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FREQUENTLY ASKED QUESTIONS

We have considered moving to a new managing agent, after being with our existing agents for a number of years, but fear that it will be complicated, time-consuming and very disruptive
Why should we have to pay for a Chartered Accountant to certify the annual accounts?
I am a leaseholder - can I ask Carlton Property Management, as the Managing Agent, to carry out work?
I own a share of the freehold, with the leasehold of my flat. Does that mean you work for me?
What if I'm not happy with the standard of work being carried out, for instance by the gardener or cleaner?
What is a Section 20?
How long does a Section 20 Consultation take?
What can I do if I have really noisy neighbours in my block?
What if some of the flats are being rented, even though there is a covenant in our leases to say this is not allowed?
Is Carlton Property Management a member of the Association of Residential Managing Agents (ARMA)?
Why do I have to pay Service Charges?
What are Reserve Funds / Sinking Funds?
What is Ground Rent?
How is the money spent and will I be given information about the budget and expenditure?
Why is my service charge so high when I have a friend that pays half the amount?
The balancing charge on my annual accounts relates to a time before I purchased my property. Do I have to pay it?
Why have my service charges increased?
If I am selling my flat, do I have to pay the charges in full?
How can I pay my Service Charge?
What happens if a leaseholder doesn't pay?
I want to change the address my invoices and statements are sent to
What are my responsibilities as a Residents' Management Company Director?
Can I sub-let my property?
Can I make alterations to my property?
Can I keep pets in my property?
Why do we need a managing agent?
How often would Carlton PM visit my block of flats?
What do I do if I want to complain?
How do I get started?

We have considered moving to a new managing agent, after being with our existing agents for a number of years, but fear that it will be complicated, time-consuming and very disruptive.

We would be happy to take on the management of the whole move from your present management agent.  We will ensure the move is as seamless as possible.

Why should we have to pay for a Chartered Accountant to certify the annual accounts?

A lease will often require that the service charges annual accounts must be certified by a Chartered Accountant.  This clause is inserted in a lease to ensure that the financial management of your service charges are carried out according to accounting rules and that there is no mismanagement. Where there are more than four leaseholders in a block, current legislation requires that the accounts must be certified by a Chartered Accountant, whether or not the lease requires it.

I am a leaseholder - can I ask Carlton Property Management, as the Managing Agent, to carry out work?

Leaseholders can report a problem relating to the building or the common areas, if they see one. We would then ensure this is dealt with in as timely a manner as possible. A leaseholder doesn’t have the right to instruct the management agent on any matters. This is partly because there is no legal contractual relationship between the leaseholder and the managing agent, but mainly it’s because the freeholder/landlord or the residents’ management company is the client and the one with the right to make decisions about the block.

I own a share of the freehold, with the leasehold of my flat. Does that mean you work for me?

Yes – and no! Carlton Property Management, as Managing Agent, works for the Landlord (whether this is a freehold company, an individual, a Residents' Management Company or Right to Manage company) to ensure the appropriate responsibilities and legal obligations are carried out. Leaseholders who own a share of the freehold are shareholders of the freehold company.  This company and its directors are effectively the Landlord and our client. 

What if I'm not happy with the standard of work being carried out, for instance by the gardener or cleaner?

Of course, whether you are our Client or a leaseholder, if you feel that work being carried out, for instance under a regular maintenance contract such as gardening or cleaning, is not being done according to the agreed standard, then we would appreciate hearing from you as soon as possible, so this can be put right by us.  In addition, our regular inspections are aimed at monitoring the quality of the work carried out by contractors. 

What is a Section 20?

This is a requirement, under the Landlord and Tenant Act 1985, which basically states that any work, such as redecorating the outside of your building, that is going to cost more than £250 per flat, must go through a consultation process with all the leaseholders. During the process, leaseholders are able to make their comments or to suggest an alternative contractor to give a quote. If more than one alternative contractor is suggested, we would have to select one of these to add to the contractors already invited to quote, provided the nominee complies with liability insurance and health and safety requirements. Once quotes have been received from the selected contractors, and again communicated to the leaseholders, one quote would be accepted and the work would commence. 

How long does a Section 20 Consultation take?

