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11:22 AM, 23rd September 2013, About 11 years ago 19
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Well, not quite but close…
I own a leasehold flat in an 18 unit block in Halifax. All units are owned by investors. About a year ago we took over the management, using the RTM Process. Myself and one of the other owners are now directors of the Right To Manage (RTM) company and we have a managing agent in place. The freehold is owned by a third party.
On the 19/2/2013 the building was inspected by an independent surveyor who wrote a report. The reason for the inspection is the poor condition of the concrete walkways. We bring you here the relevant sections of the report so that you can get an understanding of the situation.
Description & Background:
KC comprises a residential complex of flats constructed over three levels and provides accommodation within 18 units. We would estimate that the complex is 50-60 years old and is constructed of cavity brickwork external walls with a pitched clay and concrete tile covered roof. The intermediate floors, balconies and external access stairs are constructed of reinforced concrete, which appears to be case in situ.
Brief:
We understand that render has been reported as spalling from the underside of the external walkways which serve the first and second floor levels of the building. The purpose of the inspection was to determine the cause of the defect, set out an appropriate course of action for further investigation and propose longer term remedial measures.
We have also been requested to make any relevant general observations with regard to the premises and highlight matters of particular health and safety risk.
Inspection
The building was inspected by Bond Bryan Building Surveying Ltd on 19th February 2013.
Executive Summary
A brief visual inspection of the property known as KC Halifax was undertaken by Bond Bryan Building Surveying.
The purpose of the inspection was to investigate and comment upon spalling render to the underside of concrete walkways at the rear of the property and other items of disrepair identified during the inspection.
In all situations further investigation and testing of the concrete is necessary however we are able to comment on the overall condition and make recommendations as to the most appropriate courses of action.
We would describe the condition of the external walkways as very poor. The spalling of the cement render coating to the soffits of the walkways is attributable to the significant deterioration of the reinforced concrete.
The reinforcement bars embedded within the concrete slabs have corroded significantly. The bars have expanded through corrosion which has caused cracking and spalling of the concrete.
In our opinion the concrete slabs of the walkways have deteriorated beyond economic repair and it is our recommendation that they are removed and replaced with a steelwork structure.
Our challenge is:
We are told by the managing agent that if we don’t take the next step – which is have the concrete tested – they wouldn’t feel uncomfortable managing the site.
As far as we are concerned, no-one knows how long the concrete will last. It could be 5-10-20-30 years. All a test would supply us is with the state of the concrete at the moment and an opinion as to how long it would last.
Myself and the other director went to inspect the site with an experienced builder who explained that he would be able to make good the exposed areas of the walkways so that there is no danger of falling concrete.
We would much rather make good the exposed areas than going through the test which will, possibly, force us to go through a very very expensive repair process (the report speaks of more than £300K to replace the walkways with a steel structure). The flats are currently worth £40K each and there is no way any of the owners could afford to pay more than £16,000 for such a job.
Our questions are:
1. What can we do in this situation which would protect us as directors from being negligent while finding a practical and cost effective solution to this problem?
2. What are we required to do by law?
3. What is the responsibility and obligation of the freeholder in this situation?
We would appreciate any information or advice you may have.
Many thanks
Nitzan
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Nitzan
21:06 PM, 23rd September 2013, About 11 years ago
The rent for round £325-£350
Jay James
21:19 PM, 23rd September 2013, About 11 years ago
there seems to be a missing comment by NM at 21.06
Nitzan
21:36 PM, 23rd September 2013, About 11 years ago
They rent for about £325 pcm
Annette Stone
21:47 PM, 23rd September 2013, About 11 years ago
this all sounds lovely; would that it worked like that in reality!!! I think that even if you did try and get hold of the whole block when you got to the last flats the owners would have figured out the plan and you would be held to ransom over their purchase.
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Also, remember if you planned to have tenants at any time during this purchasing period - and indeed even whilst the problems are not resolved at the moment you have to take very good care to see that none of the requirements of tenant's health and safety are broken. They have to be made aware of the problems and of any potential danger to them or their children and they have to be made aware of this and other safety regulations IN A LANGUAGE WHICH THEY UNDERSTAND. Lot of responsibility here for buy to let landlords and letting agents as I assume the same legislation would apply as applies to fire safety as I would imagine that walkways with potential unsafe concrete could be dangerous for both adults and children. As a director of the rtm it is your duty to ensure that you know exactly what the problems are and that you communicate all information to the lessees and that you insist that they pass this on to any tenants.
Also, if there is really a danger of falling concrete you need to get some signs put up all over the place as any visitor or passer by who gets hit by anything will be in touch with their solicitor and claiming damages before you can say HELP!!!
It also occurs to me that once you have the reports from the three contractors or even before, if you feel that the surveyors' report is essential correct - you might want to bring in the Council and see if they can help. As the values are so low they may be interested in compulsory purchase of the whole block and refurbishing it as affordable housing.
You have clearly got a lot to think about!!!
Chris Hills
0:44 AM, 24th September 2013, About 11 years ago
Simple question but does the service charge have a sinking fund which could be used to at least defray the costs?
Clearly making the site safe is paramount - is there alternative access other than the walkway? Could the walkway be blocked off and the area made secure whilst a staged approach is planned and executed in stages, making it more acceptable to the leaseholders?
Jay James
18:05 PM, 24th September 2013, About 11 years ago
This all sounds well and good, but really?! Compulsory purchase has procedures that are cumbersome and may not apply to this situation.
It can and often does meet with very staunch resistance, quite possibly worse than one last seller that wants to bleed a buyer for extra money.
- -
Exit strategies may need to be planned out for possible use later on.
Annette Stone
18:32 PM, 24th September 2013, About 11 years ago
Absolutely but if you think that with such a major problem the flats are probably going to be unsaleable, the building may very well be uninsurable and if mortgagees find out about the condition of the property they may very well be concerns about their security, the realistic options are limited.
As if Nitzan needed something else to worry about, he may want to consider that the freeholders have had to devolve responsibility for managing the building to the rtm and they have the right to expect it to be maintained properly, irrespective of the cost and if the proper steps (whatever they turn out to be) are not taken they may well have a case against the rtm for not protecting their investment.
This one looks like the perfect storm and the best advice anyone can give Nitzan is to
get the professional opinions of what needs to be done ratified by three independent builders and then get on with the work.
Anything else leaves him and his co-director of the rtm vulnerable and if they really wanted to wash their hands of responsibility they could consider resigning and if no other directors came forward they could return the management to the freeholders and let it be their problem to sort out.
It would not save any money in the long run but it would remove the liability from them.
Jay James
18:53 PM, 24th September 2013, About 11 years ago
Reply to the comment left by "Annette Stone" at "24/09/2013 - 18:32":
That seems like a very good approach.
One relatively small advantage for leaseholders is that the current RTM staff may be charging less than the freeholders would if they took over management.
Nitzan
17:06 PM, 25th September 2013, About 11 years ago
Hi everyone,
Thank you very much for all your comments and input. They helped me and Guy to formulate our approach better.
Much appreciated.