First-tier Tribunal varies management order for property

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AK/LAM/2016/0001 & LON/00AK/LVM/2019/0003 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] manager) Representative : [COMPANY], solicitors Respondents : [redacted] 2) [COMPANY]

3) The Occupational Leaseholders of [ADDRESS] 4) [NAME] (not included at point 3) Representative : 3) & 4) Mr [COUNSEL] (Flat 9) Type of [NAME] : Variation of an order for the appointment of a manager Tribunal members : Judge [NAME] and venue of hearing : 26 June 2019 at 10 [ADDRESS] [POSTCODE] Date of Decision : 29 July 2019

DECISION

ORDER As notified to the parties orally at the end of the hearing on 26 June 2019, the Tribunal has made the following order.

UPON the parties agreeing that Mr [NAME] should be discharged as the Tribunal-appointed manager, subject to conditions to be determined by the Tribunal;

2 AND UPON the Tribunal being satisfied that Mr [NAME] should be discharged as the Tribunal appointed manager, the last day of his appointment being on 20 August 2019; AND UPON the Tribunal being satisfied that the management order should be varied to appoint Mr [NAME] of [COMPANY] as the Tribunal-appointed manager from 21 August 2019 IT IS ORDERED THAT: The management order is varied and extended by the insertion of the below paragraphs to follow from paragraph 7 of the management order (on page 6 of the order): “AND IT IS FURTHER ORDERED BY WAY OF VARIATION THAT 8. Mr [NAME] will be discharged as the appointed manager with effect from midnight on 20 August 2019;

9. Mr [NAME] of [COMPANY] (“BCJ”) is appointed as the Tribunal-appointed manager with effect from 21 August 2019 and shall from that date be the manager for the purposes of this order;

10. The duration of this order is varied so that it will expire at midnight on 20 August 2022. [NAME] for an extension must be made prior to the expiry of that date. If such an [NAME] is made in time, then the appointment will continue until that [NAME] has been finally determined.

11. Mr [NAME] fee for being a manager will be £350 plus VAT per month in respect of the whole premises. In addition, the managing agent, BCJ will charge a fee of £250 plus VAT per annum for each flat and £120 plus VAT per annum for each garage in the premises. Additionally, if required by the landlord to collect ground rent, Mr [RESPONDENT] may deduct 5% plus VAT of sums collected; fees for arranging and supervising any scheme of work arranged by the manager or BCJ will equal 10% off the aggregate contract value, plus VAT; the additional charge for dealing with solicitors’ enquiries on transfer will be no more than £375 plus VAT, payable by the [NAME]; and further tasks outside of the above duties will be charged separately at the following hourly rates: £95 plus VAT for staff under supervision, £150 plus VAT for senior staff/a director, or £200 plus VAT, if the matter requires the manager’s personal attention;

12. By 10 July 2019, Mr [NAME] is to provide Mr [NAME] a list specifying all those documents he considers necessary to discharge his functions under this order. Mr [NAME] shall use reasonable endeavours to provide those documents within 28 days of the request. Such documents are to be in an orderly, readable format. In the event of a dispute as to the provision of a document(s) under this paragraph, Mr [NAME] and/or Mr [NAME] may apply to the Tribunal for further directions;

3 13. By 25 September 2019, Mr [NAME] shall provide to Mr [NAME] all sums of money, if any, held on trust relating to the performance of his functions under this order, together with all accounts and closing and opening balances; and, at the same time, all sums held as ground rent (in a separate account) shall be transferred to the new manager. If, however, there is a shortfall, Mr [NAME] is to reimburse Mr [NAME] upon receipt of the closing accounts, balances and receipts, within 5 weeks, namely by 30 October 2019, which will give Mr [NAME] time to raise demands of leaseholders to cover these payments. In case of dispute, [NAME] may be made for directions, with each manager providing their competing calculations;

14. Mr [NAME] shall give [COMPANY] 3 months’ notice to terminate its contract. Otherwise, all contracts in the name of Mr [NAME] entered into for the discharge of his functions under this order, i.e. the contracts for cleaning, gardening, pest control and the door-entry system, are assigned to Mr [NAME] in his capacity as the replacement Tribunal appointed manager, and Mr [NAME] is to assume all past, present and future liabilities under all such contracts, albeit with the ability to terminate those contracts if he so wishes;

