Tribunal Appoints Manager Due to Breach of Lease Obligations

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : LON/00AG/LAM/2024/0120 [NAME] : [ADDRESS], London NW3 [NAME] : [NAME] [NAME] (flat1) and [NAME] [COUNSEL] and Dr [COUNSEL] (flat 3) Representative : [NAME]. [COUNSEL] (representative of [NAME] [COUNSEL]) [NAME] :

[NAME] [NAME] and [NAME] (flat 4) [NAME] [NAME] [NAME] and Mrs [COUNSEL] (flat 5)

Representative

Respondent: [redacted] : Appointment of Manager Tribunal member(s) : Judge [NAME]- Professional Member [NAME]- Lay Member

date of hearing And Venue

: 24 & 25 October 2024 at 10 [ADDRESS] [POSTCODE] Date of decision : 9 December 2024

DECISION

1. In accordance with section 24(1) Landlord and Tenant Act 1987 [[NAME] of [[APPELLANT]] (‘the Manager’) is

2 appointed as manager of the [NAME] at [[ADDRESS] ("the [NAME]’).

2. The order shall continue for a period of 3 years from [ the date of this decision]. [NAME] for an extension must be made prior to the expiry of that period. If such an [NAME] is made in time, then the appointment will continue until that [NAME] has been finally determined.

3. The Manager shall manage the [NAME] in accordance with: (a) The directions and schedule of functions and services attached to this order; (b) The respective obligations of the landlord and the leases by which the flats at the [NAME] are demised by the Respondent and in particular with regard to repair, decoration, provision of services and insurance of the [NAME]; 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 register the order against the landlord’s registered title as a restriction under the Land Registration Act 2002, or any subsequent Act.

5. An order shall be made under section 20C Landlord and Tenant Act 1985, that the Respondent’s costs before the Tribunal shall not be added to the service charges. Introduction 6. This is a decision on an [NAME] by the Applicants, [NAME]. [NAME], [NAME] of flat 1. And Dr. [NAME] and [NAME]. [NAME] of flat 3. By an [NAME] dated 12 June 2024, made under section 24 of the Landlord and Tenant Act 1987 (‘the section 24 [NAME]’) the Applicants applied for an order appointing [NAME] [NAME] [NAME], (of [NAME], [NAME] Management Services), as manager of the premises.

7. The [NAME] (and the management company currently responsible for the management of the subject premises) is [ADDRESS] a Tenants Management a company owned by the [NAME], with one share allocated to the [NAME](s) of each flat.

8. The premises which is the subject of the [NAME] is a converted Victorian house, in a conservation area, which has been divided into 5 flats.

9. For several years, prior to this [NAME], the management of the subject premises, such as the upkeep of the common parts had been

3 undertaken by [NAME] [NAME] the [NAME] of flat 3. However, in recent years there has been increasing disagreement about the management of the subject premises.

10. This led to the decision to appoint [COMPANY] as managing agents, however, their appointment which begun o1 May 2022, was short lived and ended in November 2023.

11. The principal protagonists are the Applicants the [NAME] of flats 1 and 2, and the [NAME] of flats 4 and 5, who have been named as [NAME] in these proceedings.

12. The Tribunal was provided with a bundle and supplementary bundle of over 1465 pages, much of which comprising details of the history of disagreements and antagonism between the parties. As such the Tribunal decided that given that the parties continue to have a relationship as [NAME], there was little value in repeating or apportioning blame for these issues. However, the disagreements have meant that both parties complain of a lack of management which has led to difficulty in agreeing and collecting the service charges and resulted in on-going disrepair at the premises.

13. Against that background, the Applicants served a Section 22 notice on 8 May 2024, on the grounds that-: “1. The landlord is in breach of their obligations owed to the tenants under the lease.

2. The landlord has made/proposed unreasonable service charges.3. The landlord is in breach of the RICS Service Charge Residential Management Code of Practice approved by the Secretary of State under Section 87, Leasehold Reform, Housing and Urban Development Act 1993.4. Other circumstances exist which make it just and convenient to appoint a manager.” 14. The Applicant applied to the Tribunal for an appointment of manager order under section 24 of the Landlord and Tenant Act 1987 (‘the 1987 Act’).

