Dementia making you feel isolated?

Lonesome teddy bear  Dementia has been described as the scourge of our age and it seems clear part of the reason for this is the longer years we are now living.  Another reason is, we now take mental health more seriously and take the time and care to identify the various forms of mental health.  Dementia includes alzheimers, but not all dementia sufferers have alzheimers and even two people with the disease may experience different symptoms.  On one thing they will all agree, that it can cause a terrible feeling of being cut off.  Being misunderstood is one of the darkest emotions the human heart can go through.

Which is why the safety of home can ease that painful process.  Science is constantly working to relieve and assist those living with the disease, but little thought has been given to the part home and home providers can play in supporting those with dementia.  This is not about care or nursing homes, this is about building dementia friendly houses for sufferers to live in safely.

This has been addressed by a 56 page housing charter which covers a wide range of issues about housing those with dementia.  Whilst it’s not possible to cover everything in the charter we cover a few highlights here.  Firstly it has been endorsed by a number of recognised institutions including: Dementia Friendly Communities; Housing Learning and Improvement Network; Association for Dementia Studies; Care and Repair England; Royal Town Planning Institute; Life Story Network.

The charter opens with these words and then asks of the suffers of dementia some questions.

‘People with dementia face a range of challenges. These may include memory loss, or difficulty communicating, mobility and navigational issues and other associated problems. Across every part of the housing sector organisations can make a valuable contribution to supporting people with dementia facing these challenges.’

Put to those who support people with or who themselves suffer with dementia:

  1. What would you like to see in the housing charter?
  2. What actions would you like the housing sector to take?
  3. What difficulties do you have in relation to housing? What difficulties do you worry you might have in the future?

A number of issues were discussed:

  • location – the importance of familiarity
  • design – colour and layout
  • technology – alarms, sensor and lights
  • accessibility – the importance of local amenities
  • signage – clarity and appropriateness
  • dementia awareness training for housing staff and planners
  • opportunities for social interaction
  • adaptability as needs change
  • loneliness and isolation

The document then gets into the meat of it’s purpose and presents it’s case in an engaging informative way firstly offering suitable titles like ‘the difference that suitable housing can make.’

It quotes facts and figures; breakdown of target audiences, to help support their arguments.  The document cites examples of other organisations like Hyndburn Homewise; Waltham Forest Housing Association; The Guiness Partnership; Lifetime homes; Selwood Housing; Brookside Retirement Village; Pozzoni Architects; Midland Heart; Life Story Network; Dementia Voices; who have all adopted and taken action on dementia issues.  This is helpful for newcomers to the problems dementia poses

At the end it provides a list of useful resources including useful organisations. Page 53 has a list of detailed answers and feedback to the 3 questions they asked at the beginning.  The answers show a keen understanding of the challenges sufferers of dementia face.

Specialist retirement housing is not new in England.  Provision has been made by specialist housing providers for decades and much has already been done to address the needs of the retirement market.  Issues of sight, hearing, reduced mobility and social isolation are not new problems and much has already been achieved.  If dementia has added further and unique needs, the building sector is flexible enough for these challenges.

In terms of property management and working with property developers where housing is being built specifically for older buyers, whose potential need for dementia support is more likely, the desire for all of us to be a compassionate society can go hand in hand with a good marketing plan to show dementia sufferers that provision and care has been made for them.



Event Fee Disclosure Documents

Terms of Service notice  Events fees is the name given by the Law Commission for those transfer, exit or contingency fees which are charged by some Landlords in the lease and are not always clear before a potential buyers commits to the purchase.

The Law Commission is recommending that when a property is sold off plan the interested buyers are supplied with a disclosure document and these must include:

  1. The address and price of the property
  2. An explanation of the Event fee
  3. A statement that an Event fee is payable
  4. When the Event fee is triggered
  5. How the Event fee is calculated
  6. Who the Event fee is payable to
  7. Whether any of the fee goes into a sinking fund and if so how much
  8. Illustrative examples showing how much the Event fee may be on sale of the property

The document must include a statement that the prospective buyer should ask the Freeholder about other charges, such as service charges, ground rents and sub-letting fees, which may apply in addition to Event fees.