15. Mr [NAME] is to be indemnified by the service charge [NAME] for all reasonable legal and professional costs he incurs relating to the reasonable performance of his functions under this order and/or for all reasonable legal and professional costs he incurs relating to the appointment of and the handover to Mr [NAME], at the rate of £225 plus VAT per hour, but on production of time records showing the time spent and tasks carried out by Mr [NAME] in respect of the handover. This paragraph shall continue to have effect notwithstanding any future determination of this order;

16. To aid an orderly transfer, Mr [NAME] shall direct [COMPANY] to issue credit notes to leaseholders for half the invoices otherwise payable on 1 July 2019; but the corollary of that is that the lessees must pay the half due on 1 July 2019;

17. In so far as there are arrears owed by the leaseholders, Mr [NAME] is directed not to collect them in the remaining period of his appointment, but responsibility for collecting any deficits will fall on Mr [NAME] shoulders;

18. Mr [NAME] may send out voluntary invoices, for the last three months of the financial year, four weeks before his appointment and, in any event, if necessary, he may raise a supplementary demand under the management order in the four-week period after it begins. This power to raise a supplementary demand arises from the management order itself and is not dependent upon any lease provisions;

19. On or before 30 June 2020, [NAME] shall report on the progress of his period of management;

4 20. Mr [NAME] and/or Mr [NAME] have permission to apply to the Tribunal for further directions relating to this Order and/or the discharge of Mr [NAME] as the Tribunal-appointed manager and the appointment of and the handover to Mr [NAME];

21. Any party [NAME] an [NAME] relating to this order, including as varied, capable of affecting Mr [NAME] rights and liabilities with respect to this order shall give Mr [NAME] notice of the [NAME];

22. Mr [NAME] will register the amended management order against the freehold title of the premises at HM Land Registry, as a restriction under the Land Registration Act 2002, or any subsequent Act.” As a consequence of the orders made above, the Management Order is also varied by substituting the new manager’s fees for those in paragraphs 18 to 26 of Schedule Two of the Order and the new manager’s Draft Management Plan for that in Schedule Three. A copy of the new Management Plan, is annexed to this Decision.

THE [NAME] &

REASONS FOR THE

DECISION Background 1. This was an [NAME] under section 24(9) of the Landlord and Tenant Act 1987 to vary an existing management order made on the 22 February 2016 in respect of [ADDRESS] [POSTCODE] (“the Premises”). Under that order, Mr [NAME] [NAME] was appointed as the Tribunal’s manager for a period of three years. The order and his appointment were extended on 20 February 2019 on the same terms “until four weeks after the determination of Mr [NAME] [NAME] for a variation of the order, or until further order of this Tribunal.” 2. By his [NAME], Mr [NAME] initially sought a further extension of his appointment. However, by the time of the Tribunal’s hearing of his [NAME] on 26 June 2019, Mr [NAME] had changed his mind and no longer sought an extension of his appointment. Instead, he wished to be discharged as manager, citing differences with some of the leaseholders in the premises. It is not necessary to go into those differences in this decision, save to say that leaseholders proposed their own, alternative manager, Mr [NAME], to replace Mr [NAME]. The hearing 3. The hearing took place on the 26 June 2019. It was attended by (i) Mr [COUNSEL] of counsel and Ms [COUNSEL], director of [COMPANY], both on behalf of the existing manager, Mr [NAME]; and (ii) by Mr and Mrs [NAME] of Flat 9, who represented leaseholders, accompanied by Mrs [NAME] of Flat 3, together with Mr [NAME], the proposed new manager, and his colleague [NAME] of the [NAME] of [COMPANY].

5 4. At the beginning of the hearing, Mr [COUNSEL] of counsel handed in a draft order for the discharge of Mr [COUNSEL] and, if the Tribunal were satisfied, with the appointment of Mr [NAME] in his place.