15. Following the [NAME] to the Tribunal directions were given on the papers on 3 July 2024. Following a written request from two of the [NAME], Judge Nicol directed that the [NAME] ([NAME] and Mrs [NAME] and [NAME] [NAME] who had applied to be joined as interested parties be joined as Applicants to these proceedings.

16. It was noted that although they agreed to the appointment of a manager and did not dispute that grounds existed for an appointment, they were opposed to the appointment of [NAME] [NAME]. At the date of the hearing put forward [NAME] [NAME] as an alternative manager. The issues

4 17. The issues for the Tribunal to determine are-:Whether the Tribunal is satisfied that the Applicant has established any of grounds specified in section 24(2) of the 1987 Act for [NAME] an order; (ii) whether it is just and convenient to make an order in all the circumstances of the case; (iii) whether the proposed manager is a suitable appointee; and if an appoint(iv)the terms and duration of any appointment.

The Law 18. Section 24 of the Landlord and Tenant Act provides: (1) The appropriate tribunal may, on an [NAME] for an order under this section, by order (whether interlocutory or final) appoint a manager to carry out in relation to any premises to which this Part applies— (a) such functions in connection with the management of the premises, or, (b) such functions of a receiver, or both, as the tribunal thinks fit. (2) The appropriate tribunal may only make an order under this section in the following circumstances, namely (a) where the tribunal is satisfied— where the tribunal is satisfied— (i) that any relevant person has failed to comply with any relevant provision of a code of practice approved by the Secretary of State under section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 (codes of management practice), and (ii) that it is just and convenient to make the order in all the circumstances of the case; (i) that any relevant person either is in breach of any obligation owed by him to the tenant under his tenancy and relating to the management of the premises in question or any part of them or (in the case of an obligation dependent on notice) would be in breach of any such obligation but for the fact that it has not been reasonably practicable for the tenant to give him the appropriate notice, and (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) that it is just and convenient to make the order in all the circumstances of the case.

The Hearing 19. The hearing which was held over two days was attended by the parties listed above, although Mrs [NAME] and Mrs [NAME] did not attend on the first day. In addition, both [NAME] [NAME] and [NAME] [NAME] attended on the first day of the hearing and answered questions concerning how they would undertake the role of manager at the premises. 20. [NAME] [APPELLANT] (the first applicant) was assisted by [NAME] [COUNSEL], who although he had been a former solicitor was at the hearing in the capacity of a lay representative, he was not representing Dr [COUNSEL] or [NAME]

[NAME] although the cases put forward for appointment of [NAME] [NAME] was supported by all three [NAME]. 21. The [NAME] were represented by [NAME] [COUNSEL] a solicitor of Keystone Law. Flat 2 was owned by a company, who did not appear and had not made any representations.

Preliminary Matters 22. At the hearing, [NAME] [APPELLANT] objected on behalf of the first applicant to [NAME] [APPELLANT] being put forward as manager. He noted that no directions had been made for the [NAME] to put forward their own manager. He submitted that no [NAME] had been made by the [NAME], and that [NAME] [NAME] had not met with the first or second applicants. There was no information on the public liability insurance cover provided by his company. He also referred to the lack of a management plan.

23. He stated that the Tribunal should determine the [NAME] based on the management plan put forward by [NAME] [NAME] which was a generic plan used by the Tribunal and was being put forward by the [NAME].

24. On behalf of the 3 & 4 applicants, [NAME] [NAME] noted that [NAME] [NAME] had served a witness statement in August 2024, and that the [NAME] were aware that the 3 & 4 Applicants objected to the appointment of [NAME] [NAME]. They were also aware from the correspondence between the parties that they intended to put forward [NAME] [NAME].

25. He noted that plan put forward by [NAME] [NAME] was generic and followed the format of the Tribunal’s draft order. He stated [NAME] [NAME] had previous appointments, and given this [NAME] [NAME] could broadly adopt the plan that was within the bundle. He submitted that a further plan had not been written by [NAME] [NAME] to save costs.

