First-tier Tribunal Appoints Property Manager Under Landlord and Tenant Act

OUTCOME: Allowed

© CROWN COPYRIGHT 2019

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

CHI/21UD/LAM/2019/0007

Property

:

[ADDRESS], St Leonards-on-Sea, East Sussex

Applicant: [redacted]

:

[NAME]

Respondents

:

[redacted]

:

Ms [COUNSEL]. [COUNSEL] of Application

:

Appointment of a manager

Tribunal Member(s)

:

Judge D. R. Whitney Mr B. H. R. Simms FRICS

Date and Venue of Hearing

:

20th September 2019 at Havant Justice Centre

Date of Decision

:

11th October 2019

DECISION

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The Application

1. The Applicant is the owner of the leasehold interest in the [NAME], [ADDRESS], St Leonards-on-Sea. The Respondent is the freeholder and occupier of the remainder of [ADDRESS], St Leonards-on-Sea.

2. By application dated 1st April 2019 the Applicant sought the appointment of a manager pursuant to Section 24 of the Landlord and Tenant Act 1987. He proposed that Mr [APPELLANT] should be appointed by the tribunal as a manager.

3. Directions were issued on 30th May 2019 which were subsequently amended. Both parties did file a statement of case although the Respondents statement dated 12th September 2019 was served late following applications being made by the Applicant.

4. A bundle of papers was filed and references in [ ] are to pages within that bundle.

5. Both parties attended the hearing. The Applicant was represented by Mr [COUNSEL], solicitor, of [NAME]. The Respondent was represented by her friend Ms. [RESPONDENT]. [RESPONDENT]. Mr [NAME] was also in attendance for the whole of the hearing.

The Law

6. The relevant law to this application may be found in section 24 of the Landlord and Tenant Act 1987 (“the 1987 Act”).

Hearing

7. The below is a record of the most salient points of the hearing. It is not a verbatim record of everything said at the hearing.

8. Ms [RESPONDENT] confirmed she was representing the Respondent as a friend and to support her in respect of the Application.

9. At the start of the hearing Mr [NAME] sought leave to introduce an additional bundle of documents consisting predominantly of emails between the parties and their legal advisers. These had been sent the day before to the Respondent and her representative. Essentially these were to reply to matters raised in the late statement of the Respondent. Ms [RESPONDENT] confirmed she did not object to the same being included and these were added to the bundle [Tab5].

10. Mr [NAME] had also supplied a skeleton argument of the points he wished to make. This had been supplied to the Respondent.

3 11. Mr [RESPONDENT] confirmed two points of his client’s case were withdrawn. Firstly his client accepted there was no breach of the RICS code in respect of fire assessment as the Property did not have any communal areas. Secondly his client was not pursuing the allegation that the Respondent had trespassed on the patio area to the rear of the Applicants [NAME].

12. Mr [NAME] referred to the lease [Tab 2 pages 10-32]. The [NAME] was defined by reference to a plan [Tab 2 page 32]. This showed that the gas meter was within a lobby demised with the Applicants [NAME]. Everything not demised was “the Retained Parts” [Tab2 page 12].

13. Mr [NAME] took the tribunal through the various covenants contained within the lease paying particular regard to those raised by both parties for their respective cases.

14. Mr [NAME] contends that whilst there is no express covenant of quiet enjoyment as a matter of common law this is implied into the lease.

15. Ms [NAME] wished to refer to a pdf of a document she had on her telephone relating to an HMO licensing scheme for Hastings. She did not have hard copies. The tribunal refused at this stage to allow an adjournment for her to obtain hard copies. It explained she could ask the Applicant questions if she so wished.

16. The Applicant then gave oral evidence. He confirmed that his witness statement and exhibits [Tab 2 pages A to 101] was true and accurate.

17. Mr [APPELLANT] confirmed he believed messages and calls he received [40- 42] were from Mr [RESPONDENT], the Respondent’s son. He had reported these to the police as he was concerned as to the safety of his parents whose address was known to the Respondent.

18. Mr [APPELLANT] explained that in a telephone call he received from [NAME], Mr [APPELLANT] admitted kicking in the front door to Mr [APPELLANT]’ [NAME] and made threats towards Mr [APPELLANT] and his family.

19. Mr [APPELLANT] explained he had lived in Australia for the past 10 years. He had not visited the [NAME] personally for many years using letting agents to sub-let the same on his behalf. He denied having ever being asked to provide access to the gas meter. He confirmed he had refused to provide a key.