5. The issues to be considered were: (i) Discrepancies between Mr [NAME] most recent accounts and the previous budget for the premises, which had been highlighted by Mr [NAME]; (ii) Allied to that, leaseholders’ dissatisfaction with past costs incurred by the existing manager; (iii) The suitability of Mr [NAME] as an alternative manager and the possible variations of the management order; (iv) Allied to that whether the Tribunal should discharge Mr [NAME] from his appointment; and (v) Whether and, if so, to what extent the Tribunal should make an order under section 20C of the Landlord and Tenant Act 1985, limiting the ability of the manager to pass his costs through the service charge. Discrepancies in the recent accounts 6. Mr [NAME] had previously highlighted several apparently significant discrepancies in the recent accounts submitted by Mr [NAME]. Mr [NAME] described these as “juvenile errors” and said that the figures had been “made up” and they neither reflected the figures in the earlier budget, nor the costs that had been incurred.

7. Mr [COUNSEL] of counsel accepted that the discrepancies identified by Mr [COUNSEL] in the recent accounts were correct, but denied any suggestion that there had been any improper conduct on the part of Mr [NAME]. He explained that that accounts had been sent out to leaseholders before [NAME] had reviewed them, that he is in the process of doing so now, that revised accounts will be issued in due course and that letter explaining this and apologising to leaseholders was already in the post.

8. Although Mr [NAME] said that he was not impressed and felt that this was a “standard list of excuses” only made because someone had the temerity to challenge the figures in the accounts, he agreed that it would be difficult for the Tribunal to deal with these matters at the hearing. However, he said that the leaseholders’ concern underlined why they had no further trust in Mr [NAME] as the manager.

9. The Tribunal explained that it did not have the capacity to deal with the account discrepancies at the hearing, nor with the dissatisfaction expressed by the leaseholders with past costs incurred by Mr [COUNSEL]. It agreed with Mr [COUNSEL] of counsel that if we agree to a discharge of Mr [COUNSEL] appointment, he will need to prepare final accounts in due course and the true position regarding expenditure will become known

6 at that point. Leaseholders are protected against unreasonable expenditure by the manager, by their ability to make an [NAME] to challenge his costs under sections 19 and 27A of the Landlord and Tenant Act 1985.

10.

For these reasons, the Tribunal made no determinations and will take no further steps in relation to these matters, unless and until a separate [NAME] is made by leaseholders to the Tribunal; something that, as will become clear from this decision, is probably best left until after the closing accounts are available and a full handover of management to Mr [NAME] takes place. The proposed manager, Mr [NAME]

11. Mr [NAME] is a chartered surveyor with 40 years’ experience. He is a director of the Birmingham-based management practice of [COMPANY] (“BCJ”). The Tribunal had the benefit of reading his [NAME] to become the Tribunal-appointed manager [at pages 117-118 of the bundle] and his proposed Schedule of Functions and Services, including his proposed fees and expenses, and the Draft Management Plan [125-130]. Mr [NAME] was present at the hearing to speak to these documents and to answer questions from the Tribunal.

12. While he operates mainly from Birmingham, Mr [NAME] visits the [NAME] of BCJ from time to time. His initial training was in London so he was “familiar with the patch”. If appointed as a manager, he plans to instruct BCJ to manage the premises from the [NAME], which already manages residential property in London, including leasehold blocks. His colleague, Mr [NAME], confirmed that this was the case. Mr [NAME] involvement would be to oversee the management and ensure that it was done properly. He would seek an appointment of three years initially, though his understanding was the leaseholders wish to apply for the Right to Manage (“RTM”) under the Commonhold and Leasehold Reform Act 2002, so that his appointment, if approved, would (he understood) terminate automatically upon the RTM being acquired.

13. His proposed fee arrangements reflected his role of overseeing the management of the premises. If appointed, his fee for being a manager would be £350 plus VAT per month in respect of the whole premises. The managing agent, BCJ would then charge, in addition, a fee of £250 plus VAT per annum for each flat and £120 plus VAT per annum for each garage in the premises. Additional charges were set out in paragraphs 19 to 22 of the document at page 127 of the hearing bundle.

14. Regarding insurance, he planned to take over the insurance currently in place until renewal, when he would seek alternative quotations.

15. He was very familiar with the RICS code which he described as “fundamental” and he emphasised that BCJ were members of ARMA.

7 16. Mr [NAME] said that he would do what he could to facilitate the leaseholders’ proposed [NAME] for the RTM.