26. The Tribunal noted the lack of directions concerning the [NAME] nominating a manager, however, it had regard to the correspondence from the [NAME] which set out their intention to put forward [NAME] [NAME]. It had regard to the Tribunal Procedure (First-tier Tribunal) [NAME] Chamber) Rules 2013, rule 7, (b) which enabled a tribunal to give a direction orally during a hearing. The Tribunal asked itself whether there would be any prejudice to the First and Second Applicant should it consider [NAME] [APPELLANT] as a potential manager? 27. It noted that there was a witness statement within the bundle setting out [NAME] [NAME] information and how he intended to carry out the responsibilities of management.

6 28. The Tribunal also had regard to the overriding objective particularly Rule 3 (b) which required the Tribunal to avoid unnecessary formality and seek flexibility in the proceedings. It also noted that the Tribunal’s role in these proceedings was to determine whether circumstances existed for the appointment of a manager, and if it considered it necessary the Tribunal was [NAME] a decision, which was normally the prerogative of the [NAME]. In this regard the Tribunal considered that to carry out its responsibilities, it would benefit from hearing from both proposed managers prior to make its decision.

29.

Accordingly, the Tribunal decided to allow the [NAME] and [NAME] respondent to put forward [NAME] [RESPONDENT].

30. The Tribunal decided that it would adopt the following procedure; The Tribunal decided that it would hear from [NAME] [NAME] first, and that as such it would be inappropriate for [NAME] [NAME] to be present, it would then hear from [NAME] [NAME] and would then determine whether the conditions set out in Section 24 were met.

31. Its decision to hear from the proposed managers was without Prejudice to any decision concerning whether the circumstances existed at the [NAME] for a tribunal appointed manager. [NAME] of [COMPANY]

32. The Tribunal heard from [NAME] [NAME], who was the managing director of [COMPANY], who provided a complete [NAME] service which encompassed all aspects of [NAME] management. 33. [NAME] [NAME] in his witness statement set out the following-: “... I have worked within the field of [NAME] management for over 23 years, and I have worked at [NAME] since 2001. Between 2001 and 2008 I was a Director of [COMPANY], responsible for finance, business administration and [NAME] management. Since 2008 I have been a Director of [COMPANY], responsible for finance, business administration and [NAME] management. [COMPANY] is part of [COMPANY].” 34. Within his appendices he had helpfully provided, his insurance details, his complaints procedure, the management plan and handover checklists. 35. [NAME] [NAME] was asked about the size of the [NAME]. He stated that there were 8,500 flats, and 45 [NAME]. [NAME] manager had about 100 flats.

36. He stated that he specialised in block management and that he had developed an expertise in properties which required a tribunal appointed manager. [NAME] [NAME] told the Tribunal that he had built a good team behind him and that many of the properties that he had been appointed

7 to manage, had continued with his company as managing agent once the initial appointment had ended.

37. He was asked about the management order which was within the bundle. He stated that he used a template put forward by the Tribunal. [NAME] [NAME] told the Tribunal that normally it was his experience that the Tribunal preferred that you depart from the template as little as possible. He stated that if appointed he would carry out a survey and put together a schedule of work and should the generic template prove inadequate would ask the Tribunal for additional powers if it was needed.

38. He was asked by the Tribunal for information about how he would manage the [NAME] on a day-to-day basis, and what would be his first steps. He stated that he would use a [NAME] manager who would be responsible for managing the [NAME] and liaising with the [NAME]. He said that initially he would collect a budget of £1000.00. This would be used to clean and test the fire alarm and carry out fire safety work which was in his opinion the immediate priority. He would then put together a budget for the service charges. He was aware that there were some funds in hand of approximately £2000.00. He was aware of issues with the leases in that the leases did not make provision for 100% of the service charges, and this would be remedied. 39. [NAME] [NAME] told the Tribunal that the building was “quite tired in terms of repair, the steps were not safe. There was a lack of fire alarm, and the [NAME] needed decorating. However, there was a need affordability into account to ensure that the [NAME] could afford the work.