20. Mr [APPELLANT] stated he had never been given quotes for any works or had received any consultation notices.

21. In 2004 he had undertaken works to the bathroom including installing new lights. He had also installed a new kitchen. In or about 2011/2013 he had installed new windows for which he had a FENSA certificate. He accepted he could not recall discussions with the Respondent over

4 this but the wooden windows were rotten and had tried to replace with a similar style of window.

22. In respect of the satellite dish Mr [APPELLANT] confirmed he had discussed with the Respondent [Tab 5 page 14] was a letter of consent signed by the Respondent dated February 2011.

23. Mr [APPELLANT] believed [NAME] had a key for the [NAME] provided by tenants as supported by an email from the Respondent [Tab 5 page 15].

24. Mr [APPELLANT] confirmed that in his opinion prior to 2015 paid everything the Respondent requested. Since that date he had paid all amounts which had been validly demanded relying on the advice of his solicitor. He confirmed he had never been provided with service charge accounts.

25. Mr [APPELLANT] explained currently he was in limbo as felt unable to let the [NAME] and had been unable to sell the same as the Property was not being managed.

26. Ms [APPELLANT] began her cross examination.

27. Mr [APPELLANT] stated that when he changed his windows these matched those in Ms [NAME] part of the Property. Subsequently she had changed her windows so that they did not match.

28. At this point the tribunal adjourned for 10 minutes to allow Ms [NAME] time to prepare her cross examination and to look at what documents she would wish to refer Mr [APPELLANT] to.

29. Ms [NAME] referred Mr [APPELLANT] to the lease plan [Tab 2 page 32]. Ms [APPELLANT] tried to imply the trellis on the wall forming the boundary of the rear patio area was not within Mr [APPELLANT] demise.

30. Mr [APPELLANT] confirmed in his opinion the trellis was sitting on top of the wall.

31. Mr [APPELLANT] confirmed he had only seen the letter from Mr [APPELLANT] [Tab 4 page 10] when he received the Respondent’s statement. In his opinion this was not a quote.

32. Mr [APPELLANT] confirmed he had addressed various issues with his tenants and even asked one tenant to leave following complaints from the Respondent.

33. Ms [APPELLANT] challenged Mr [APPELLANT] over his suggestion messages were from [NAME]. Mr [APPELLANT] stated he believed these were from Mr [APPELLANT] as on same day as he had a call from him and language in messages similar to that used on the telephone.

5 34. Mr [APPELLANT] confirmed his UK address for the landlord to use had always been the same address she was provided with when he first purchased the [NAME] being that of his parents. His email address had also never changed. He denied that he had been hiding from the Respondent.

35. Mr [APPELLANT] confirmed he paid all amounts demanded upto 2015 including those set out in an email [Tab 4 page 36]. After 2015 he has followed his solicitor’s advice and only paid amounts properly demanded in accordance with the lease and statute.

36. I respect of the bathroom lights first put in in 2004. She asked me to change the original lights to closed LED’s and he did this. His evidence was that such lights do not emit heat. He believed he had verbal consent.

37. He was not aware of any damage and in fact had the whole [NAME] decorated in or about 2016/2017. His recollection was that the last time he visited the [NAME] was in 2010. Since then he has only visited the UK once before this trip in 2016 and he did not believe he visited the [NAME] then.

38. Mr [APPELLANT] confirmed he received a complaint that his agent was using the driveway. He said he spoke to his agent and told them they could not use the driveway.

39. Ms [APPELLANT] asked various questions of Mr [APPELLANT] as to his various tenants. Mr [APPELLANT] explained he had always used managing agents to deal with the lettings. He said the majority of his tenants had complained about the actions of the Respondent.

40. Before finishing the cross examination the tribunal reminded Ms [NAME] that she would not have a further opportunity to question Mr [APPELLANT].

41. Ms [NAME] then opened the case for the Respondent and called Ms [RESPONDENT]. Ms [RESPONDENT] confirmed her statement and exhibits [Tab 4] was true and accurate.

42. Ms [NAME] stated she was selling her Property. She did not feel safe in her home.

43. Turning to access for the gas meter she stated that certain of Mr [APPELLANT]’ tenants did provide access. Others would not and caused problems.

44. She believed Mr [APPELLANT] was the problem. She could not afford to undertake works on her own and was not prepared to pay out for Mr [NAME] share.

45. Turning to the proposed agent she believes if he wants a managing agent he should pay and that it should be someone more local. She accepted it would be good to have someone managing.

