Leaseholder Handbook

Horizon Management are the Managing Agent for your development. We have been instructed by either the Freeholder or Resident Management Company, referred to within your lease, to provide various services and to manage the development. Our aim is always to ensure that the building, and any grounds, are well managed to help protect the value of your property asset.

Some of our services as determined by the Freeholder or Management Company include:

Regular site visits and inspections
Maintenance, insurance and cleaning of communal areas
Arranging gardening and landscaping
Arranging repairs of estate areas as necessary such as street lighting and electronic entrance gates
Liaising, where necessary, with warranty providers, original contractors, insurance brokers, neighbouring properties, the emergency services, the local authority or local interest groups on behalf of the residents or our clients
Liaising with solicitors with regard to conveyancing enquiries

Our responsibilities do not include the repairs to the interior of your individual property or any design faults in the original construction or conversion.

The extent of our services for the communal parts are set by:

The Lease
Health and Safety legislation
Best practice
The requirements of our client
Relevant legislation put in place to protect all parties

WHAT ARE SERVICES CHARGES

Service Charges are charges payable by the Leaseholder to the Freeholder or the Managing Agent for the services the Freeholder is obliged to provide under the terms of the lease. Service charge amounts vary from year to year and will be based on predicted expenditure. Once the financial year is over and the service charge accounts have been formalised any surplus or shortfall will be dealt with in accordance with the lease.

HOW ARE SERVICE CHARGES DETERMINED

The Landlord and Tenant Act 1987 states that service charge expenses must be reasonable, and the Housing Act allows apartment owners to challenge unreasonable costs. Leases do not usually set any limits on expenditure. If your property has a Residents Management Company or Right to Manage, the directors will approve the service charge budget before we send it out to Leaseholders within the property. Each year we review costs to ensure the best value for Leaseholders and we always strive to deliver the best possible service at a reasonable cost. If the extent of the repairs means that estimates and quotations are needed, we will try to get quotations from various contractors.

Before major works, all Leaseholders are informed of the proposed work, including details of the tenders from independent contractors, and invited to comment on the proposed works and costs.

HOW ARE SERVICES CHARGES SPENT

We prepare a budget for your property each year according to the criteria set out in the individual leases and based on a review of the expenditure from the previous year and any proposed expenditure for the forthcoming years.

The budget is then usually discussed and mutually agreed with representatives of your Management Company or Residents Association before the start of the budget year.

The money you pay in service charges can only be spent on your development, and only residents on your development can benefit from it.

All Leaseholders will receive a certified set of accounts after each financial year. The year-end service charge account is a statement of actual spend over the past year and your share of those costs. When we send you the year-end service charge account, we include a summary of the amount you paid at the start of the year for the service charge budget, as well as the difference between the two. If the year-end service charge is higher than the estimated budget, you will need to pay the difference, if they are lower, you will get a credit.

Here are some common ways Services Charges are spent:

Fire equipment maintenance

Electrical and mechanical equipment maintenance – specific to each development but could include items such as water pumps, entry or security gates, communal heating boilers door entry systems etc

General repairs and maintenance

Buildings insurance

Landscape maintenance – from cutting the grass, maintaining communal gardens, watering and sweeping. Every development’s requirements will be different and be managed accordingly

Lighting, heating and cleaning of communal internal areas

Window cleaning – specific to each development, however some leases stipulate that all external windows are to be cleaned and others are for the communal windows only

Lift maintenance

Accountancy Fees

Company Secretary Duties

Salaries of any onsite staff that are employed specifically to work for the development

Contribution to a reserve fund, if there is one, to spread the costs of major works, for example roof or lift replacements, over a number of years

Management fee – the only part of the annual service charge which is paid over to the managing agent from the block’s bank account, held under the terms of a statutory trust

WHAT DOES OUR MANAGEMENT FEE COVER

The Management Fee is the fee that we charge for managing your block or development. It includes:

Preparing an annual estimate of anticipated costs. Maintaining records of all payments and receipts for each property in your development
Undertaking property visits to ensure that work is being carried out satisfactorily and to see if any further work is required
Dealing with queries from residents and ensuring that the covenants set out in the lease are being kept
Providing a dedicated property manager
Managing maintenance contracts, including arranging tenders and approving contractors
Arranging fire risk assessments and health and safety assessments of the common areas
Liaison with other third parties, including local authorities, neighbouring properties, fire services and local community groups

WHAT CAN LEASEHOLDERS DO TO KEEP COSTS DOWN

Taking care and consideration in the common areas
Report any repairs as soon as possible to avoid the problem getting worse
Provide access when requested to ensure issues get dealt with promptly
Appoint volunteers to liaise with us to ensure the smooth running of the block

HOW DO I PAY MY SERVICE CHARGE

The lease will determine the payment dates of the services charges. This is usually annually, quarterly or monthly. We will send you a Service charge Invoice before each payment is due. Information on how to pay will be clearly displayed on your invoice.

