Running a Home
Who Decides What In A Block Of Flats
Decisions in a shared building are split between a freeholder, a management company and the flat owners, and knowing which body holds which power explains most disputes.
Residents of a block often cannot say who authorised a piece of work or who could have stopped it. The answer lies in a structure set out in the leases.
Three roles, sometimes three parties
A freeholder owns the building and the land. A management company or agent runs it day to day. The leaseholders occupy the flats and pay for the running.
Those roles can be held by three separate parties, or collapsed into fewer. Where the leaseholders collectively own the freehold, they occupy every role at once.
Which arrangement applies is stated in the lease and the title documents, and it determines who a resident should be addressing when something needs fixing.
The lease is the constitution
The lease sets out what the landlord must maintain, what the leaseholder must maintain, how costs are apportioned and what consent is needed for alterations.
Everything else follows from it. A management company cannot spend on something the lease does not permit, and cannot recover a cost the lease does not allocate to leaseholders.
Where a lease is silent or ambiguous, disputes result, and the resolution route depends on jurisdiction and on the tribunal or court system that handles such matters locally.
Agents act, they do not decide
A managing agent is appointed to carry out instructions: collecting charges, arranging maintenance, keeping accounts and dealing with contractors.
The authority behind those actions comes from the freeholder or the company that appointed them. An agent making decisions no one authorised is exceeding its role.
That is why complaints directed at an agent sometimes go nowhere. If the underlying decision was made by a company of leaseholders, the agent is reporting it, not making it.
Where residents hold real power
Voting rights, where a resident-owned company exists, are exercised at meetings and through the appointment of directors. Those directors then instruct the agent.
Consultation requirements for large works or long contracts exist in many jurisdictions, giving leaseholders a formal opportunity to comment before money is committed.
The scope, thresholds and consequences of those requirements are set locally and revised over time, so residents should confirm the position that applies to their building.
Why the structure surfaces at sale
A buyer's advisers will ask for accounts, the reserve fund position, planned major works and any disputes, and the answers come from whoever holds the records.
A block with an absent freeholder, no agent and no accounts is difficult to sell, because a lender cannot see that the building will be maintained.
The administration that residents resent when nothing is going wrong is the same administration that makes their flats transactable when they want to leave.
Questions readers ask
How often should gutters be cleared?
At least annually after leaf fall, and more often where there are overhanging trees. It is the cheapest maintenance task with the largest downstream consequences.
Is an annual boiler service necessary for owner-occupiers?
It is a legal duty for landlords in many jurisdictions and generally optional for owners. Manufacturer warranties frequently require it, so check before skipping one.