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46. Mr [RESPONDENT] then cross examined the Respondent.

47. She confirmed she works in housing support for the over 65’s. She managed this Property but no others. She confirmed she was not familiar with the RICS code. Ms [APPELLANT] did suggest she was familiar with the Landlord and Tenant Act 1985.

48. Ms [APPELLANT] stated that the Property involves only two people and for her it is not a business but her home. She lives there with her son.

49. Ms [NAME] stated that there was no evidence from her son as no one had asked for this. Her son has no regard for Mr [APPELLANT] or his tenants. Her son is ill and has his own problems.

50. Ms [NAME] stated that she did not read any emails, letters or documents which Mr [NAME] sent to her. She suggested this was because Mr [NAME] had been rude to her (this was denied by Mr [NAME]). She said she had left everything to Ms [NAME].

51. Ms [COUNSEL] explained she could not afford to appoint a solicitor. She stated this is part of the reason she had never taken action to forfeit in respect of the breaches.

52. Ms [APPELLANT] suggests she pays for everything as Mr [APPELLANT] argues about everything and she can not bear dealing with matters. She stated she did send quotes for redecoration in or about 2015.

53. On being questioned as to Mr [NAME] statement [Tab 4 page 10] she stated she asked Mr [NAME] to write his statement and she told him she had received no contributions. She accepted there were no other quotes within her bundle of evidence but suggested Mr [APPELLANT] would have these.

54. Ms [APPELLANT] denied she was lying. She was fed up with the whole situation and decided it was better to not communicate with Mr [APPELLANT] or anyone on his behalf.

55. Mr [APPELLANT] asked her about the [NAME]. She felt there was no need for Mr [APPELLANT] name to be included on the [NAME]. She said she had read the lease but did not notice the requirement to include Mr [APPELLANT]’ interest.

56. Ms [APPELLANT] stated that the respondent was hampered because Mr [APPELLANT] was neglectful of his own [NAME]. If he had looked after his [NAME] then he and Ms [NAME] could work together. She stated Ms [NAME] does not object to a manager but does not think she should have to pay anything towards the costs associated with the same. The Respondent had previously undertaken works at her own expense.

7 57. Mr [NAME] relied upon his skeleton argument. He suggested there was a complete failure to demand monies or produce accounts.

58. If had been done properly works could have been undertaken. The lower part of the building comprising [NAME] [NAME] had not been decorated since 2004. His client denied receiving any quotes. Further he suggested his client had been subject to abuse and harassment. He suggested the failure of Mr [NAME]. [NAME] to attend or give any witness evidence was telling.

59. The relationship has in his submission clearly broken down. The appointment of an independent person will be for the benefit of both parties. He submits the Respondent is not capable of managing the building.

60. Mr [NAME] gave evidence. His curriculum vitae and management plan was in the bundle [Tab 2 pages 92-101].

61. Mr [NAME] confirmed he was willing to be appointed by the tribunal. He currently has 8 appointments plus an additional recent appointment. He would look to work co-operatively with the parties.

62. Currently he and his firm manage in excess of 100 blocks consisting of about 750 units of property.

63. On questioning by the tribunal over the length of his appointment he confirmed he does not currently have any plans to retire or dispose of his business. It was his intention that whilst he was appointed day to day work would be undertaken by his firm [NAME].

64. On questioning by Ms [NAME] he confirmed that he understood he was answerable to the tribunal. He had visited and viewed the outside of the property. He has seen a lease and the draft order and was content with the same.

65. The tribunal questioned the parties over the draft order whether it should include reference to the proportions payable by each given ms [NAME] did not have a lease over her part of the building being everything else not demised to Mr [APPELLANT].

66. Mr [NAME] agreed this may be sensible. Mrs [NAME] said she understood she was responsible for 75% of the costs (being the balance not recoverable from Mr [APPELLANT]) but she can’t afford to pay anything. She stated Mr [NAME] would have to take her to court.

Determination

67. After a short adjournment the tribunal confirmed orally to the parties that it was satisfied that it should appoint Mr [NAME] from the date of

8 the hearing to manage the Property for a term of 3 years essentially in line with the draft management order.

68. In reaching its determination the tribunal had regard to all of the oral evidence given and the documents within the hearing bundle.

69. The tribunal was satisfied that a Notice pursuant to section 22 of the 1987 Act had been served by Mr [APPELLANT] upon the Respondent [Tab 2 pages 56-66]. The Respondent in her oral evidence accepted she had not dealt with various of the matters raised.