40. He stated that he would appoint a [NAME] manager to do the day-to- day management as this was allowed by the Tribunal, however he would act as the ultimate decision maker.

41. During cross examination he was asked about the other services carried out by his company such as cleaning, surveying and building and whether there was a potential conflict of interest, as there was the possibility that his company would tender for this work. He explained that each unit in the company operated separately so that there would be no conflict of interest. He stated that legal action, if necessary, would be taken by a lined company.

42. In answer to specific questions about how the service would be provided. [NAME] [NAME] told the Tribunal that both his finance department and [NAME] were based in South Africa. The [NAME] manager who would be [NAME] [NAME] [NAME] she was currently undertaking her TPI course. When asked about how this would work in practice, he stated that the time difference between the UK and South Africa was about an hour time difference and he did not consider that this was a barrier.

43. He would have remote meetings with [NAME] [NAME] every Monday morning where they would discuss issues that had arisen and decisions

8 that needed to be taken. Regarding her liaising with the [NAME], he stated that she would also be able to meet with the [NAME] by Teams and would be available to deal with any issues which arose on the phone. In respect of inspections of the [NAME], [NAME] [NAME] told us that he had teams of [NAME] inspectors, who would inspect four times a year and carry out video inspections. He stated that this model had been used successfully in other tribunal appointments. He was asked about the time commitment to manage the [NAME]; his estimate was between 2.- 3.5 hours a week.

44. In respect of the remote model of management, the Tribunal noted that this was not specifically set out within his witness statement.

45. He was asked by [NAME] [NAME] about the reviews on Google for [NAME] which had only received an average of 3 stars, and issues had been raised about the responsiveness of the company. [NAME] [NAME] accepted that there were mixed google reviews, and that some were negative, however his position was that there were [NAME] who for example had legal action taken against them, and it was not surprising that those [NAME] would provide negative reviews. Also, where services had gone well it was less likely that those who were in receipt of good service would be motivated to provide positions reviews. He accepted that this was something that the company was actively monitoring and considering the feedback. He stated that the company had increased in size and that they were carefully monitoring reviews and were working to put things right.

46. He told the Tribunal that he had no prior relationship with the [NAME], and that he assumed they had come across him by looking at previous tribunal decisions. He stated that although he had no prior professional relationship with any of the [NAME], he had subsequently been asked to manage a business by [NAME] [NAME]. He stated that he had not assisted the first or second applicants in applying to the Tribunal although he had provided some limited advice and had reviewed the [NAME] documents to make sure that it made sense.

47. He told the Tribunal that he had seen the correspondence between the parties, and he understood that the relationship had broken down with the [NAME], however he understood that his duty was to the Tribunal rather than to any [NAME] who had appointed him. In answer to questions he stated that the [NAME] were aware that many of the functions of management would be carried out by a manager who was based in South Africa.

48. The Tribunal had also been provided with details of his company’s indemnity insurance, and heard details from [NAME] [NAME] that he understood the RICS Code of guidance and would manage the [NAME] in line with the code of guidance. [NAME] [NAME] discloses that he would receive commission for placing insurance, as this was an industry norm. He had set out information concerning his fees.

9 49. In answer to questions from the Tribunal concerning conflicts of interest, he explained that in respect of any work tendered for by [NAME] would operate to the same deadline as other companies and all tenders would be blind and opened together, given this his company would not have an advantage.

50. He told the Tribunal that he had experience of managing other properties which were like the subject [NAME] and were in a similar condition.

[NAME] [NAME] of [COMPANY] 51. [NAME] [NAME] had also provided a witness statement, he had also been appointed to manage properties on behalf of the Tribunal, and like [NAME] [NAME] had very recent appointments. He had 40 years' experience as a [NAME] manage. He had established his [NAME] management business [NAME] since 2007. He set out that his company was regulated by RICS and is an [NAME] member.

52. In answer to [NAME]’s questions concerning his employees, after some hesitation confirmed that there were 8 employees.