17. His professional indemnity insurance was £2m for every claim. His firm also carried public liability insurance though he was not sure what it was.

18. Mr [NAME] read a copy of the draft order prepared by Mr [COUNSEL] of counsel for the first time at the hearing, and said that he was happy with it. There was an extended discussion about how a handover would work, how Mr [NAME] would obtain monies from leaseholders and what was likely to be transferred by Mr [COMPANY] to Mr [NAME] at handover. Currently, there appears to be some £550 in the manager’s account, according to Ms [NAME], a figure that Mr [NAME] found incredulous. Whatever the true position, it is clear that there may be little or no money being handed over to a new manager on transfer. Mr [NAME] was asked how, in those circumstances, he would propose to manage the premises; and discussion centred around a possible amendment of the management order, to allow for the new manager to raise a supplementary demand.

19. These discussions prompted Mr [NAME] to press the Tribunal to make an immediate order appointing Mr [NAME] as manager with effect from 1 July 2019. This would then mean that the current 6-monthly service charge demands issued by Mr [NAME], payable on 1 July 2019, would become payable directly to Mr [NAME]; and, in Mr [NAME] view “75% of leaseholders would pay them”. Mr [COUNSEL] of counsel strongly opposed any “hand-brake turn” that would result from [NAME] an immediate order. He said that Tribunal-appointed managers only manage properties that are not easy from the start and that Mr [NAME], like any manager, needs a reasonable period of time to effect an orderly handover; and indeed, he is entitled to reasonable period for this purpose. 20. [NAME] had not read the leases of properties at the premises, he had become aware that there was an issue requiring potential lease variations. He responded by saying that he would leave that to the RTM Company, as and when the RTM was acquired. He had visited the premises and confirmed that a lot of money had been spent on them in recent years. Some aspects were good, like the doors; but there was also some neglect such as the gardens. He felt that the premises need more day to day management but, otherwise, he would be looking to maintain the status quo until the RTM was acquired by the leaseholders.

21. One thing Mr [NAME] said would be beneficial to minimise delays would be for him to be provided with basic information by [NAME], well before the handover date. [NAME] would know what was needed, but it included a list of leaseholders, their names and addresses; the current arrears position; what contractors are appointed and on what terms.

8 22. There was then a discussion of the terms of any order that might be made, following the paragraphs of the draft order prepared by Mr [NAME]. Regarding existing contracts, Mr [NAME] would be prepared to take over all of these on handover, except for the contract with the [COMPANY], which Ms [NAME] said was on a three-month notice period. It appears that the only contracts which Mr [NAME] might take over were those for the cleaner, the gardener, pest control and the door entry system. He had already mentioned taking over the insurance, which appeared to be paid monthly by direct debits. The Tribunal’s decision 23. After a break of 35 minutes, the Tribunal gave an oral decision to the parties, following the outline of the Order above, which is now confirmed by this written Decision.

24. The Tribunal determines that Mr [NAME] shall be discharged as Tribunal manager, with the effect from midnight on 20 August 2019. In his place, Mr [NAME] is appointed as a Tribunal manager for the period of three years, with effect from 21 August 2019 and expiring on 20 August 2022.

25. Mr [NAME] appointment will be on same terms as the management order first made on 22 February 2016, as amended by this Decision and Order above. A copy of the revised management order is attached to this Decision.

REASONS 26. The Tribunal accepts the reasons put forward by Mr [NAME] for his discharge and acknowledges that relations between him and leaseholders have broken down. The Tribunal is also satisfied that Mr [NAME] is a suitable person to replace Mr [NAME] as Tribunal-appointed manager.

27. The Tribunal makes all the above orders to ensure the smoothest handover of management from Mr [NAME] to Mr [NAME] and ensure that each manager has sufficient funds to discharge their financial responsibilities before and after handover. In the event that any problems arise, either manager may apply to the Tribunal for further directions. Timing and duration of Mr [NAME] appointment (paragraphs 8,9 & 10 of the Order above)

28. Although there is a superficial attraction in starting Mr [NAME] appointment from 1 July 2019, in the Tribunal’s view that is simply too soon. Mr [NAME] was appointed in circumstances that demanded more effective management of the premises. Whether criticism of him is justified, or not, it is clear that Mr [NAME] has done good things for the premises during his tenure. It would be quite inappropriate, in the Tribunal’s view, to terminate Mr [NAME] appointment suddenly, giving

9 him in effect only two working days to wind up his management; or the more so, since the Tribunal understands, he is currently in Dubai.