WHAT IF I CAN’T PAY MY SERVICE CHARGE ON TIME

It is important that payments are made on time to ensure that bills and contractors can be paid when due. If you are going to have difficulties making a payment on time, it is important to let us know as soon as possible, as we may be able to work out a sensible payment plan.

Your invoice will clearly state the payment due date. If we haven’t received payment by that date, we will send you an overdue statement. Further delays in payment (or failure to contact us) will result in a reminder that may incur an administration charge from us. If we still do not hear from you, we may need to instigate recovery action.

WHAT HAPPENS IF I DON’T PAY MY SERVICE CHARGE

You have a legal obligation to pay your service charge and therefore if it is not paid this could ultimately lead to legal action being taken against you, county court judgements being issued that affect future credit ratings, and in extreme cases possibly even forfeiture of your home.

WHAT IS A BALANCING CHARGE OR BALANCING CREDIT

At the end of the service charge period, a reconciliation of actual expenditure is compared to the amount requested in advance. Any variation between budgeted expenditure and actual expenditure (i.e. a surplus or a shortfall) is then apportioned to each leaseholder.

WHAT IS A LEASE

The lease is a legal agreement between the landlord and leaseholder (and in some cases the management company). It explains the rights and responsibilities that the various parties have. When an apartment is sold, the seller assigns the rights and responsibilities of the lease to the purchaser.

WHAT IS A RESERVE FUND

Your service charge may include a contribution to a reserve fund. A reserve fund is a fund held by the Freeholder or Managing Agent on behalf of the Leaseholders and is set aside to cover the cost of major works or cyclical maintenance projects and improvements expected in the foreseeable future, usually a period of 10-20 years.

Before major works (where costs are likely to exceed £250 for any apartment) are carried out, all Leaseholders are informed of the proposed work, including details of the tenders from independent contractors, and feedback is welcomed on the proposed works and costs.

GROUND RENT

The lease agreement will usually contain a requirement for the leaseholder to pay a ‘ground rent’ to the landlord. The ‘ground rent’ must be paid in accordance with the lease, subject to the issue of a statutory demand by the landlord or their agent.

WHO IS RESPONSIBLE FOR MAINTAINING MY APARTMENT

Typically the maintenance, repair, re-decoration and insuring of contents inside the individual property are the responsibility of the Leaseholder. This usually includes the repair and maintenance of any conduit, pipe or supply that exclusively services the individual property.

In some cases, you may also be responsible for parts of the exterior, such as the repairs of windows and window frames. Your lease will define which areas you are responsible for. If these areas are not maintained, we will contact you to ask that the necessary repairs are carried out without delay.

WHAT ELSE IS THE LEAESEHOLDER RESPONSIBLE FOR

As the Leaseholder, you are responsible for fire prevention and detection within your demised area (your apartment), and the evacuation from it. You must ensure you comply with all regulations, since failure to do so, is likely to put your life and the lives of others at risk. You must not make any alterations to your apartment which may reduce its ability to withstand or contain a fire.

Front door: You own front door should be fire resistant for a minimum of 30 minutes. It is your responsibility to ensure that it meets this minimum standard. For fire-resisting purposes, the gap between the door and the frame should normally be protected by installing an intumescent seal. These expand in the early stages of a fire and enhance the protection given by the door. Additional smoke seals, either incorporated in the intumescent seal or fitted separately, will restrict the spread of smoke at ambient temperatures.

Detection: In line with government guidance, you are expected to have and maintain smoke detectors in your apartment. It is your responsibility to ensure that you have enough smoke detectors and that they are tested in accordance with the manufacturer’s recommendations.

Evacuation route: You are required to plan an escape route for the occupiers of your apartment (this must take into consideration any special needs of the occupiers) and plan where you will gather once outside the building. Where practical, you should identify an alternative evacuation route, should your primary route be blocked.

It is essential that the halls, stairs and landings are kept clear; residents keeping pushchairs, bicycles or other items in these common areas present a significant hazard. Should there be a fire, anyone doing this may be held liable for any consequences that result. Any item that blocks the halls, stairs or landings cannot be permitted under any circumstances.

The fire procedure guidance for your building is displayed by the communal entrance doors.

WHAT IS PLANNED MAINTENANCE

Also known as planned preventative maintenance (PPM), this is a programme of planned maintenance that is designed to prevent the serious degradation of the building. Your lease may also specify that certain items of maintenance, such as painting the exterior, are carried out at certain intervals.

When we take over the management of a property our team will work closely with our client – whether that is the Freeholder, RTM Company or RMC, to assess what work might need to be done over a five year period.