If there is more than one option for the payment of Event fees, the prospective buyer must be provided with a disclosure document for each option.

When a property is sold by the leaseholder through an estate agent the freeholder must:

  • Provide the specified information about Event fees to the Elderly Accommodation Counsel to be included on their database of retirement properties;  or
  • Provide their contact details to the Elderly Accommodation Counsel to be listed on their database of retirement properties; and
  • Provide an estate agent with a disclosure document for the property within two working days of being contacted by the estate agent

The specified information should be set out in a disclosure document as above.


Whatever it’s called ~ it must be transparent.

Lessor under the magnified glass  Exit fees – Transfer fees – Contingency fees – Event fees

These are all the names by which fees are levied in some retirement property leases and compel leaseholders to pay a fee for a variety of what the law commission is calling ‘events’ and which although lawful, have caused consternation and concern.  This is because they are not always explained to the purchaser of a property until he/she comes to sell his/her property and has to hand over part of the sale price, either to, and sometimes both, the Landlord and the savings or deposit bank account of the residents of the building they are leaving.

In 2013 an OFT report raised concerns that event fee terms are not always presented transparently and the Law Commissions own research, involving a mystery shopper exercise, and a survey of conveyancing solicitors, confirmed these concerns.

Finally the Law Commission has picked up this ball and is running with it.  It found that that particular features of event fees made them potentially unfair.  The OFT made criticisms including:

  • Event fees may apply in unexpected circumstances.  Consumers know about them when they sell their property but not if they sublet it, when a loan is secured against it or when a carer or spouse moves in
  • The fees are not always linked to a service provided by the landlord; some are put into a sinking or maintenance fund
  • The terms of the lease which requirement payment of event fees are not always transparent to consumers and the financial consequences not given prominence in sales materials
  • The terms exploit consumers who may not take the terms into account in their decision making

In October 2015 the Law Commission published a consultation paper and received 168 responses.  In May 2016 they published an analysis of responses received and in June of that year, a progress report.

They proposed a detailed code of practice for event fees be set in place ~ approved by the Secretary of State and backed up by legislation, so that event fees which did not comply with the code of practice would be unenforceable.

In September last year they published a draft code of practice and received 43 responses.

In a nutshell the Law Commission saw a case for event fees to be regulated by:

  1. Preventing event fees being charged in unexpected circumstances
  2. Imposing obligations on landlord/operators to provide transparent information about event fees to consumers at an early stage, including indication of how much a consumer may have to pay, enabling informed choices to be made
  3. Make it easier for consumers to challenge unfair event fees by providing increased legal certainty

The recommendations for a code of practice came down to 2 points:

  1. To limit the circumstances in which event fees may be charged and sometimes the amount to be charged
  2. To impose obligations on Landlords/operators to provide transparent information about event fees to consumers at an early stage of the purchase process including how much the event fees may be

In reference to point 1 the Law Commission recommend that event fees should only be chargeable on:

  • sale
  • sub-letting where the property is no longer the resident’s only or principal home
  • change of occupancy where the resident has died or where the property is no longer the resident’s only or principal home

In terms of limiting the amount charged they propose a prescribed cap:

As an example when the prescribed cap applies the amount of the event fee payable in a year will be no more than 10% of the event fee which would be payable on sale of the property.  So on sale of the property if the event fee is £2000, the event fee payable would be no more than £200 in a year.  The figure of 10% is based on the average length of stay in a retirement property.

Another example is when the event fee increases according to the length of ownership up to a given maximum, no event fee is payable on sub-letting or change of occupancy until the maximum rate is reached.  This limits the number of times an event fee can be paid.

