By Steve Roulstone
If a Leaseholder of a site managed by an RMC has a complaint about costs and services, the traditional route for that complaint, if the Leaseholder feels the Management Company has failed to address the issues concerned, is the Leasehold Valuation Tribunal (LVT) whose job, as stated in the title, is to ensure that Leaseholders are receiving value for money in both the charges levied, money spent and services provided.
On behalf of the Leaseholder.
Therefore, when a Management Company is the subject of a tribunal bought by a Leaseholder, you would assume that the process is there to protect Leaseholders and ensure they ARE getting value for money and that their interests are being taken care of. Especially for investment Landlords, who have of course utilised property as their chosen route of investment, probably of their pension or main asset to be realised upon retirement. But this has proven not to be the case for a tribunal that has just reached determination by the LVT for all of the leaseholders of the site concerned.
Initial problem.
When the paperwork arrived at our office the first thought that entered our heads was why this action was being bought against the RMC concerned (we received it as the Managing agent of the site in question) and upon investigation, realised that the case the Leaseholder had bought was not only wrong in our opinion, but that it was going to take a lot of time and effort and professional advice to fight it on behalf of the RMC. Indeed specialist knowledge was most important and must be required for nearly every Agent in our position, because such matters whilst not rare are not common occurrences and as the LVT Chairman stated in this instance, rarely reach such complicated levels as was produced by the Leaseholder concerned.
Long story short.
The case itself and the detail surrounding it are not central to my main point here, but midway through the process, having answered in a way that we felt was relevant and confirmed what we believed to be the truth behind the case, we were clearly instructed by the LVT to give more information against every point raised in this complicated claim and in much more detail. This we did, but the outcome was that the amount of time and therefore cost that we were generating to fight the case was rising by the week. Indeed, to put together the response requested by the LVT took a total of 65 hours in one week alone. Add the cost of the professional advice, which required two trips to London by three people on two occasions and the time spent writing, processing and gathering data prior to the week spent compiling the reply and the eventual bill would amount to several thousand pounds. On top of this, the three day tribunal, again for three people just kept the cost mounting up.
To fight or not to fight.
Of course, we could have left the case alone and allowed the tribunal to make a decision based upon what they managed to gather from the Leaseholder alone, but the risk, considering the claim was for over £150,000 was just too great. Then there is the position of the RMC Directors to be considered. I know why such people take up the role of Director and one requirement they should not expect to have is the kind of specialist knowledge needed to fight a case such as ours. An argument of mine during the case was that if all Directors were supposed to be as knowledgeable as the Leaseholder who bought the case against them obviously was, then 90% of the sites in this Country would never attract a Director at all!
To the outcome!
Now here is my point in all this. We won the tribunal on all counts and were given permission to claim full costs through the collection of fees from the whole site. Now the Directors are left having to explain why the Leaseholders will all face an increase of nearly 25% on next year’s Management fee and all because of the actions of one Leaseholder. But if the LVT is duty bound to listen to such cases, then the Management Company must have the ability to claim the cost of fighting the case and their only route is through Management fees as they have no other source of income. So the obvious point is in what way does this outcome protect the interest of the Leaseholders on this site? The answer unless somebody can tell me differently, is that it does not and I know full well, that the costs generated were very reasonable, having pulled in favours and attracted the support of specialists in Block Management for at least one full day for nothing (purely because of the subject matter itself)
Better way.
For me the Management Company should have a better route for recourse and if the LVT can demand such a high level of input from the respondent then they should have more powers in determining where the responsibility of the costs generated should lie. Perhaps if that were the case then those bringing such actions in the first place would take in to consideration the possible implication of their actions before bringing a case, which unless we find out otherwise, will have no more impact on them than the rest of the property owners on the same site!
Recent Comments