We will then develop a programme of work that will always take into account the unique characteristics of the building to identify and prioritise what needs to be done and also help with budgeting for major projects that might be needed in the future.

The key benefits of regular and planned maintenance are:

It is more pleasant to live in a well-maintained property
An apartment in a well-maintained building will generally retain its value better and be easier to sell
It will usually limit serious deterioration of the fabric of the building and reduce the cost of maintaining the building in the long run
It should reduce the need for emergency, reactive repairs

WHO ORGANISES BUILDINGS INSURANCE

Your lease will determine who is responsible for taking out building insurance on your property. The cost of the premiums is paid through your service charge account.

WHAT DOES THE BUILDINGS INSURANCE POLICY COVER

This insurance will cover damage to the building principally against storm, fire, flood and, in some cases, subsidence. The policy does not cover damage to your contents, normal wear and tear or negligence by owners or their tenants. In all insurance contracts, there is an implied duty that the property will be adequately maintained and that owners will not take any action that may put the property at risk.

WHAT INSURANCE DO I NEED TO ARRANGE

You will need to arrange adequate contents insurance to cover damage to the contents of your apartment. If you let your property, you will also need to arrange landlord’s insurance.

WHAT HAPPENS IF A CLAIM NEEDS TO BE MADE ON THE BUILDINGS INSURANCE

If your property manager believes that certain repairs to the common areas may be covered by the buildings insurance, they will make an appropriate claim on behalf of the property.

HOW DO I REPORT A REPAIR OR ISSUE

We will carry out regular property inspections and make a note of any repairs that may be needed. However, we understand that the need for repairs or maintenance may become apparent between visits. If you do notice that a repair or some maintenance is needed, please contact your property manager, who will arrange for it to be dealt with. Similarly, if you are unhappy with the standards of cleaning or gardening, please let us know, in writing wherever possible, so that we can address the issue.

HOW QUICKLY DO YOU DEAL WITH REPAIRS

We deal with emergency repairs as quickly as possible. Other repairs will be dealt with as soon as it is practical to do so. In order to avoid excessive additional costs being added to the service charge account, we may wait for a number of items of a small cosmetic nature to accumulate to justify the cost of sending out a contractor.

COMPLAINTS ABOUT NEIGHBOURS

From time to time we receive complaints from residents in relation to their neighbours. The most common complaints we receive are about excessive noise, leaving rubbish in the common parts or parking in someone else’s space.

First of all, we would suggest you talk to your neighbour and try to resolve the issue. In some cases, particularly of excessive noise, your neighbour may not be aware of the impact their behaviour is having on you.

When we receive a complaint we consider the appropriate action. We may write to the Leaseholder concerned and ask them, or their tenant, to stop the behaviour leading to the complaint. If an apartment is sub-let, then the apartment owner (the Leaseholder) remains responsible for the actions of their tenants. If complaints continue, we will consider further action which may, ultimately, involve legal action.

CAN I MAKE ALTERATIONS TO MY APARTMENT

Most leases require you to seek permission from the Freeholder or Management Company before making any alterations or additions to your apartment. Any planned alterations should not be unsightly, should not affect the structure of the building and must meet local building regulations.

CAN I SUB-LET MY APARTMENT

Many leases require you to get permission from the Freeholder or your management company before you sub-let your apartment. If you are planning to sub-let your apartment, please contact us as soon as possible, so that we can give permission on behalf of the Freeholder or management company. To cover the cost of the time involved in checking your application and liaising with the Freeholder, we will charge an administration fee. Please note that consent to sub-let may be withdrawn if your tenants are disruptive, cause inconvenience to other residents or are in breach of the terms of your lease. You will be responsible for the actions of your tenants and ensuring that all of your obligations under the lease are met.

SELLING YOUR LEASEHOLD PROPERTY

When selling you leasehold property, you should provide your solicitor with as much information as possible, such as copies of service charge accounts from the last three years, current budgets, etc. Your solicitor should contact us as soon as possible for a statement of your account and a copy of the current schedule of building insurance. Should your solicitor require further information, we can provide this for an administration fee.

WHO IS MY BLOCK MANAGER

Each block has a dedicated property manager who will make regular site visits and be familiar with the block. A notice is in the communal entrance areas informing you of who they are and the best way to contact them.

HOW CAN I HAVE A SAY IN HOW MY BUILDING IS MANAGED

We are always looking for ideas and feedback on how Leaseholders want their service charge monies spent. If your building has a residents’ management company, you may volunteer to become a director of the management company.

If your building doesn’t have a residents’ management company, you can form a residents’ association, which can represent the views of all Leaseholders.

Whether your building has a residents management company or residents’ association, we will continue to maintain formal contact with each of the individual apartment owners.

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hello@horizonmanagement.co.uk

0300 030 1035