Background
Diamond Managing Agents (DMA) was instructed to provide management services at Lavender Court, Sutton in August 2011. The property containing 35 retirement flats was constructed in 2003 by McCarthy & Stone. Facilities lift, lounge, laundry, guest facilities, front and rear garden and car park. Services: Non-resident management staff, lift, CCTV and community alarm service.
The initial managing agent Peverel, was appointed by McCarthy & Stone. Peverel changed their name to First Port later on due to financial scandals from Peverel in intent to clear their name. Under this arrangement the managing agent had complete control of the building with the result that the directors of the Residents’ Association and the leaseholders, were entirely excluded from the decision making process regarding the management of their development.
DMA assisted with the setting up of a Right-to-Manage company to take over the management of the building from Peverel because they were extremely unhappy with Peverel management and the high level of service charges that increased each year substantially.
They were unable to decide on any issues of the management of their development so they decided to set a Right-To-Manage (RTM) to take over the management. They raised 95% support (some properties were emptied and Peverel didn’t want to supply owner’s/relatives details) and DMA prepared all the documents and notices to serve to the landlord. The entire process was a success and the landlord’s solicitor confirmed that the RTM had the legal right to take over the management.
DMA tendered all the service contracts as existing contractors were overpriced. This reduced substantially the yearly expenditure of the building (£500 per flat in the first year) and increased the quality of the services. Most of the new contractors are locally based.
The maintenance of the property is up to high standard.
Management Issues at Handover
- Administration of the service charge account was inadequate. Costs of their service providers were high.
- Gutters were blocked with leaves and overflowing.
- Trees were overgrown and needed tree surgery.
- The previous managing agent had failed to report to the builder any snagging items under the first year of guarantee. This meant that the leaseholders had to cover the cost to fix them from the service charge.
- The reserve fund was set up too high.
- The contractors appointed to provide the gardening and the cleaning services were based in Croydon and charged for their time to travel to Sutton and back meaning that they were expensive and the service didn’t represent good value for money.
Our Immediate Actions to Improve Management
- The common parts were reviewed and the services required were put out to tender to local contractors. The new contracts resulted in savings to the leaseholders.
- The Board of Directors were placed in control; approving the new panel of contractors and the basis of the management of the block. A new budget for the financial year was prepared.
- A building insurance valuation was made to ensure that the block was at the correct reinstatement value.
- Project addressing the required internal decoration was implemented and the cost was nearly half to what Peverel proposed contractor quoted.
- Health & Safety Inspection and Fire Risk Assessment were carried out to make sure the block was compliant with current safety regulations.