29. It is only reasonable that the existing manager is given reasonable notice of the termination of his appointment, so that he can bring matters under his control to a conclusion. Therefore, the Tribunal accepts Mr [NAME] proposal that eight weeks’ notices of termination of the appointment should be given; and the Tribunal would give Mr [NAME] a further five weeks after that to handover all final accounts, opening and closing balances and funds in his possession (though, if these are all ready and available sooner, [NAME] is urged to pass them over before the end of this period).

30. Three years should be sufficient for Mr [NAME] to resolve the outstanding issues at the premises. This is especially so, given the expectation that his appointment may well be superseded by leaseholders’ prospective [NAME] to acquire the Right to Manage. The manager’s fees (paragraph 11)

31. The tribunal considered that the proposal put forward by Mr [NAME], to charge a nominal fee for his oversight of the management order, but to instruct his firm BCJ to deal with day-to-day management, for the fees proposed, were reasonable in the circumstances of the case; and none of the leaseholders objected to these proposed fees. The same applied to the list of additional fees that are reflected in the Order above. Advance provision of documents (paragraph 12)

32. The early provision of documents by Mr [NAME] to Mr [NAME] is to assist in preparations for the handover and will be conducive to a smooth transition, with minimum disruption in management of the premises. The timetable was agreed with the parties present at the hearing. Transfer of funds (paragraph 13)

33. The Order provides for the transfer of funds from Mr [NAME] to Mr [NAME] on handover, or for the reimbursement of Mr [NAME], if there is a shortfall; and the mechanism and timetable for doing so were agreed with the parties present. Contract with [COMPANY] (paragraph 14)

34. As will be seen from the Order, the Tribunal directs Mr [NAME] to give three months’ notice to terminate the contract with [COMPANY].

35. At the hearing, the Tribunal indicated that the notice should expire on 25 September 2019. Ms [NAME] is a director of the company with Mr [NAME] and she agreed, on behalf of [COMPANY], to accept such notice (once Mr [NAME] is notified of the direction and gives notice that expires on this date), even if strictly speaking it may be a day or two short of three months. However, the Tribunal has reconsidered and would now require

10 the notice period to expire on or before 29 September 2019. This should then remove any question of any contractual notice being short, gives Mr [NAME] additional time to comply with his contractual obligations, notified to his counsel and Ms [COUNSEL] at the hearing, and aligns neatly with the quarter day. Payment of Mr [NAME] for the handover (paragraph 15)

36. The Tribunal takes the view that Mr [NAME] is entitled to be paid up to the end of his appointment at midnight on 20 August 2019. His also entitled to reasonable fees for his time in preparing for and for executing the handover, at the rate of £225 plus VAT per hour. However, given the evident distrust of leaseholders, payment will be subject to production of time records showing the time spent and tasks carried out by Mr [NAME] in respect of the handover; and, as with all costs incurred by the existing manager, will be subject to the test of reasonableness; Invoices issued by [NAME] (paragraph 16)

37. With the regard to invoices issued by Mr [NAME] that are payable by the lessees on the 1 July 2019, in those invoices Mr [NAME] seeks 6 months’ worth of advanced service charges. However, his appointment will now only last further two months, with a further month for final handover procedures. It should therefore be sufficient for Mr [NAME] to receive 3 months advanced charges for the costs rightly to be incurred up to the point that his appointment is terminated. For this reason, the Tribunal includes in the Order a requirement that Mr [NAME] give directions to [NAME] to issue credit notes to lessees for half of the amounts of each of the invoices; but the corollary of that is that the lessees must pay the half due on 1 July 2019. Arrears (paragraph 17)

38. In so far as there are arrears owed by the leaseholders, Mr [NAME] is directed not to collect them in the remaining period of his appointment, but responsibility for collecting any deficits will fall on Mr [NAME] shoulders. The reason for this direction is to avoid action by Mr [NAME] that might overrun the termination of his appointment. Voluntary invoices (paragraph 18)

39. To smooth out the transition process, Mr [NAME] may send out voluntary invoices, for the last three months of the financial year, four weeks before his appointment and, in any event, if necessary, he may raise a supplementary demand under the management order in the four-week period after it begins. This power to raise a supplementary demand arises from the management order itself and is not dependent upon any lease provisions.

