RTM Settlers Court Nightmare decision for leaseholders?

RTM Settlers Court Nightmare decision for leaseholders?

10:29 AM, 6th December 2022, About 3 months ago 21

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The Settlers Court supreme court judgement is we believe totally unfair and unreasonable. This decision enables RTM (Right to Manage) companies to only manage their building and not any common parts i.e. gardens etc.

This takes away a key reason for RTM to manage their building and surrounding areas some of which may not be appurtenant but generally used by the RTM property.

We are two blocks of flats one RTM and the other managed. The managing agent has now sent service charge demands (400%) over previous charges to the RTM company without consultation or agreement and with no breakdown of what they are – with an upfront payment demand?

This is unfair and unreasonable if anyone has any knowledge to bear on this or any details of tribunals challenging Settlers Court that would be good. We understand that the Leasehold Reform Act may change this!

What is needed are invoices with breakdowns for actual works to the fabric of the common parts!


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Mervin SX

11:23 AM, 10th December 2022, About 3 months ago

Reply to the comment left by Jill Lucas at 10/12/2022 - 11:19
Hi Jill,

Have you read the Supreme Court Judgement in full? Basically, they have ruled all non-appurtenant properties, whether they were previously agreed or rules in a tribunal, will now fall outside the scope of the RTM legislation.

Therefore, you now only have one choice and that is to re-agee, who manages which parts and for the parts that the Freeholder or their agents manage, you can then challenge them on the costs, or take them to the tribunal.

P.S. it does not matter how small or big your estate is - the supreme court order was very clear and to me, it is a much needed clarity (how much ever I hate paying the freeholder to manage a small area of garden, for example)!

Jill Lucas

12:23 PM, 10th December 2022, About 3 months ago

Hi Mervin - yes I have read the judgement line by line! we accept the decision the big but is that Settlers Court RTM did not agree areas of responsibility from the start and ended up with a dispute from day one! This is not the situation with many thousands that did who are now at the mercy of managing agents/freeholders rubbing their hands with glee to take back control and charge leaseholders over the odds! We have fantastic gardeners on a steep slop £2k per annum and now as an example they want to charge £4k per the same thing! Under the changes in the leasehold reform act this is likely to change - but in the meantime there are opportunist agents ripping off leaseholders and some of our leaseholders are retired and very unhappy (furious) on the increased charges for the same thing being forced on them! all over a judgement that was not balanced or took account from existing agreements. Thank you for your comment much appreciated!

Mervin SX

12:26 PM, 10th December 2022, About 3 months ago

Reply to the comment left by Jill Lucas at 10/12/2022 - 12:23
Hi Jill,

I understand and appreciate your frustration, as I am also facing similar situations with buildings where we had undergone RTM.

But as I said previously, I feel it's a fair judgement by the Supreme Court and it removes any sort of ambiguity and ad-hoc agreements such as the ones you have previously had (does not matter how small or large the estate is).

In your case, the best bet is to challenge your Freeholder's managing agent and then take the matter to the FTT. I am confident, this will almost always, lead to a fair outcome!

Jill Lucas

13:06 PM, 10th December 2022, About 3 months ago

Hi Mervin
Thanks for your comments and our agreement was not adhoc and registered with the land registry. I already manage 4 properties with no issues. Going back to Settlers Court this judgement was more geared to mega blocks but the key principal remains that at the start of the RTM process agreement should be reached and signed off on areas of responsibility as this is what RTM is all about taking control to the benefit of leaseholders. At present the sharks are swarming and there is a feeding frenzy of managing agents/freeholders looking to exploit leaseholders. The last thing on retired leaseholders minds is going to tribunals and legal action. The very best option is to make changes to the legislation and have written to Michael Gove's levelling up team as well as to the defense lawyers re Settlers Court to endeavour to re-balance this judgement which favours agents and freeholders.