53. He told the Tribunal that He was initially contacted by [NAME] [NAME], He had not been told that he I had been recommended. [NAME] [NAME] had told him about the building and asked whether I would be interested in managing it. This occurred in June 2024. 54. [NAME] [NAME] stated that he was asked to provide a management contract which he did. He had inspected the [NAME], although he had not met all the owners he had met with the [NAME]. He stated that he did not think it was appropriate to meet the [NAME]. As he considered that it would be better and more appropriate to meet with them if he was appointed. He was shown around the building by [NAME] [APPELLANT] and the [NAME].

55. He told the Tribunal that he managed about 100 properties which ranged from five to twenty units per [NAME] in size although he had one block which was made up of 85 units. He employed 5 [NAME]. He also set out that he had been a Tribunal appointed manager for several properties. 56. [NAME] [NAME] told the Tribunal that he had not discussed the work which needed to be undertaken at the [NAME]. However, he had formed the view that the following work would need to be undertaken as the building was in substantial disrepair, and that work was needed to the drainage, guttering downpipes, roofing, and external repairs and decorations including the windows which appear to have dry rot.

57. He also stated that it would be necessary to undertake a Health and Safety report. [NAME] [NAME] stated that the first step would be to send a

10 welcome letter to [NAME] introducing himself to the [NAME]. He would then set up a meeting with the [NAME]. He confirmed that in respect of the appointment, he always managed tribunal appointments personally although he would be assisted by others within his office. He confirmed that if appointed he would personally visit the premises at least quarterly.

58. He was asked about how he would deal with antisocial behaviour and set out the steps that he would take on behalf of the [NAME]. He confirmed that he had experience of dealing with the management of properties were there was disagreements between the [NAME]. He stated that he was aware that notwithstanding who he was appointed by his role was to be impartial.

59. He was aware that the leases did not add up to 100% of the service charges, however he felt that this could be dealt with by a sweep up clause within the lease. [NAME] [NAME] was asked about whether [NAME] had building surveyors. He told the Tribunal that he did not have in-house surveyors, however he had good links with local surveyors who he had engaged with in the past. 60. [NAME] [NAME] told the Tribunal that he understood that he was answerable to the Tribunal and not to any individual. He told the Tribunal that there were some buildings that he managed where the [NAME] had initially supported his appointment but who no longer do so, as they had not expected him to be impartial. Equally there were some [NAME] who did not support his appointment who are very supportive now. 61. [NAME] [NAME] accepted that he had not prepared a management plan, however he referred to the plan which had been put forward by [NAME] [NAME] which he considered to be generic, he stated that he would be happy to manage in accordance with the plan. He noted that the repairs which needed to be undertaken would be costly and that this might not accord with individual [NAME]' budgets however in his view it was likely to be more cost effective to complete the work than to put it off in stages.

62. He reiterated his belief that it was a personal appointment and that should he be the appointee he would manage the building. He was asked how long the appointment should be and he stated that in his view it should be at least 3 years.

63. The Tribunal was provided with the terms of appointment for both [NAME] [NAME] and [NAME] [NAME]. Prior to the hearing [NAME] [NAME] had not provided a copy of his indemnity insurance however, during the hearing, which was held over two days, a copy of his insurance certificate was provided.

64. The Tribunal was provided with a helpful comparison of the fees of both managers. [NAME] [NAME] management fees were £2,250.00 per annum whereas [NAME] [NAME] fees were £3600 per annum. [NAME] [NAME] fees-