As it is a fairly involved process it can generally take about four months from the decision to carry out the work to when the contract can commence.  If the work in question is urgent, and any delay would have a serious or detrimental effect on the building, then a dispensation can be sought from the Leasehold Valuation Tribunal (LVT) to bypass the Consultation process and enable to work to be carried out quickly.

What can I do if I have really noisy neighbours in my block?

As Managing Agent, we have no legal ability to deal with matters like this. There are a number of organisations able to deal with this problem, such as the local authority's Environmental Health Department or the Police. The first thing you could do is to knock on their door and politely inform them that they are creating too much noise. If they ignore you or you don't feel able to do this, then you could contact these organisations, who should be able to help you. If the offending flat is rented to tenants, you could either contact the leaseholder who owns the flat to let him know about the problem, or alternatively, let us know about it and we will contact the leaseholder to try and help find a resolution.  Whether the Landlord is able to enforce any covenants regarding noise nuisance depends on what your lease specifies.  It remains a leaseholder's responsibility to ensure his tenants do not cause disruption to other residents. We would advise you to keep a diary of events, which would help your case.
 

What if some of the flats are being rented, even though there is a covenant in our leases to say this is not allowed?

Normally a lease will state that sub-letting is not permitted without the landlord's written permission.  Once we are contracted to take over the management of a block of flats, we ensure that, for the sake of all the leaseholders' “quiet enjoyment” of their properties, we take the details of all the existing sub-lettings, so we know who to contact if there are any issues relating to a sublet flat.

Is Carlton Property Management a member of the Association of Residential Managing Agents (ARMA)?

We are full corporate members of ARMA. With the recent introduction of a voluntary self regulatory regime, called ARMA-Q, we are making it our goal to also qualify for this additional accreditation.


Why do I have to pay Service Charges?

Service charges are payments made by the leaseholder for all services in connection with the maintenance and repair of your block of flats. This is an intrinsic part of the lease covenants and it will usually state how often these are to be paid and are generally “on account payments, ie in advance, so that funds are available to pay for work as they occur. These services will include maintenance and repairs, insurance of the building, lighting and cleaning of common areas, gardening and, where applicable, provision of central heating, lifts and porterage. Usually the charges will also include the costs of management by the professional managing agent. Service charges can vary from year to year; they can go up or down without any limit other than that they are reasonable. Details of what can and cannot be charged by the landlord and the proportion of the charge to be paid by the individual leaseholder will all be set out in the lease. All such costs must be met by the leaseholders.


What are Reserve Funds / Sinking Funds?

Many leases provide for the collection of sums in advance to create a serve or ‘sinking' fund to ensure that sufficient money is available for future scheduled major works, such as external decorations or lift replacement. The lease will set out when regular, cyclical or maintenance works are due. Contributions to the reserve fund are not repayable when the flat is sold. This is because the cost of essential elements in the building are spread out over a number of years, allowing for a fairer distribution of financial responsibility between one or more owner of a particular flat. For instance, the cost of replacing a roof can be quite high. It would not be fair for owner A to have the benefit of the roof, free of cost, for several years, then sell his flat to owner B, who then has to pay for a new roof the following year.


What is Ground Rent?

Ground Rent is the rent that all leaseholders pay to the owner of the land (this could be a freeholder or head lessee, or a freehold company, where the leaseholders have collectively bought the freehold). Terms for this payment will be set out clearly in your lease. Ground Rent is strictly payable in accordance with those terms – normally annually or half yearly. The amount of Ground Rent due can vary for each property. For example, a 2 bedroom flat held on a 99 year lease granted in 1974 may have a Ground Rent due of only £10 per annum paid annually in arrears. However, a 2 bedroom flat held on a 125 year lease granted in 2001 could easily have a Ground Rent of £200 per annum paid annually in advance. On a newly built block of flats the developer will decide what annual ground rent to impose on each flat together with an asking price. All flat buyers would be well advised, therefore, to take detailed legal advice on their leasehold obligations before purchasing a flat in a residential development.


How is the money spent and will I be given information about the budget and expenditure?