70. In particular the tribunal finds that no valid service charge demands have been issued. Recently certain valid demands for payment of [NAME] and ground rent have been received. No accounts have ever been produced. The tribunal finds that the respondent was not aware of her obligations under the lease or the RICS Service Charge Residential Management Code 3rd Edition.

71. It was plain there was animosity between the parties. This is amply demonstrated by the issue involving Mr [NAME]. [NAME]. The tribunal finds on a balance of probabilities that it was Mr [APPELLANT]. [APPELLANT] who was attempting to telephone Mr [APPELLANT] repeatedly on 9th December 2018 and who sent the text messages [Tab 2 pages 41-42].

72. Ms [NAME] appears to have little understanding of her responsibilities and obligations as a freeholder. She admitted she did not realise she had to include Mr [APPELLANT]’ interest on the [NAME]. Her emails within the bundle demonstrated she was not aware of the need to undertake statutory consultations and obtain proper quotes and estimates. Whilst the tribunal accepts the remainder of the building not occupied by Mr [APPELLANT]’ [NAME] it was she who had granted this lease and as such should be aware of the need to comply with the lease and the various statutory requirements.

73. The tribunal was satisfied that the lack of proper management of the Building as a whole and in particular in respect of repairs and maintenance was causing a significant adverse effect on Mr [APPELLANT]’ ability to sell or let the [NAME]. In particular the tribunal relied on various documents notably the totality of Tab 5.

74. The tribunal is satisfied that there is little prospect of the two parties to this application being able to work together to ensure that repairs and maintenance are undertaken in accordance with the lease and the Property is adequately managed. To that end in accordance with section 24 of the 1987 Act the tribunal is satisfied that it is just and convenient for a manager to be appointed.

75. Mr [NAME] presented to the tribunal as a knowledgeable professional with many years’ experience including acting as a tribunal appointed manager. He understood his principal duty would be to the tribunal and to manage in accordance with the Order.

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76. The tribunal considered carefully his fees and determined that those proposed by him for the subject Property were reasonable. The tribunal noted that he held appropriate [NAME] for himself personally and his firm.

77. The tribunal was satisfied that Mr [NAME] was an appropriate person to be appointed by the tribunal.

78. Turning to the draft order in general terms the tribunal was happy with the same. The tribunal determines that the order should record the proportions by which any and all charges levied by Mr [NAME] are payable. The order has been amended to include such provision.

79. The tribunal attaches to this determination the Order made appoint Mr [NAME] for three years from the date of the hearing.

80. The tribunal reminds both parties that Mr [NAME] is an independent individual whose primary responsibility is to answer to the tribunal. The parties are urged to work with him for the benefit of them both individually and the Property as a whole.

Judge D. R. Whitney

RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking

© CROWN COPYRIGHT

ORDER UNDER SECTION 24 OF THE LANDLORD AND TENANT ACT 1987

1. In accordance with section 24(1) of the Landlord and Tenant Act 1987 (“the 1987 Act”) Mr [APPELLANT] of [NAME], [ADDRESS], Hove, East Sussex (“[NAME]”) is appointed as the manager of the property at [ADDRESS], St Leonards on Sea East Sussex [POSTCODE] (‘the Property’).

2. The order shall continue for a period from 3 years from 20 September 2019. If the parties wish to apply for any extension of the order, they are encouraged to do so at least three months before the order expires.

3. The Manager shall manage the Property in accordance with: (a) The directions and schedule of functions and services attached to this order; (b) The obligations of the [NAME] in the lease by which the lower ground floor [NAME] at the Property is demised (“the Lease”) in particular with regard to repair, decoration, provision of services and [NAME] of the Property; and (c) The duties of a manager set out in the Service Charge Residential Management Code (‘the Code’) or such other replacement code published by the Royal Institution of Chartered Surveyors and approved by the Secretary of State pursuant to section 87 Leasehold Reform, Housing and Urban Development Act 1993.

