The Old Foundry, Roseland
- The building
- Three flats, probably converted in or about the late 1980s from a building whose name suggests a former non-residential use. The freehold is held jointly by four people, only one of whom could be located.
- What was applied for
- Appointment of a manager under section 24 of the Landlord and Tenant Act 1987, with dispensation under section 22(3) from serving a preliminary notice.
- The figures
- Three flats, four joint freeholders, three untraceable. Appointment 1 July 2021 to 30 June 2023. Service charge 33 per cent each, initial charge £500 a year. Manager's fee £300 per flat for year one, additional work at £55 an hour. Professional indemnity cover of at least 1 million pounds, certified to the tribunal within 14 days.
What Happened
Two managers had previously been appointed by the tribunal and neither succeeded, because neither could hold the co-operation of all the lessees for long enough. The building had been unable to obtain buildings insurance after failing the previous insurer's fire and electrical requirements, and there was unresolved fire damage, water ingress and neglected common parts. The three leases contain no effective service charge provisions at all.
What the Tribunal Held
Appointed for two years, and the section 22 notice dispensed with because it would not be reasonably practical to serve it on all those jointly named as the landlord. The tribunal identified nine failures of management, including the absence of insurance, of fire and electrical compliance, of an integrated alarm, and of any lease machinery for recovering service charges. Because the leases lacked that machinery, the management order itself varied all three leases, inserting a service charge definition at 33 per cent each, replacing the insurance covenant, and setting the payment obligation at the greater of £500 a year or the sum demanded. The manager was required to follow the management code, act independently with an overriding duty to the tribunal, hold all money in a designated trust account, and register the order against the freehold title.
What it means for a block here. Where the leases lack workable service charge machinery, a section 24 order can itself vary them and set the percentages, the annual sum and the payment dates. A defective lease is not a permanent bar to funding repairs.