All service charge payments we receive are paid into a client bank account separate from other properties we manage. At the end of the financial year for each block, independent accountants we have appointed produce a full set of accounts outlining the total service charges received for the year against the total expenditure. The accounts are produced in accordance with the Landlord & Tenant Act and our client bank accounts are conducted in accordance with the rules of the RICS Service Charge Residential Management Code. The annual budget, including expenditure cost estimates, is prepared and agreed with the landlord for each block or estate prior to the start of the next financial year. The service charges required to fund this anticipated expenditure is calculated and issued to each leaseholder along with the expenditure details.


Why is my service charge so high when I have a friend that pays half the amount?

Individual properties and lease particulars can vary enormously, making comparisons of service charges between different blocks of flats difficult, if not impossible. There are probably good reasons for the two sets of charges being very different. Here are some typical reasons:- (1) you may have a more comprehensive set of services funded through your service charge (eg all windows cleaned, lifts, car parking, entry systems etc); (2) Does your friend's service charge include sinking funds as yours may well do? If not, their charge is likely to fluctuate dramatically from year to year as large expenditure falls due; (3) How many flats are in your friend's block? Small blocks tend to have a higher maintenance charge per flat and overall maintenance costs are often disproportionately expensive because the costs are shared by fewer lessees, rather than being spread across a large number. For example a roof repair paid for by only 4 flats is expensive compared to the same provision paid for by 20; (4) Do you have extensive gardens or is your block an older building? If so, your service charge could be adversely affected; (5) What size is your flat? Service charges are often calculated by reference to the floor area of your apartment. If you own a larger apartment than your friend, then this can make a significant difference.


The balancing charge on my annual accounts relates to a time before I purchased my property. Do I have to pay it?

Yes. As part of the contract of sale there should have been an agreement that the previous owner of your property would still be liable for a proportion of any balancing charge. The solicitor who acted for the previous owner may well have kept back a sum of money from the sale as retention to cover this additional charge. You should contact your solicitor in order that any recovery of monies due to you can be made.


Why have my service charges increased?

This could be for a number of reasons. The cost of providing maintenance services is assessed annually but is initially based upon our knowledge and experience with other similar properties. In future years we have the benefit of actual expenditure, but even with this, there are some matters that are impossible to accurately predict. The costs of repair in one year may be minimal but may be quite substantial in the next year. Additionally, we may have to take into account outside influences such as changes in Government legislation which have recently led to substantial increases in the costs of providing management services generally. In addition, with new developments, it is often difficult to accurately predict the levels of expenditure in the first year or two. As a result there may be increases in the costs of providing certain services for the first few years of a new development. Another reason could be that the contractors who provide services to your property will normally increase their prices yearly to cover their inflationary costs. Insurance costs have changed significantly due to such things as September 11 2001, global climate changes, the increase in personal injury claims etc, and these have led to large increases in premiums.


If I am selling my flat, do I have to pay the charges in full?

Yes. You should pay all of the charges due on the property prior to any sale taking place. To protect the purchaser's interests, their solicitor must establish that there are no debts outstanding on the property. Part of the usual pre-sale enquiries that solicitors make, is to ask if there are charges due or outstanding against the property. If you have not paid in full it will, in most cases, delay completion of the sale of your property. Your own solicitor will apportion any money due back to you in the final completion statement.


How can I pay my Service Charge?

You can pay by cheque and send it to us by post. Alternatively you can make your payments through online or telephone banking. Details are provided on your service charge bill. We do not currently offer a standing order or direct debit service for several reasons. These include ensuring that payments are made in accordance with your lease terms and the difficulty in ensuring adequate cash flow from sums paid in this way.


What happens if a leaseholder doesn't pay?

It is the leaseholder's obligation to pay the service charges and ground rent promptly by the due dates stated on the invoices. We have a robust arrears regime which is effective in getting payment in most cases, where the leaseholder genuinely forgets to make the payment on the due date. If they are not paid and the landlord is able to show that the charges are reasonable, then he can begin forfeiture proceedings. If approved by a court, this can lead to the landlord repossessing the flat. However, the Commonhold and Leasehold Reform Act 2002, the right of the landlord will be restricted.


I want to change the address my invoices and statements are sent to

Please advise us of any change of correspondence address in writing. For legal reasons, we cannot accept such advice over the telephone. You must write to our accounts department who will then make the necessary amendments. Also for legal reasons, any new address must be within the UK.