4. The Manager shall be entitled to exercise the following powers: (a) The power to delegate to colleagues at [NAME], appoint accountants, architects, solicitors, surveyors and other professionally qualified persons as may be reasonably required to assist him in the performance of his functions and pay the reasonable fees of those appointed; (b) The power to appoint any agent or servant to carry out such function or obligation which the Manager is unable to perform himself or which can more conveniently be done by an agent or servant and the power to dismiss such agent or servant; (c) The power to open and operate client bank accounts in relation to his management of the Property and to invest monies pursuant to his appointment in any manner specified in the Service Charge Contributions (Authorised Investments) Order 1998 and to hold those funds pursuant to section 42 of the 1987 Act and to keep an account or accounts established for that purpose of monies received on account of the reserve fund;

2 (d) The power to rank and claim in the bankruptcy, insolvency, sequestration or liquidation of the parties to these proceedings or of any [NAME] owing monies under the Leases; (e) The power to insure the Property as a cost to the service charge fund for the Property (“the Service Charge Fund”); and (f) The power to raise a reserve fund for the Property.

5. The Manager shall not be personally liable to make any payments due from the applicant, the respondent or their successors (‘[NAME]’) but shall instead be entitled to demand and collect sums from [NAME] for the purposes of making such payments.

Name:

Date:

3 DIRECTIONS

1. From the date of the appointment and throughout the appointment the Manager shall ensure that he has appropriate professional indemnity cover in the sum of at least £1,000,000 and shall provide copies of the current cover note upon a request being made by any of [NAME] or the Tribunal.

2. That no later than 28 days after the date of this order the respondent shall provide all necessary information to and arrange with the Manager an orderly transfer of responsibilities. No later than this date, the respondent shall transfer to the Manager all the accounts, books, records and funds (including, without limitation, any service charge reserve fund).

3. That no later than 28 days after the date of this order the respondent shall supply the Manager with a closing service charge account for the Property.

4. The Manager is entitled to such disclosure of documents as held by the respondent, her advisors or agents as is reasonably required for the proper management of the Property.

5. For the avoidance of doubt the Manager shall apportion the service charges as follows: • [NAME], 22 [ADDRESS] [POSTCODE] 25% of the service charge costs • The remainder of 22 [ADDRESS] [POSTCODE], currently owned by Ms [NAME] [NAME] 75% of the service charge costs 6. The Manager shall be entitled to remuneration (which for the avoidance of doubt shall be recoverable as part of the service charges payable under the Leases) in accordance with the Schedule of Functions and Services attached.

7. The Manager shall be entitled to apply to the Tribunal for further directions.

8. The Manager shall register the order against the freehold title of the Property (Title Number ESX30194) pursuant to section 24(8) of the 1987 Act and is entitled to recover his reasonable legal costs for doing so from the Service Charge Fund.

9. The Manager shall register a restriction against Title Number ESX30194 in Land Registry standard form N, with the following wording “No disposition of the registered estate by the proprietor of the registered estate or by the proprietor of any registered charge is to be registered without the written consent of Mr [NAME] of 193

4 [ADDRESS] [POSTCODE]” who is entitled to recover his reasonable legal costs for doing so from the Service Charge Fund. 10. In the event of any inconsistency between these directions and/or the schedule of functions and services set out below and the Lease, the provisions of these directions and/or the schedule of functions and services shall prevail.

SCHEDULE OF FUNCTIONS AND SERVICES

1. [NAME] 1.1 Maintain appropriate building [NAME] for the Property. 1.2 Ensure that the Manager’s and the [NAME]’s interests are noted on the [NAME] policy.

2. Service charge 2.1 Prepare an annual service charge budget, administer the service charge and prepare and distribute appropriate service charge demands to [NAME]. 2.2 Set, demand and collect service charges, [NAME] premiums and any other monies due under the Lease (other than ground rent). 2.3 Raise advance and ad hoc service charge demands outside the terms of the Leases, which shall be payable within 21 days of the date of the demands. 2.4 Collect from [NAME] such sums as he shall specify at his discretion to be fair and reasonable reserve fund contributions as reasonable provision for costs, expenses and outgoings that are not of a recurring nature. 2.5 Instruct solicitors to recover unpaid service charges, [NAME] premiums and any other monies due from [NAME] (other than ground rent). 2.6 Place, supervise and administer contracts and check demands for payment of goods, services and equipment supplied for the benefit of the Property with the service charge budget. 2.7 The Manager is not required to investigate the service charges or the accounting position for any period prior to his appointment.

3. Accounts 3.1 Prepare and submit to [NAME] an annual statement of account detailing all monies received and expended. The

5 accounts to be certified by an external auditor, if required by the Manager. 3.2 Maintain efficient records and books of account which are open for inspection by [NAME]. Upon request, produce for inspection, receipts or other evidence of expenditure. 3.3 Maintain on trust an interest-bearing account(s) at such bank or building society as the Manager shall from time to time decide, into which service charges and all other monies arising under the leases shall be paid. 3.4 All monies collected will be accounted for in accordance with any relevant Association of Residential Managing Agents (ARMA) Code of Practice.

