The Old Foundry, Roseland, Liskeard, Cornwall, PL14 3PQ CHI/00HE/LAM/2020/0012
DECISION
[1]This decision was made following a remote Hearing which was not objected to by the parties. It was attended by Mr Gerrard the nominated manager and the Tribunal members by video and Mr and Mrs Mottram by telephone. A face to face hearing was not held as it was not practicable. The documents that we were referred to at the Hearing were in 6 bundles which comprised:-a. The Application and supporting documents Bundle 1 (58 pages)b. Copies of two sets of Directions dated 28.10.2020 and 10.02.21 (12 pages)c. The Applicants statement in response to the second directions (36 pages) Bundle 2d. Reply Form completed by Mrs Glanville (Flat 1) (1 page)e. Letter to the tribunal from Mr Gerrard (4 pages)f. Copies of emails received from the Applicants and Mrs Glanville and Mr and Mrs Martin and Mr Gerrard. (11 pages) The Tribunal also received a copy of an indemnity insurance schedule for Freehold Management Services Limited (10 pages) from Mr Gerrard.[2]The Applicants made an application to the Tribunal for the appointment of a manager of the Property. They said that they were unable to serve a notice under section 22 of the Act on all the four named freeholders because apart from Mr Mottram who is one of them, the addresses or whereabouts of the other three freeholders is unknown.[3]None of the Respondents know the addresses of the other freeholders or possess any information which would enable them to be traced.[4]The Tribunal accepted that:-a. there is little prospect of finding any of the other three freeholders; andb. that if found they would have no interest in the management of the Property.[5]The Property was probably converted into flats in or about the late 1980’s. Its name suggests that its former use may have been non-residential. The Applicants are joint lessees and occupiers of Flat 3.[6]When the Applicants purchased Flat 3 in or about 2001 their solicitors omitted to register their interest as joint freeholders at the Land Registry at the same time as they were registered as lessees. Some years later Mr Mottram was registered as a joint freeholder with Rachel Elizabeth Summers, Christopher Ian Sibley, and Julia Joan Hainsworth at the Land Registry as evidenced by the official copies of the register of title for title number CL39451 extracted on 16 November 2020 [B2 Page 26].[7]The freehold title to the Property contains a reference to a covenant benefitting the leasehold interests of the three flats which states that no freehold of an individual flat can be transferred (as opposed to the entirety thereof) and that the freehold interest may only be transferred to such persons as simultaneously or immediately following such transfer have become the proprietor of the leasehold interest in a flat. The wording of the covenant is not particularly clear and the Applicants confirmed that it has not been complied with as, apart from Mr Mottram, the named freeholders on that title are not the lessees of the other flats in the Property.[8]Two previous managers were appointed by the Tribunal. Neither manager was successful in obtaining the co-operation of all the lessees for a sufficient period to enable improvements to be made to the Property.[9]In recent years it has been impossible to obtain a buildings insurance policy. This appears to have been a consequence of the failure to comply with the last insurer’s requirements regarding fire and electrical safety. Whilst the lessees have endeavoured to cooperate with each other the Applicants have concluded that the Property cannot be managed properly without professional assistance. There is no evidence before the Tribunal that either of the other two lessees wish to manage the Property on behalf of all the lessees.[10]The Tribunal have been told that that the three leases are in similar form and contain unsatisfactory provisions requiring the lessees to pay regular service charges to enable the Property to be maintained. Whilst some service charge contributions have been paid by all the lessees there appears to have been little agreement between them about the priority of any necessary works. The failure to obtain the co-operation of all the lessees resulted in the discharge of one of the former managers.[11]The current leaseholder of Flat 1 is Ms Glanville and the joint lessees of Flat 2 are Mr and Mrs Martin. Those three lessees are named as Respondents to the Application and received notice of it and the proposed appointment of Mr Gerrard. Evidence of their respective ownership has been provided to the Tribunal [Bundle 2 pages 21 and 23].[12]Mr Gerrard confirmed that he has agreed to take on the management of the Property. He told the Tribunal that he had been appointed by it before in relation to a large block of flats in Plymouth. He provided details of his experience and stated that his company currently manage more than eighty blocks of flats with approximately 800 leaseholders.