11 Report on progress (paragraph 19)

40. To satisfy the tribunal that handover has occurred smoothly, on or before 30 June 2020, [NAME] shall report on the progress of his period of management. Further applications (paragraphs 20 & 21)

41. Provision is made so that both Mr [NAME] and Mr [NAME] are able to return to the Tribunal for further directions, if problems or disputes arise. Registration of the management order (paragraph 22)

42. Mr [NAME] will register the varied management order at HM Land Registry against the landlord’s freehold title, which continues the position under the existing order. Further disputes by leaseholders 43. Any disputes that leaseholders have in respect of costs incurred by Mr [NAME] should wait until the handover to Mr [NAME] is complete. [NAME] for an order under section 20C of the 1985 Act 44. Mr [NAME] said leaseholders suspected that they had been overcharged for legal fees. The hearing had arisen from Mr [NAME] [NAME] to extend his management order. Mr [NAME] had involved solicitors for the past six months and he now sought to recover this from the service charge. His simple question was: why should lessees pay for this? 45. Mr [NAME] said that Mr [NAME] had been reasonable in [NAME] the [NAME] to extend the appointment but that, when disputes with leaseholders became more intense, he took a reasonable view as Tribunal-appointed manager and was rightly stepping aside to allow leaseholders to put forward someone they trusted more. It was not a case of the manager accepting the allegations made. It was not also a case of a manager who had achieved nothing: Mr [NAME] confirmed that things had been achieved at the premises. It was just that trust between the parties had broken down and the fair thing to do was for Mr [NAME] to be discharged. There were no grounds upon which it would be just and equitable for the Tribunal to make an order under section 20C of the 1985 Act. In any event, leaseholders were protected against any unreasonable charges by sections 19 and 27A of the Landlord and Tenant Act 1985. Decision on the section 20C [NAME]

46. The Tribunal has considered the competing arguments but determines that it is not just and equitable for any order to be made under section 20C of the 1985 Act. The reasons for reaching this conclusion are that there is insufficient information to draw any conclusions about Mr

12 [NAME] management of the premises. The Tribunal acknowledges that there are strong views on both sides. However, the current [NAME] was made at the time Mr [NAME] considered that an extension of his management order was in the best interest of the premises; and it is only through this process that the leaseholders dissatisfaction is so great that Mr [COUNSEL] has decided to step down. Through his counsel, he has assisted the Tribunal and, indeed the leaseholders process of affecting the handover from himself to a new manager. It therefore does not seem just and equitable to make an order preventing him from passing his costs of the proceedings through the service charge.

47. This is not to say that leaseholders are left without a remedy. Mr [NAME] costs must still be reasonable and leaseholders’ rights are protected by a potential [NAME] under sections 19 and 27A of the 1985 Act, when the history of Mr [NAME] management, the reasonableness and payability of his costs, maybe considered in detail.

48. However, it may be that once final accounts are prepared, a full reconciliation has taken place and a smooth handover to Mr [NAME] has been affected leaseholders may consider that their efforts are best focused on [NAME] the future work, rather than raking over disputes of the past.

49. A copy of the new management plan to be substituted for Schedule Three of the original management order, is annexed to this decision.

Name: [NAME]: 29 July 2019

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the Tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit.

13 The new Management Plan to be substituted for Schedule Three of the original management order

Draft Management Plan: [ADDRESS] Description 1) The Manager will enter into a management agreement with [NAME] & James (BCJ) to act as the Manager's managing agents.

2) Instruct BCJ to open [three] client accounts with its preferred bank, [COMPANY] ([NAME]), including: a) A general client account for day to day use (Service Charge account) b) A client account for holding reserve funds (Reserve account) c) [A client account for holding ground rents on behalf of the Freeholder (Ground Rent account)]

3) Instruct BCJ to write letters regarding these client accounts to [NAME].