4. Maintenance 4.1 Deal with routine repair and maintenance issues and instruct contractors to attend and rectify problems. Deal with all building maintenance relating to the services and structure of the Property. 4.2 The consideration of works to be carried out to the Property in the interest of good estate management and making the appropriate recommendations to the respondents and the lessees. 4.3 The setting up of a planned maintenance programme to allow for the periodic re-decoration and repair of the exterior and interior common parts of the Property. 4.4 Instruct a building surveyor in connection with the matters detailed at paragraphs 4.1-4.3 above, as and when he considers appropriate.

5. Disputes and litigation 5.1 The Manager shall be entitled to take such action as may be necessary, including bringing Court or Tribunal proceedings, to secure the compliance of [NAME] with their obligations in respect of the Property, as prescribed under the Lease or under the terms of this order or by operation of law. Such action may include forfeiture and/or action to recover service charges, the Manager’s fees and/or any other relevant contributions due. 5.2 For the avoidance of doubt, the entitlement under clause 5.1 above includes the right of the Manager to take whatever legal action is necessary to recover any liabilities or contributions due from [NAME] in respect of the flats at the Property or the Property as a whole, the costs of such action to be paid from the Service Charge Fund and recoverable from [NAME] irrespective of the provisions of the Leases. The Manager shall be entitled to an indemnity for both his own costs reasonably

6 incurred and for any adverse costs order from the Service Charge Fund.

6. Fees 6.1 For the duration of this order the Manager shall be entitled to charge the following fees: (a) A one-off set up fee of £1,000 (One Thousand Pounds) plus VAT to cover 10 hours work, plus an hourly rate of £100 plus VAT for any additional time reasonably required to complete the following tasks: (i) Initial inspections of the Property (ii) Consideration of documents (iii) Preparation of proposed management plan (b) An annual management fee of £650 (Six Hundred and Fifty Pounds) plus VAT and disbursements for the basic management duties listed at (i)-(x) below (“the Standard Management Fee”): (i) Collection of service charges (ii) Payment of all invoices (iii) Maintaining service charge income and expenditure details for handover to an accountant to produce certified year end accounts (iv) Managing day to day repair issues, including arranging contractors to carry out repairs with the costs of repairs to be paid for from the Service Charge Fund (v) Providing a telephone number for emergency out-of- hours calls of a maintenance nature (vi) 4 visits to the Property per annum to carry out on- site inspections (vii) Communicating with the lessees but not beyond reasonable correspondence (viii) Providing a point of contact for maintenance issues (ix) Annual reporting to the applicant and the respondents, in their capacity as the freeholders of the Property (x) Oversight of health and safety compliance. 6.2 The Standard Management Fees may be increased annually, on the anniversary of the order, in line with inflation. 6.3 Additional fees at the rate of 5% plus VAT and disbursements on any works over £1,000 to include, where required, the preparation and service of any notices pursuant to section 20 of

7 the Landlord and Tenant Act 1985 (as amended). For the avoidance of doubt these fees are payable in addition to costs of any architects, surveyors or other appropriate persons for the preparation of specifications and/or schedules of works, including the obtaining of tenders by them and contract administration. 6.4 An additional charge shall be made for the arrangement, claims handling and brokerage of insurances for the Property, public liability, engineering and employee cover on the basis of a fee of 20% of the [NAME] premium if the [NAME] is brokered and handled by the [NAME]’ [NAME] department and not by outside brokers. 6.5 A reasonable additional charge for dealing with solicitors’ enquiries on sales and transfers of the flats at the Property, payable by the [NAME]. 6.6 Tasks which fall outside of set-up requirements or the Standard Management Fee are to be charged separately using the following hourly rates; £100 plus VAT for the Manager or a principal of [NAME], £75 plus VAT for an associate at [NAME] and £60 plus VAT for property managers at [NAME]. The recovery of outstanding service charges shall give rise to an administration charge payable by the [NAME] of £30 plus VAT for each letter written. The registration of dispositions shall give rise to a reasonable charge to be levied by the Manager’s nominated solicitors. 6.7 The fees at clause 6.6 above may be increased annually on the anniversary of the order in line with inflation.

7. Complaints procedure 7.1 The Manager shall operate a complaints procedure in accordance with or substantially similar to the requirements of ARMA.