to
          • the lease and whether it allows such repairs that may be improvements
          • the cost implications of deterioration due to delay

          A pet hate of mine is being unimaginative. Too often the inside or outside is painted and the other side of the door and frames are omitted. It is cheap to add on and makes a big difference to the overall impression of the job, as do little afterthoughts, if the contingencies are not used, and every job should have fat contingencies, such as a lick over of the lobby. With paint.

          .
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            5 Making The List and Budgeting for It p2

            5.5 Budgeting

            At this stage once you have made the list, discussed priorities, obtained costings, and after many readings of the lease understand it (probably), most the work is done. Now comes the hard part, making it affordable and successful by keeping everyone supportive ( or at least cowed) having explored their preferences, their ability to pay and what sort of payment timing or non payment issues your herd have dropped in your laptop.

            Reserve funds alleviate this issue however not all leases have them. In turn interest rates are often lower than personal rates and face resistance. It is therefore important to make sure these are well costed and relevant. These are also of great use to allow residents to plan and as a signed of good management where the lease makes no provision.

            In other cases where agreement is hard to reach or there is a risk of litigation, there are solutions such as
            • mediation where you sing cum by ya and express your feelings about paint colour in a non violent way, with a neutral person who finds common ground n.b they are usually cyclists so prepare for them to be delayed, and sweaty.
            • arbitration can be a quick way to reach an independent outcome
            • determination by the FTT

            It normally plays out that a gradual build up of the fund, with periodic little tasks in the meantime to keep everyone supportive, will be accepted and then regular expenses that are broadly similar year to year, though some may prefer a “year off” from payment and disruption.

            5.6 Getting Them To Cough Up

            Payment depends on the lease, but if you are prepared and able to be pragmatic, there are options, as long as owners understand that they are without prejudice to the lease and any breach will cancel any agreement e.g.
            • In advance, as above, due half yearly, if Z, the total, is x( the day to day) + y (the major works) you might agree to accept Y in May or in instalments but the second half in full.
            • In Arrears, some leases allow the cost to be added to prior years costs and collected as a deficit charge, and in which case the above approach can be taken too.

            Similarly an agreement may be made on
            • works and timetables
            • structured payments of arrears
            e.g. stage 1 payments facilitate stage 1 works etc

            You are under no obligation to do this no matter what the electricity board or their phone contact sais, as the lease is the contract that you all signed (so roll it up and beat them up until they stop bleating about direct debits….)

            However if you do vary, as the lesser know property expert Dr House says “Everybody Lies” and therefore do build in margins for legal action. You need to identify those
            • that won’t pay but could
            • those that can’t either in the timescale or at all

            If they can’t, then the approach is that you will likely have to accept a deal which is as good as one that a County Court will give you, or assist/threaten them into approaching lenders for further advances and remortgaging. This is often given in the cases of new roofs boilers lifts etc than redecoration or carpets. In some cases forfeiture proceedings or county court judgement might be needed to make the lender pay or the person sell the flat. Though forfeiture is as rare as hen’s teeth and rocking horse manure, the other two options also take considerable time. Good quality contractor budgets, professional budgets or actual prices, in accordance with the lease and section 20, will assist an owner in their application for funding or you in proceedings.

            There is a lot to be said for keeping it simple, and it’s a popular refrain “if they can’t afford to live here…” As said, having assessed the positions of the others, that approach is rather high handed given your equal stakes. Unless there is a pressing need, and truly stupid objections, it will quickly lead you to Court and considerable costs and delays. I suggest that if you accept that all roads will eventually lead to Court, don’t miss the chance to get an early solution with a constructive approach by accepting that you are acting, by consensus, in the common interest
            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

            Comment


              #7
              6 The Unbreakable Rule

              Never ever ever instruct the contractor without all the money you need in the bank.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment

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