In an article published by RICS it is expressed that rising costs will put pressure on the facilities management sector over the next five years.
The BCIS five-year (3rd quarter 2019 to 3rd quarter 2024) forecasts for the facilities management sector are:
- maintenance costs to rise by 19%
- cleaning costs to rise by 26% and
- energy costs to rise by 6% (based on annual averages 2018 to 2023) *.
Find out more here.
The issue of how remedial works and interim measures will be funded is an emotive and challenging one, with many competing interests at play. Brady Solicitors’ Adam Fotiou reviews the options for freeholders and managing agents seeking to fund these essential works.
Owners and developers who had installed cladding in good faith are refusing to pay for remedial works and many are looking to the leaseholders to fund these works under their service charge, should the leases to the flat permit them to do so.
However, leaseholders are inevitably (and understandably) aggrieved; they purchased their flats in the comfort of knowing the building regulations designed to protect their safety and the certification by local authorities of a building’s compliance with those regulations were both fit for purpose. The individual costs of the remedial works through the service charge will likely be life-changing for many.
Click here to read the full article published by News on The Block.
In December 2018, the Government issued Advice Note 14 (AN14) for anyone responsible for, or advising on, the fire safety of external wall cladding systems on residential buildings over 18m in height that do not incorporate Aluminium Composite Material (ACM), such as that found in Grenfell. The emphasis was on combustible systems such as wood and High-Pressure Laminate (HPL) installations. Although only an Advice Note this document is causing issues in the sale and re-mortgage of leasehold flats in affected buildings as some valuers are returning a £0 value on flats, thereby holding up sales.
ARMA (the Association of Residential Managing Agents) has been very active on the matter, taking the issue up with the Prime Minister’s Special Adviser, MP’s and the Ministry for Housing, Communities and Local Government (MHCLG). It is a member of the cross industry working group on valuations set up by RICS to address the matter.
Click here to see ARMA’s response to the confusion as detailed in an article published by News on The Block.
The RICS Professional statement – Service charges in commercial property – came into effect on 1 April 2019 with the aim of improving standards, fairness and transparency in the management of service charges and reducing the causes of disputes.
Joanna Crofts of RICS (registered institure of chartered surveyors) explains the benefits of the new rules for both tenants and landlords, what the global property consultancy has seen to-date, and outlines the changes that have become mandatory.
Read more here.
From 1 April 2019, the Royal Institute of Chartered Surveyors (RICS) will introduce their new Service Charge professional statement affecting landlords and tenants of commercial property.
The changes will apply to RICS members and regulated firms throughout the UK. The new service charge requirements are more prescriptive than the current regime and set out mandatory requirements for landlords. And while much of the guidance remains the same as the previous Code of Practice, there are a number of updates that will affect those in the industry.
It will also have the regulatory effect of formalising the Code within the RICS best practice framework.
The new changes are particularly noteworthy for those involved as disputes between landlords and tenants often relate to the level of service charges levied. Therefore both parties — landlords and tenants — will need to be aware of the requirements of the updated service charge regime.
Find out more from this article published by Capital Law.
With the New Year fast approaching, Kathryn Copeland, Commercial Real Estate associate, reviews the key developments in commercial landlord and tenant law in 2018.
The article, titled ‘A roundup of 2018‘ covers developments surrounding:
- A new service charge code
- The Electronic Communications Code
- Electronic signatures at the Land Registry
- and various case law development.
Kathryn also briefly looks ahead to 2019 and reviews what might be next on the agenda, including radical changes in residential leasehold, and the potential impact of Brexit.
‘This article was first published in Property Law Journal (December 2018/January 2019) and is also available at lawjournals.co.uk’.
Please note that the views, thoughts, and opinions expressed in this article belong solely to the author and do not necessarily reflect the views, policy or position of Websters.
Andrew Graham-Smith of Womble Bond Dickson writes about the new RICS Statement, which will come into effect from 1st April 2019.
In September, the Royal Institution of Chartered Surveyors (“RICS”) published its latest Professional Statement, entitled “Service Charges in Commercial Property” (the “Statement”). The Statement re-states updates and replaces the existing Service Charge Code (the “Code”), and has the regulatory effect of formalising the Code within the RICS best practice framework. The Statement is effective from 1 April 2019 and will apply to all Service Charges across the UK.
The Statement sets out best practice in the management and administration of service charges in commercial property and provides mandatory obligations that RICS members and regulated firms engaged in this area must comply with or potentially face disciplinary proceedings.
The Statement is not capable of overriding the terms of a lease, however, service charge provisions must be read in conjunction with the Statement to help identify the best interpretation of the lease provisions, and ensure compliance with the Statement as far as possible.
The Statement has increased the regulatory weight of the Service Charge Code, and as such the mandatory requirements and core principles should be carefully considered by professional practitioners who advise on the terms of new commercial leases, or who are involved with service charge provisions in leases.
To read more on the Aims & Objectives, Mandatory requirements, Core Principals & Guidance Click here.
Tessa Shepperson of The Landlord Law Blog writes about how leases fall under contract law.
As well as being an ‘estate in land’ (looked at in part 1) a lease or tenancy is also a type of contract. So we need to take a look at contract law.
Contract law is a very important area of law which affects all of us in our lives every day.
A contract is an agreement about something which is enforceable by law. To create a contract you need to have three things:
- An offer
- Acceptance of the offer, and
- Consideration going both ways.
A lease or tenancy is created in the same way as a contract, by one party making an offer and the other party accepting it.
Normally there is a written document but not always (more on this later). The consideration, so far as the tenant is concerned, is the rent, and so far as the landlord is concerned, is the property.
The rent does not have to be a market rent. Nor does it have to be money. For example, in the past (and when spices were a lot more valuable) a peppercorn was sometimes used for rent. A ‘peppercorn rent’ is a phrase now used to indicate a payment which is of low value but sufficient to create the tenancy / lease.
Click here to read more
In an article published by Shopping Centre the following has been reported;
Following the House of Fraser CVA (company voluntary arrangement) and the collapse of Poundworld and Fabb Sofas into administration, the British Property Federation has called on government to conduct an urgent review.
The property industry body believes the CVA process is now being mis-used, and it highlights a number of faults in the current system including:
- Lack of transparency
- Unfair discrimination between different creditors
- The lack of regulation to ensure CVAs are used appropriately and to drive good practice
To read more click here.
With the new General Data Protection Regulations (GDPR) coming into force on the 25th May 2018 many Residents Associations and Management Companies are asking what this means for them.
In a recent Q&A from News on the Block, Vincent Billings of Bolt Burdon provides his advice on what is required to comply with GDPR in a property business.
The driving aim of the GDPR is to protect individual’s data. Any business cannot deal with personal data simply because it wants to. Every element of data processing must be justified according to the GDPR.
The starting point for dealing with the GDPR in relation to any property business is to establish what personal data you hold, where it came from and who you share it with including if any direct marketing takes place.
To read more click here.