11 were inclusive of his inspecting the [NAME], he had included 3 inspections of the [NAME] and also arranging and chairing residents' meetings. 65. [NAME] [NAME] charged an additional rate for attending meetings. He also had a sliding scale of hourly fees depending on the level of manager; his fee was £250 per hour for additional work. Surveyors' rates were £170.00. Senior [NAME] were charged at a rate of £175.oo and [NAME] were charged at £150 per hour. [NAME] [NAME] model was different in that he would undertake the work personally; any additional work would be charged at £175.00 per hour. 66. [NAME] [NAME] had surveyors who could be used for major works at the charging rate referred to above. His additional charges were 12%, plus 1.5% for Health and Safety, approximately £1,200 for a specification of work and any additional fee required for planning. [NAME] [NAME] model was to charge 4% for the general management of the work, and to engage an external [NAME] for oversight of the project and he assessed their cost to be normally 7% of the costs of the work. Both had set out charges for dealing with matters such as remortgage enquires and consents to sublet. [NAME] [NAME] included matters such as dealing with transfers of leases and enquires within this fee whereas [NAME] [NAME] made additional charges of £200.00 in relation to the lease transfer and £150 per enquiry. [NAME] [NAME] also did not charge a commission for dealing with Insurance.

Whether a manager should be appointed? 67. The Tribunal having heard from both parties proposed managers then went on to consider whether circumstances existed at the premises which made it just and convenient to appoint a manager.

68. The Tribunal at the outset of considering this issue, noted that there had been disagreements and a degree of animosity between the parties. It decided that it could not usefully explore all the disagreements which had occurred which had given rise to the dysfunction which led to the previous managers [COMPANY] ending their appointment.

69. It accepted that there was broad agreement between all four applicants that a manager should be appointed. However, notwithstanding this, it was for the Tribunal to satisfy itself that circumstances existed that made it just and convenient to appoint a manager, rather than for the convenience of the parties.

70. The Tribunal considered all the evidence in this case, which included a voluminous bundle and photographic evidence. It heard and accepted evidence from [NAME] [NAME] that the previous managing agent had proposed a budget for the service charges of 100% of the previous year's charges from £2000 per year to £4000. However, this had subsequently

12 been reduced with the intention of assisting the [NAME] of flat 3, to sell their flat.

71. The Tribunal heard that due to this dispute although insurance had been paid by the [NAME] on behalf of the [NAME], no service charges had been agreed or collected for the current service charge year. It accepted that the lease did not make proper provision for 100% collection of the service charges, and that the voluntary arrangement which had been in place had broken down. At the hearing the parties agreed a formula which would mean that the service charge apportionment would going forward by 100%. The agreed percentages were 17.4% for flats 1 & 2, 21.733% for flats 3-5.

72. The Tribunal heard that the lease covenant in respect of repairs was not being enforced due to disagreements concerning the potential cost of the work. There was also an issue on whether the service charge demand should be based on affordability, rather than the sums that were required to complete the outstanding work.

73. The Tribunal heard and accepted evidence that safety inspections had not been carried out. It noted that as a TMO, it was for the [NAME] as shareholders to appoint a company secretary and to manage the company. However, the broad and wide-ranging nature of the disputes between the [NAME] meant that currently there was no management in place.

74. The Tribunal noted that there were issues of alleged anti-social behaviour, however, as this involves the possible neurodiversity of one of the occupants it has chosen not to refer to the specific details within the decision.

75. The Tribunal noted that of the [NAME] at the hearing, there was broad agreement between them that it was necessary for the appointment of a manager in order for the repairs which needed to be undertaken to reach to the stage were a [NAME] was appointed, a schedule of works agreed and the required notices to be served.

76. The Tribunal was heartened by the fact that the parties had taken a pragmatic approach and agreed for the percentages to be paid to ensure that it was possible to collect 100% of the service charges. However, it accepted that the terms of clause 3(3) of the lease had been breached, on account of the Respondent’s failure to carry out the repairs and maintenance at the [NAME].

77. The Tribunal were provided with a Skeleton Argument on behalf of the [NAME]. It also heard closing submissions from both [NAME] [NAME] and [NAME] [NAME]. Which included case law upon which they relied. Although it has not referred to the matters raised verbatim it took account of the submissions in reaching its decision.

13 The Decision of the Tribunal Whether a manager should be appointed? 78. The Tribunal found that it was just and convenient to appoint a manager. The Tribunal make a finding that the [NAME] is in serious state of disrepair and in the circumstances that exist the [NAME] have not been able to run the tenant’s management organisation or put in place a manager with the authority to serve demands and put in place the action needed to carry out the repairs.

