Your legal options as a leaseholder
There are around 4.8 million leasehold dwellings in England, according to the most recent government statistics. The day-to-day running of a property is often delegated to a property management company under a contract.
Why might disputes arise with a property management company?
There are several reasons why you might have a complaint with your property management company, but some of the most common ones include:
- Failing to carry out repairs or maintenance, such as broken heating, a leaking roof, blocked gutters, crumbling brickwork, or unsafe stairways.
- Detrimental changes to common areas, such as removing access to common areas which you had previously enjoyed access to.
- Service charges, such as failing to provide the services paid for or raising the service charge to pay for proposed major works which you believe are unnecessary or disproportionate.
- Breach of a covenant, such as failing to secure adequate insurance, unlawful interference with your right to quiet enjoyment of the property, unreasonably delaying or withholding consent for alterations, subletting or an assignment.
- Forfeiture, which is an attempt to terminate your lease over claims that you have breached a covenant, such as unlawful use or alterations to the property.
- Lease renewals and extensions, such as charging an excessive premium to be allowed to extend your lease.
- Failure to abide by a property redress scheme’s Code of Practice. All UK management companies must be members of, and abide by, the Code of Practice of one of two property redress schemes: The Property Ombudsman or the Property Redress Scheme.
What are your options if you are in dispute with a property management company?
Internal complaint
Your first port of call if you are unhappy with your management company is to make a formal complaint using the company’s internal complaints procedure, or by writing to them if they do not have such a procedure in place.
Redress scheme
If the company fails to satisfactorily resolve your concerns within eight weeks, you can take your complaint to the Property Redress Scheme or The Property Ombudsman, where an Ombudsman will consider your complaint and send you a final decision. If they uphold your complaint, they can require the management company to take action to put things right, and they can order reimbursement of financial loss or compensation for inconvenience and distress.
If you accept the Ombudsman’s decision and the property management company complies with its decision, this will be in full and final settlement of your complaint. You can only take the matter to court to obtain enforcement of the decision if the company fails to comply within 10 days of the decision.
If your management company is not a member of one of these schemes, they are in breach of the Letting Agency Work and Property Management Work (Approval and Designation of Schemes) (England) Order 2013, and you may be able to report them to Trading Standards, which can impose fines and further penalties if they fail to join a scheme.
Mediation
An alternative method of trying to resolve your dispute is through mediation. Both you and the management company usually need to agree to this course of action (indeed a dispute resolution clause may be included in the lease obliging both parties to undertake mediation before other measures are considered). Mediation involves you sitting down with an independent third party who will listen to the issues and help both parties try and reach a resolution.
First-tier Tribunal (Property Chamber)
Neither party is obliged to accept a resolution proposed via mediation. If mediation fails, and relations between you and the company have soured completely, you might need to make an application to the First-tier Tribunal (Property Chamber) to resolve your dispute.
If you feel the management company is habitually failing in its responsibilities, you can also apply to the tribunal to have the company removed and replaced by someone else.
You will need to show that you have given the management company the chance to put things right and they have failed to take satisfactory action. This might include, for example, breaching their obligations under the lease, failing to abide by an approved Code of Practice, or trying to charge excessive administration fees.
Right to manage
If there are enough similarly unhappy leaseholders in your building, you may be able to collectively exercise your right under the Commonhold and Leasehold Reform Act 2002, to set up a right to manage a company to run your building directly or pay a managing agent to do it. As long as all the Act’s qualifying criteria are satisfied you can do this, even if the landlord does not agree.
Collective enfranchisement
The Leasehold Reform, Housing and Urban Development Act 1993 gives qualifying leaseholders in a building the right to club together to buy the freehold through a nominee purchaser (usually a company set up just for this purpose). Depending on the terms of the leases, this should allow you and your fellow leaseholders to have much more control over the management of the building.
How we can help
Our property litigation experts have vast experience in resolving the full spectrum of leasehold property disputes, including ones with a management company. Whether you want to make an effective initial internal complaint, complain to a redress scheme, take your case to mediation or tribunal or explore your statutory options, we are here to help.
We will listen to your complaints and then outline your options for resolving the dispute in the most timely and cost-effective manner. Once you have decided on your favoured solution, we will be with you every step of the way until the matter is resolved to your satisfaction.
For further information, please contact Luke Edwards in the dispute resolution team on 01733 882800 or email [email protected].
Luke Edwards, Solicitor
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