There are an estimated 1.8 million leasehold properties in the UK*, meaning that millions of flats and their occupants are potentially at risk from injury or illness. National statistics show that fire and smoke are among the top three causes of death in the home and annual domestic accidents involving electric currents can reach close to 3,000.**
Table 1. The proportion of flats without relevant health and safety assessments
|Proportion of flats without relevant assessment/survey||Number of UK flats that could be affected|
|Health & Safety||64.8%||1,166,283|
By law, any block of flats with common areas should undertake health & safety and fire risk assessments, typically on an annual basis and have electrical installations assessed every five years. The property must also be surveyed for the presence of asbestos and, if found, monitored on a periodic basis.
The failure to undertake these assessments and address issues identified could be disastrous for leaseholders, and have legal implications for Directors of any Right To Manage, Share of Freehold or Residents Management Committee that mistakenly thinks their managing agent is taking care of such things. It may even invalidate buildings' insurance in the event of a serious incident.
Steve Wylie, Director at Urban Owners, comments:
"The lax attitude of many managing agents towards safety is unacceptable. Unprofessional firms are routinely neglecting their legal responsibilities, and following this research it is hard to see how leaseholders could continue to trust the traditional managing agent industry.
With many managing agents also imposing unnecessary and excessive service charges on unsuspecting leaseholders, the research is a damning indictment of an industry characterised by outdated working practices and poor levels of customer service. The solution is for leaseholders to take control of the management of their block for themselves. As an added benefit, leaseholders who take control and choose to run their own building typically see a significant reduction in their service charges and have total transparency over the use of funds."
The failure of most managing agents to carry out basic health and safety checks comes despite the fact that the use of a managing agent can, on average, inflate service charges by 30%, equating to approximately £400 per flat per year. Unscrupulous practices such as accepting sales commission on insurance and contractors, and arranging unnecessary works are widespread in the industry and can add hundreds of pounds to service charges for leaseholders.
However, under the Commonhold and Leasehold Reform Act (2002), leaseholders have the power either to buy the freehold or to acquire the 'Right to Manage' of their block from the freeholder, and are increasingly using these rights to take control of the block management.
Urban Owners has launched Block Administration Services, a new system of managing leasehold blocks of flats. The flat owners, rather than a managing agent, direct how money is spent and how services are delivered on their behalf. By using Block Administration Services, flat owners can avoid expensive block management fees and ensure transparency over the use of their funds. Not only does this save money, time and stress, but it can also make the property more saleable.
* SOURCE: Association of Residential Managing Agents (www.arma.org.uk)
** SOURCE: DTI Consumer Safety Unit, 2002 (statistics no longer collated)
The shocking figures, revealed by block management experts Urban Owners, mean that blocks are typically paying £965.33 more than necessary for insurance cover, money that goes straight into the pockets of managing agents in addition to their regular management fee. However, leaseholders can avoid these excessive charges by taking control of their block through the Right-to-Manage (RTM) process.