In reference to point 2 the Law Commission recommends the code of practice should place obligations on landlords/operators to provide clear information about event fees to consumers in a specified format ~ a disclosure document.

It will include an explanation of how the fee is calculated, who receives it and what the consumer will receive in exchange for the fee.

Full and further information is available online here.

Due to the ongoing need for investment in new homes, this issue is ongoing and the Law Commission is not done with it yet.


Leasehold Houses

hands-1282376__180  The issue of selling houses as leasehold was raised to the Prime Minister who replied.

“we will act to promote fairness for the growing number of leaseholders, but we will consult on a range of measures to tackle unfair and unreasonable abuses of leasehold, as the Housing Minister has said. Other than in certain exceptional circumstances, I do not see why new homes should not be built and sold with the freehold interest at the point of sale.”

In addition Sajid Javid, the Secretary of State for the Department of Communities and Local Government, said the government is considering whether leasehold abuses could be included in a Consumer Protection Green Paper being prepared by the Dept. for Business.

This would be a significant step and could mean any abusive leasehold issue being brought to light could be addressed.

At the Home Builders Federation Policy conference, Javid also said “I will ensure that Help to Buy equity loan is only used to build homes sold on acceptable terms – you have to sell them on fair terms.”

This statement could mean putting a stop to selling houses as leasehold and also setting restrictions on levels of ground rents in flats sold under Help to Buy.

Greater protections for buyers and leaseholders is always welcome and this one is particularly important.


Private Renters on notice

man-with-wrench  From the 6 April 2017 the government has now confirmed that landlords can be issued with new civil penalty notices for housing breaches.

Local authorities can implement fines of up to £30 000 for a range of offences, under the Housing Act 2004 including failing to comply with an improvement notice served by the council and breaches of house with multiple occupancy licensing, management, selective licensing and overcrowding rules.

Landlords will be given notice of intent to serve penalty and 28 days to make representation. The council then makes a decision as to whether to impose a penalty, after which the landlord has 28 days to pay or appeal to the first-tier-tribunal.

Alongside the introduction of the new civil penalties Rent Repayment Orders will be extended from the same date.  These orders – which already exist – allow a tenant or local authority to reclaim rent or housing benefit where a landlord rents out an unlicensed property such as a house with multiple occupancy.

Under the new government plans this will be extended to cover illegal eviction, breach of a banning order or failure to comply with a statutory notice.  The introduction of civil penalties and the extension of Rent Repayment Orders are just the first of a series of steps designed to tackle criminal landlords.  In October 2017, banning orders will be introduced – which could see landlords barred from letting or managing a property indefinitely.

So, private landlords, get your tool belt on, time to fix your properties and give your tenants what they deserve and are paying for.

Protecting Leasehold Money

Placeholder Image  CMP is client money protection and it is a scheme which protects the money which leasehold residents pay into an account for the purpose of paying the services which are provided for the maintenance and upkeep of the building they live in.

It is estimated that hundreds of millions of pounds of this money is vulnerable because it is under the control and management of letting agents.  The Housing & Planning Act 2016 provides a delegated authority to the Secretary of State to decide on whether to require letting agents in England to be a member of one of the following :

  • A CMP scheme that is approved by the Secretary of State
    • OR
  • A CMP scheme that is Government administered

A report from the working party set up by the Government to decide what to do came out in March.  Their recommendation was to move forward with the legal requirement of CMP for all letting agents in England that handle client money.  Concern was held that such requirement would restrict new firms entering the sector and therefore the group did not recommend that membership of a professional body should be a requirement to obtain CMP cover.

This development in terms of letting agents is probably overdue.  But why only letting agents?  Why not also managing agents?

2 Rivers believes it is appropriate for managing agents to be held accountable as well for the safe care of service charge monies which are held and managed by them to pay contractors.  Any move in this direction would strengthen and protect the funds of thousands of leasehold residents in the United Kingdom.