What are my responsibilities as a Residents' Management Company Director?

Your responsibilities as a Residents' Management Company (RMC) Director are the same as for any company director. Consequently you have statutory and fiduciary duties that must not be taken lightly. In simple terms however you will be responsible for ensuring that the development is managed properly and cost effectively. For this you will need to work with your fellow Directors to agree a budget with the management agent and to ensure that your members then contribute on time and in full. You will need to hold meetings in accordance with statute and ensure that you consult with your members/shareholders regularly. We also recommend that you consider taking out a Directors & Officers insurance policy.


Can I sub-let my property?

Most leases allow sub-letting of property, subject to obtaining prior consent of the landlord/directors of the RMC, which cannot be unreasonably withheld. It is not normally permissible to sub-divide or sub-let parts of the property. Any resident wishing to sub-let their property should contact Carlton PM. It is vital that Carlton PM has been advised so that contact details are maintained so we know who to contact in the event of an emergency or other urgent matters.


Can I make alterations to my property?

Most leases and transfers include restrictive covenants prohibiting alterations to either the plan or the elevations of the property without prior written consent. Such alterations will include the replacement of windows, the removal of internal walls, installing external lights and the construction of an extension. Residents wishing to make alterations should apply to Carlton PM in writing, detailing the precise works to be undertaken including the appropriate plans and specification relating to the proposed works and any Building Regulations and Planning Permission required.


Can I keep pets in my property?

This is dependent on the terms contained within the lease or transfer document. Most leases prohibit pets or require written consent of the landlord/directors of the RMC before a pet is allowed to reside in the property. Some older properties do not include such a restriction.


Why do we need a managing agent?

Maintaining the common areas, the fabric of the building and the grounds are important elements in ensuring the value of your property is maintained. Poorly managed sites deteriorate quickly and become less attractive to purchasers and the costs associated with good management are often less, particularly where your agent has considerable purchasing power. The manager is responsible for ensuring that many essential things happen at your development and these are mainly:- (1) To make sure the building remains properly insured, at the right level and with appropriate cover. This might include engineering insurance for lifts and other plant, Directors and Officers Liability for Directors of an RMC and of course traditional buildings insurance that will include terrorism cover together with common area only contents cover; (2) To provide basic services on site including cleaning, gardening, window cleaning, lift maintenance, entry system maintenance etc. In fact just about any service that your development requires. This includes anything from legionella water testing to pigeon control. It depends on your building's needs and what services are agreed with the landlord; (3) Health and safety is a major part of our work to protect you and the people who work on your development. In additional we ensure that everyone who works on your development is properly qualified and insured; (4) All of the above is backed up by an inspection regime that not only provides a visual overview but will seek to maintain and indeed enhance the value of your property going forward by ensuring that your development is maintained at agreed standards; (5) as agents, we are experienced, fully qualified and have a thorough knowledge of the industry and the legislative compliance regime that blocks of flats are required to adhere to.


How often would Carlton PM visit my block of flats?

For most developments this will be 4 quarterly property inspections during the year, plus specific visits to meet residents' representatives. Of course in reality this often means that we visit much more often than this, particularly in the early days of the contract or where there is a specific matter to resolve.


What do I do if I want to complain?

In the first instance it is best to speak to your property manager for your property. Call or email and we will endeavour to resolve any problem as quickly as possible. If you are not satisfied with the response you receive, then we suggest you follow our Complaints Procedure. Details of the Complaints Procedure are set out in the Leaseholders Handbook, which we provide to every leaseholder on the properties we manage. All complaints are reviewed by the directors of Carlton PM and, if necessary, we will arrange to meet you in person to find a resolution. We are, of course, also happy to receive your compliments and any comments about how we can improve the services we offer you.


How do I get started?

Property owners considering a change of managing agents might be discouraged by the thought of having to devote significant and very precious time and effort in securing the benefits offered by a new management company. Carlton PM sets out to ensure this process is made as simple and easy as possible for our prospective clients. We recognise that certain fundamental issues will require client input. However, by obtaining information directly from the previous agents we aim to minimise the need for unnecessary client involvement in the handover process.