4) Instruct BCJ to write to the [NAME] with a copy to [NAME], with details of where to deliver any documents and/or property in their possession that relate to the management of the Property 5) Instruct BCJ to write to [NAME], with a copy to the [NAME], enclosing a copy of the Management Order, with details of where to deliver any documents and/or property in its possession that relate to the management of the Property and also requesting the transfer of all monies held by [NAME] in connection with the Property, together with all bank statements, ledgers, accounts and other financial information. 6) [NAME] to provide information about the Property and its Leaseholders in electronic format for uploading into BCJ's property management software in order that BCJ can manage the Property in the most cost effective and efficient way. At least once a month BCJ reconciles each bank account with the information held on its system.

7) Instruct BCJ to write to all Leaseholders of all of the Flats enclosing: a) A copy of the Management Order b) A copy of the contract between the Manager and BCJ c) A letter of introduction from BCJ, including inter alia details of the lead contact, BCJ's contact details and information about BCJ's out-of-hours emergency telephone service and details about the [NAME] client accounts; and

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d) An information sheet about the Manager and the role of the Manager, in particular the difference between a Tribunal-appointed manager and a managing agent.

8) First inspection of the common parts at the Property by the Manager, to identify any issues that require urgent attention.

9) Instruct BCJ to manage any work urgently required to resolve or triage any critical problems 10) If from the papers delivered up by the Landlord or [NAME] the Manager can identify any contractors working at the Property, instruct BCJ to advise them that the Property is under new management and ask them to send any unpaid invoices to BCJ.

11) In the event that there is no obvious basic maintenance regime, including cleaning of the internal common parts and window-cleaning, instruct BCJ to get quotes for a reasonable level of basic maintenance, taking into account the age of the building, the size of the common parts and the state of the common parts that might need a major overhaul in the medium to long-term.

12) Instruct BCJ to write to the Leaseholders enclosing a final demand in respect of any unpaid service charges, advising Leaseholders that if payment in full is not made within 7 days, debt recovery action will commence without further notice for the principal sum plus interest pursuant to the Lease(s), at the rate of 10% per annum plus costs.

13) If any letters before action are sent to Leaseholders in respect of unpaid service charges, instruct BCJ to commence proceedings against any Leaseholders whose accounts remain in arrears at the end of the seven-day period.

In the absence of evidence of any recent reports in the papers that are provided by [NAME], instruct BCJ to commission: a) A Health and Safety assessment b) A Fire Risk assessment c) An Asbestos survey; and d) An Electrical Engineer's report 15) Subject to the outcome of BCJ inspections and commissioned reports (if any are required), instruct BCJ to procure a plan for a chartered surveyor to resolve any

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urgent and/or medium to long-term issues. If an inspection from a chartered surveyor is required, the Manager will inspect the Flats and the Garages with the surveyor. On this occasion, the chartered surveyor will be asked to identify what if anything needs to be done to repair the internal common parts.

16) In the absence of any evidence that Rent has been properly demanded, instruct BCJ to demand Rent in the prescribed form from the Leaseholders.

17) In the absence of any evidence that Service Charges have been paid on account for the current financial year, pursuant to the terms of the Leases, instruct BCJ to demand an "on account" payment as a once-a-year contribution to the [NAME] in anticipation of future schemes of work.

18) Instruct BCJ to review the existing budget for the financial year to 31.12.2019, taking into account any reports or advice from previous inspections by chartered surveyors or others in relation to any schemes of work to the external and/or internal common parts at the Property, likely to include refurbishment of the common parts.

19) In relation to any proposed schemes of major work the Manager will instruct BCJ to initiate a formal consultation in compliance with statute and any case law prevailing for the time being.

20) In relation to any proposed scheme of work, the Manager will instruct BCJ to establish the pro rata liability of [NAME] (if any) for which it might be necessary to instruct a surveyor and to demand any such sums from [NAME] at the same time as the balance is demanded pro rata from the [NAME].

21) Within 12 months instruct BCJ to sign one or more contracts for major works at the Property, provided BCJ is in cleared funds and any requisite consultation process has been properly conducted.

22) Continuous ongoing management of the Property for the duration of the Order and the Management Agreement between the Manager and BCJ.