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Walking A Tightrope

Friday March 1, 2019

As a residential block management specialist, I am often put in mind of my famous great grand uncle Rea il Magnifico. My uncle was a tightrope walker in northern Italy during the 1920’s. He wowed audiences with his amazing dexterity. As a block manager I feel I am preserving a family tradition. Walking a tightrope.

In block management, the difference between the spirit of the law and the interpretation of the law is a chasm. The spirit of the law says there should be good relations between freeholder and leaseholder. That each party should have redress to law in the event they cannot agree.

In an ideal world this works well. One estate we manage has 45 owners, at least half of whom turn up to the AGM to hold us to account. We meet our obligations as block managers, they meet their obligations as leaseholders. If there is an issue, a phone call can usually resolve things.

That should be the way it works. Talk, identify issues, resolve them. In law this is supposed to be a simple process. If 50% of the leaseholders require a change of block managers, they can usually make it happen. Unless the freeholder is a non-dom billionaire or a pension fund. Then it tends to be “Cry havoc and let slip the dogs of law”.

In London Docklands a freeholder vs leaseholder case is currently making headlines. The leaseholders are fed up, being hit with massive maintenance and insurance bills from the freeholder so they have gone to law. The law that purports to protect their interests. The freeholder has instructed his QCs to fight. Faced with a six-figure legal bill, plus the possibility of costs, many leaseholders have held their hand up and said “Enough”. Which is exactly what the freeholder wanted.

The legislation regarding block management is complex but the underlying principle is simple. ‘Enable the leaseholder and protect the freeholder’. The leaseholder has bought their property. Signed an agreement and should have some say as to how their block is managed, and fees for that service. The freeholder owns the block freehold and should have a right to protect their investment.

Various bits of legislation like the Right to Manage or the Appointment of a Manager look fine on paper. But a team of highly paid lawyers can drive a cart and horses through the process. Leaving leaseholders cowed and feeling powerless and unscrupulous freeholders free to play the bully. This is bad and wrong.

In my experience, sitting down with leaseholders and the freeholder over a nice cup of Lavazza coffee can resolve most issues. Both want a well-maintained block, reasonable fees and an easy life. In the unlikely event my approach does not work as I walk this tightrope, I reflect upon the wise words of my esteemed ancestor, Rea il Magnifico who said “Chi vuole vivere per sempre?”

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