79. Although part of the [NAME] referred to the fact that an unreasonable demand had been made for service charges, the Tribunal had no way of knowing if this was correct; as there was no proper budget for the Tribunal to consider, and given this it made no finding that this was the case.

80. The Tribunal was concerned that the service charges were unreasonably being influenced by the [NAME]. However, this was not a ground upon which a decision could be made by the Tribunal it speaks to the dysfunction which exists at the premises.

81. The Tribunal is nevertheless satisfied that grounds exist which make it just and convenient for a manager to be appointed. It took account of the fact that the obligations of the lease are not being fulfilled by the [NAME], in respect of maintaining the [NAME] in accordance with the lease, exploring and if necessary, dealing with anti-social behaviour, in accordance with the lease and collecting a service charge to ensure that there are sufficient funds to meet the obligations under the lease.

82. The Tribunal although not engaging with the dysfunctional nature of the relationship between the [NAME] and the causes of this, are aware that this presents a barrier for managing the [NAME] going forward.

83. It is for this reason that the Tribunal having determined that the Respondent is in breach of the obligations owed to the tenant under his tenancy and relating to the management of the premises in question and that it is just and convenient to make the order in all the circumstances of the case, has determined to appoint a manager in this case.

Who should the Tribunal appoint to manage the [NAME]? 84. The Tribunal having heard from both [NAME] [NAME] and [NAME] [NAME] were satisfied that both proposed managers were experienced and were aware of their obligations to the Tribunal, as Tribunal appointed managers. Both had recent appointments and had demonstrated that they had the necessary skills and experience to manage such properties.

85. The Tribunal had carried out a comparison of the fees, and although [NAME] [NAME] initial rate was higher. The Tribunal noted that he had included many of the aspects of his management within the initial fee. Given this,

14 the Tribunal considered that little, if anything, turned on the fees put forward by the managers.

86. The Tribunal therefore considered that the critical issue in this case is the management model that both managers put forward and which one the Tribunal considered right for the issues that existed at the [NAME].

87. The panel noted that [NAME] [NAME] had established a very successful model of management using delegation and remote [NAME], although he understood, that he remained personally responsible for the [NAME].

88. The Tribunal accepted that this model had been successful in the past, and that [NAME] [NAME] had demonstrated this by his success in being appointed by the Tribunal over 15 properties which had increased at the date of the hearing. [NAME] [NAME] had also set out that he had 6 Tribunal appointments and had at the date of the hearing also had further appointments.

89. Given this, the Tribunal’s decision is based entirely on its professional opinion of what the Tribunal in its view considered is needed for this [NAME], rather than a criticism of any management model put forward.

90. It was of the view, that where management was undertaken remotely, it would work best where [NAME] did not have any misgivings about the model of remote delivery, which was not the case here, both the [NAME] had difficulties with this model.

91. The Tribunal was also of the view that the [NAME] needed the direct intervention of the [NAME] manager. Given this it found that the model put forward by [NAME] [NAME] would better fit the problems which exist at this [NAME]. He would be able to meet on site with both sets of [NAME] and establish a more direct means of communication which would assist in quickly resolving issues as they arose.

92. The Tribunal also considered that his model of personally inspecting the [NAME] was the correct approach for this [NAME] with its issues and in its current condition.

93.

For these reasons the Tribunal has decided to appoint [NAME] [NAME] for the period of 3 years.

94. It was grateful for the work that [NAME] [NAME] put in and his willingness to take on the appointment, however for the reasons stated above the Tribunal has decided to appoint [NAME] for a period of 3 years.

Name: Judge Daley Date: 9.12.2024

Rights of appeal

15 By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] 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. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the [NAME] and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

16 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 lessee of the [NAME], the Respondent or the Tribunal.

2. That no later than four weeks after the date of this order the parties to this [NAME] shall provide all necessary information to and arrange with the Manager an orderly transfer of responsibilities. No later than this date, the Applicants and the Respondent shall transfer to the Manager all the accounts, books, records and funds (including, without limitation, any service charge reserve fund).