Help for the Leaseholder in dispute

Bee and blossoms  In residential property management, it is not always that legislation is drawn up for the benefit of the leaseholder.  But this has been done with new powers to the First Tier Tribunal  regarding legal costs.  For many years since the Leasehold and Tenant Act of 1985 the tribunal, then known as the Leasehold Valuation Tribunal has powers to make an order limiting the ability to recover professional fees incurred at the court or tribunal through the service charge.  The power to make this order is found in Section 20c of the LTA Act 1985.

However, the lease may entitle a landlord to recover such professional fees directly from the leaseholder through a clause which refers to proceedings in anticipation of forfeiture whether forfeiture is granted or not.

The impact of this clause and the costs against the leaseholder in dispute over service charges has been to reduce the number of cases going to the FTT.  The risk of a large bill to argue the leaseholder’s case was not worth it.  It was agreed by the Upper Tribunal that such cost clauses can be used against leaseholders.

Now under Section 131 of the Housing and Planning Act 2016 courts and tribunals have been given discretion to limit the ability of the landlord to recover these fees from a leaseholder as an administrative charge.

On 6th April 2017 Statutory Instruments came into force to help leaseholders by entitling them to apply to the relevant court or tribunal for an order reducing or extinguishing their liability to pay such fees.  The only restriction is that this regulation does not apply to litigation costs incurred in connection with proceedings begun before 6 April 2017.

For some leaseholders this is going to draw like pollen to a bee.

The details can be found here.


CMP to become mandatory?

Money bagOn 27th March recommendations from the ongoing consultation on compulsory client money protection was put forward to the Government.

The working group consulting the stakeholders to gather opinions, strongly urged the Government to make CMP obligatory for all lettings and management agents to practice.

85% of respondents agreed that compulsory CMP would raise standards throughout the industry.  It would also give peace of mind to leaseholders.

A challenge to Right to Manage obstructions

Money hoard  As those who have been through the process know, right to manage has certain requirements which can make the process tedious, frustrating and delayed.

In the case of Elim Court in Plymouth, it was only after 3 attempts that the residents of Elim got their go ahead for right to manage.  There were 3 issues which the landlord used to contest it.

  • That the invitation to participate was flawed because the Articles of Association were not said to be available for inspection on a Saturday, Sunday or both.
  • The claim notice was invalid because the signature did not comply with legislation.
  • A claim notice had not been given to the leaseholder of flat No. 37 which happened to be an Equity Release Scheme.

The decision of the First Tier Tribunal (FTT) upheld 2 of the claims of the landlord and rejected the application.  Fortunately, the Court of Appeal applied common sense.

It found that the claim regarding the articles of association should not hold up the application, because copies of the articles could be purchased for £5 for those who wanted to inspect them.  Furthermore, the only person objecting to this was the landlord and the RTMCo had sufficient tenants who were members of the RTM to make it eligible to claim right to manage.  It was also pointed out that any qualifying tenant who wanted to become a member of the RTMCo could not be refused by the directors, to join.

On the point of failing to serve notice on the leaseholder (referred to as an intermediate landlord) of flat 37 the Court of Appeal said that the primary persons affected by the acquisition of right to manage are those with the management responsibilities. “I would hold that a failure to serve a claim notice on the intermediate landlord of a single flat with no management responsibilities does not invalidate the notice.”

After these rulings, which have been shortened here, the judge went on to express a view, that the Government’s policy that the procedures should be as simple as possible to reduce the potential for challenge by an obstructive landlord had not been implemented.  The Government may wish to consider simplifying the procedure or grant the FTT powers to relieve against a failure to comply with the requirements if it is just and equitable to do so.

This is an example of how objections based on technical points which are of no significant consequence to the objector will continue to bedevil the achievement of right to manage.

And speaking of obstructions….chaos as the court of appeal decided a right to manage company cannot manage more than one building.

See the LKP article here.

This fight must go on.