[13]His company is a member of the Association of Residential Managing Agents (ARMA) and past recipient of an excellence award for services provided to leaseholders.[14]Mr Gerrard said that 50% of his current portfolio is buildings which are similar to the Property. He told the Tribunal that he has formulated “a bit of plan” which he hopes will enable him to improve the building and he employs an experienced maintenance team. Whilst he has not seen the Property this year, he looked at the exterior when it was first mooted that he might be approached to manage it in 2019. He said that the co-operation of the leaseholders is key to the success of management. He has spoken to the last manager who blamed his difficulties on disagreement between the three leaseholders. It will be a priority for him to meet with all the leaseholders as soon as practical and explain his plan.[15]Mr Gerrard said that his priority will be to obtain insurance and undertake a building survey so he can assess the urgency of necessary works and prepare a plan and schedule for the works. He has seen a copy of the lease of flat 3 and accepted that it was poorly drafted. He acknowledged that the current leases contain no effective service charge provisions and that he will need the support of the leaseholders of all the three flats to effectively manage the Property.[16]Mr Gerrard said his “fall back” plan will be to try and persuade the leaseholders to cooperate and support him as it will be in their interests to sustain and improve their investment in their respective properties.[17]He asked that any management order given him powers to recover arrears if payments are demanded and not paid.[18]He said that the minimum term of the appointment should be two years as it would be difficult to achieve any effective management over a shorter period. If the Tribunal think it appropriate, he will accept a review after 18 months.[19]He confirmed that his annual fee will be £300 per flat plus a charge for any additional work which is currently £55 an hour. However, he does not think that the additional hourly rate quoted will “kick in” unless he encounters unforeseen problems.[20]The Tribunal asked Mr Gerrard if he had taken into account the history disclosed of previous management of this property and the difficulties identified from his conversation with the last manager. He confirmed that he had and that he will follow the RICS Code and the ARMA Consumer Charter and Standards. He believed that he has the knowledge coupled with sufficient practical experience to comply with his duties to the Tribunal if appointed as manager of the Property.[21]Mrs Mottram said that she is extremely worried about building maintenance. She has been unable to “force” the other lessees to contribute towards maintenance and repair. She also said that she wanted to surrender the responsibilities which she and Mr Mottram had undertaken since they bought their flat.[22]Ms Glanville provided written confirmation that all the lessees agreed to the appointment of Mr Gerrard in 2019. She expressed her concerns about his “additional” hourly charge of £55.[23]Mrs Martin confirmed agreement to the appointment of a manager but expressed her concern that complete control over costs should not be given to Mr and Mrs Mottram, because they (Mr Mottram) own a share of the freehold.[24]Having considered the circumstances of the application and heard from Mrs Mottram and Mr Gerrard the Tribunal decided that since the lessees of Flats 1 and 2 also agree that it is necessary to appoint a manager of the Property it is just and convenient to make an order appointing Mr Gerrard as manager of the Property for two years.[25]If any lessee of a flat within the Property finds that his management of the Property is unsatisfactory, he or she will independently be able to apply to the Tribunal under section 24(9) of the Act for a variation or discharge of the management order.[26]Mr Gerrard will be required to adhere to the RICS Management Code and consult all the lessees before incurring any substantial expenditure. He confirmed that he understood these obligations during the Hearing. Judge C A Rai (Chairman) Appeals[1]A person wishing to appeal this decision to the Upper Chamber must seek permission to do so by making written application to the First-tier Tribunal at the Regional Office which has been dealing with the case.[2]The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision. Where possible you should send your further application for permission to appeal by email to rpsouthern@justice.gov.uk as this will enable the First-tier Tribunal to deal with it more efficiently.[3]If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.[4]The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.