3. The rights and liabilities of the Respondent arising under any contracts of insurance, and/or any contract for the provision of any services to the [NAME] shall upon 10 December 2024 become rights and liabilities of the Manager.

4. The Manager shall account forthwith to the Respondent for the payment of ground rent received by him and shall apply the remaining amounts received by him (other than those representing his fees) in the performance of the Respondent’s covenants contained in the said leases.

5. The Manager shall be entitled to remuneration (which for the avoidance of doubt shall be recoverable as part of the service charges of leases of the [NAME]) in accordance with the Schedule of Functions and Services attached.

6. By no later than [one year] from the date of the decision, the Manager shall prepare and submit a brief written report for the Tribunal on the progress of the [NAME] up to that date, providing a copy to the [NAME] of the [NAME] and the Respondent at the same time.

7. Within 28 days of the conclusion of the management order, the Manager shall prepare and submit a brief written report for the Tribunal, on the progress and outcome of the [NAME] up to that date, to include final closing accounts. The Manager shall also serve copies of the report and accounts on the lessor and [NAME], who may raise queries on them within 14 days. The Manager shall answer such queries within a further 14 days. Thereafter, the Manager shall reimburse any unexpended monies to the paying parties or, if it be the case, to any new tribunal-appointed manager, or, in the case of dispute, as decided by the Tribunal upon [NAME] by any interested party.

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

17 SCHEDULE OF FUNCTIONS AND SERVICES

Insurance (i) Maintain appropriate building insurance for the [NAME]. (ii) Ensure that the Manager’s interest is noted on the insurance policy.

Service charge (i) Prepare an annual service charge budget, administer the service charge and prepare and distribute appropriate service charge accounts to the [NAME]. (ii) [Set] Demand and collect [ground rents,] service charges (including contributions to a sinking fund), insurance premiums and any other payment due from the [NAME]. (iii) [Set] Demand and collect his own service charge payable by the Respondent (as if he were a lessee), in respect of any un-leased premises in the [NAME] which are retained by the Respondent. (iv) Instruct solicitors to recover unpaid rents and service charges and any other monies due to the Respondent. (v) Place, supervise and administer contracts and check demands for payment of goods, services and equipment supplied for the benefit of the [NAME] with the service charge budget.

Accounts (i) Prepare and submit to the Respondent and [NAME] an annual statement of account detailing all monies received and expended. The accounts to be certified by an external auditor, if required by the Manager. (ii) Maintain efficient records and books of account which are open for inspection by the lessor and [NAME]. Upon request, produce for inspection, receipts or other evidence of expenditure. (iii) 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 ground rent, service charge contributions and all other monies arising under the leases shall be paid. (iv) All monies collected will be accounted for in accordance with the accounts regulations as issued by the Royal Institution for Chartered Surveyors.

Maintenance (i) 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 [NAME].

18 (ii) The consideration of works to be carried out to the [NAME] in the interest of good estate management and [NAME] the appropriate recommendations to the Respondent and the [NAME]. (iii) 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 [NAME].

Fees

(i) Fees for the abovementioned management services will be a basic fee of £3600 per annum. Those services to include the services set out in the Service Charge Residential Management Code published by the RICS. (ii) Major works carried out to the [NAME] (where it is necessary to prepare a specification of works, obtain competitive tenders, serve relevant notices on [NAME] and supervising the works) will be subject to a charge of [11]% of the cost This in respect of the professional fees of an architect, [NAME], or other appropriate person in the administration of a contract for such works. (iii) An additional charge for dealing with solicitors’ enquiries on transfer will be made on a time related basis by the outgoing lessee. (iv) VAT to be payable on all the fees quoted above, where appropriate, at the rate prevailing on the date of invoicing. (v) The preparation of insurance valuations and the undertaking of other tasks which fall outside those duties described above are to be charged for a time basis.

Complaints procedure (i) The Manager shall operate a complaints procedure in accordance with or substantially similar to the requirements of the Royal Institution of Chartered Surveyors.