Mervin SX

13:26 PM, 10th December 2022, About 3 months ago

Hi Jill,

Whatever you say, whatever agreements you were, whether it is registered at the Land Registry or not, the Supreme Court order brought a much needed clarity on the legislation to say "managing shared estates did not fall into the definition of the legislation, and therefore the right to manage could not extend to those parts".

The Supreme Court order also discredited the previously judged Gala Unity case.

What more clarity on the legislation would you like? What does retired & older leaseholders got to do with applying the law correctly? If one can't do this themselves, they should hire a competent lawyer to represent their case at the FTT.

I am 41, a private portfolio landlord, director of 5 RTM blocks of apartments and I am also the managing agent for a further 7 RTM blocks.

In my opinion, two things that could be done in future is to:

1 - abolish leasehold and introduce commonhold.

2 - give leaseholders the right to choose a managing agent, even for areas owned & managed by a freeholder.

In your case, you must take the matter to the FTT (if your complaint to the managing agent remains unresolved).

Jill Lucas

16:33 PM, 10th December 2022, About 3 months ago

Hi Marvin
Thanks for your comments good to talk to someone in the know! The law is the law - although RTM is all about control - and whilst Settlers Court has reversed the original judgement it has in my view created an in-balance and we are dealing with the fall-out of an agreement that was working well. I am a portfolio landlord and (self) manage small blocks with no issues beyond this one! As regards retired and older leaseholders many of them do not understand leasehold law and just accept invoices without challenging them, I have come across this a lot with enfranchisement which is another story as I support people to buy freeholds! We will of course go to FTT as necessary but will endeavour to address the balance of this judgement. Whilst I am keen to continue to build my business I am also keen to support leaseholders and ensure charges are fair and reasonable. Thank you for your comments and I wish you continued success.

Mervin SX

16:47 PM, 10th December 2022, About 3 months ago

Hi Jill,

I respect your knowledge and experience in the leasehold and RTM area.

I think the Supreme Court judgement has not created an in-balance - it was providing a much needed clarity to the EXISTING legislation.

And rightfully, it should backdate any other agreements that were made by wrongfully interpretting the law.

I hope you are able to get out of your particular situation by either undergoing a degree of negotiation with your current managing agents or challinging them at the FTT or considering enfranchisement. Good luck!

Jill Lucas

17:49 PM, 10th December 2022, About 3 months ago

Hi Mervin

Thank you for your response and respect your knowledge as you sit on the other side of the fence! Right to Manage is what it says on the tin and enables leaseholders to have control. This judgement has reversed this and will of course suit some unscrupulous managing agents/freeholders who can take advantage and profit from this short lived reversal,which is likely to change with the Leasehold Reform Act. We are challenging the judgement with support from the LKP, Levelling up team, the media etc. Interesting times ahead! So watch this space

Mervin SX

19:12 PM, 10th December 2022, About 3 months ago

Hi Jill,

I am not on the other side of the fence. I am a portfolio landlord, I have supported an array of successful RTM claims and I also own/operate a block management company. But I respect the law.

The Supreme Court order has not changed the RTM legislation. The judgement has allowed the legislation to be interpreted correctly without the need for ad-hoc agreements - i.e. RTM only applies to the building.

How can you challenge a Supreme Court Judgement without change in legislation?

If so, how are you doing it?

Jill Lucas

19:53 PM, 10th December 2022, About 3 months ago

Hi Mervin
OK apologies for my misinterpretation. We also respect the law but it is a gift to managing agents and freeholders and unfair for leaseholders to pay double for the same provision of service as previously! so this legislation needs to be at the very least tweaked possibly thru challenges and changes in case law. We are communicating with key influencers in respect of the changes to the leasehold reform act, MP's, media etc. The issue is that our leaseholders are now being invoiced with excessive charges for the same service without justification. This I am sure you are aware is not uncommon practice in an unregulated market . I run a successful business and enjoy the rewards but dont like to see leaseholders being ripped off as I get hassled with increased service charge complaints. I am not on a mission and am looking to reach out to others impacted by Settlers Court. The word agreement is key to the way forward.

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