In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
The consultation document was published at the end of July and is available here. It sets out the Government’s intention to impose duties on landlords (by way of regulations) to provide the secretary of a tenants’ association with information about qualifying tenants (primarily their name and contact details). This follows the introduction of Section 29A of the Landlord and Tenant Act 1985 (the “Act”) (as inserted by Section 130 of the Housing and Planning Act 2016).
What is a tenants’ association?
A tenants’ association is a group of tenants (including and usually leaseholders) who hold similar occupancy agreements from the same landlord that include provisions for the payment of variable service charges. Collectively an association represents the view of its members.
A tenants’ association is most effective when it is a “recognised tenants’ association” in accordance with Section 29 of the Act. Broadly speaking, this requires an association of tenants who, under the terms of their lease, need to contribute to the same costs through a service charge (“qualifying tenants”), with or without other tenants, which is formally recognised either by a landlord-issued notice or a certificate of the First-tier Tribunal (Property Chamber) (“Tribunal”).
Formally “recognised” tenants’ associations have rights alongside tenants regarding:
- Information on service-charge costs;
- Information on insurance;
- Consultation under Section 20 of the Act; and
- Consultation on the appointment of a managing agent.
These rights are additional to some rights not afforded to individual tenants, such as the right to appoint a surveyor to advise on service charges.
Typically, Tenants’ associations in a block of flats need at least 60% of “qualifying tenants” to join for landlord or Tribunal recognition.
The proposed regulations seek to improve the prospects for formal recognition of an association by making it easier for secretaries of tenants’ associations to obtain contact details for other “qualifying tenants”. Under the proposals, landlords will need to ask all such “qualifying tenants” for their consent to pass their contact details onto a tenants’ association when an association’s secretary is seeking formal recognition under Section 29 of the Act.
The consultation includes a prescribed form for landlords for this purpose. Landlords will need to ensure that any tenant consent is obtained in a way that complies with the Data Protection Act 1998 and the General Data Protection Regulation, which comes into force in May 2018 – as drafted, we do not think the form is sufficient for this purpose.
Landlords will need to make it clear to associations’ seeking tenant contact information must only use it for the specific purpose of the association's secretary carry out their role and not for any other purpose.
Landlords will be required to provide the association’s secretary with the contact information of all consenting “qualifying tenants” and the number of “qualifying tenants” within 30 working days of the initial request.
We anticipate that the regulations will include a mechanism allowing landlords to charge “other parties” its costs of complying with the regulations. The consultation invites responses on how to circulate the costs and who should be responsible for paying them, in addition to responses on the processes and timings of the proposed regulations.
Responding to the consultation
The Government has invited views of all parties with an interest in residential housing to consider the consultation document and then complete an online survey or send written responses by post or email. The consultation period closes on 19 September 2017.
In the wake of Grenfell Tower, it is clear that engagement with residents and resident groups is a key priority for the Government. It, therefore, seems inevitable that residents will more frequently seek to form formally recognised tenants’ associations, placing additional administrative burdens on landlords.
If you need assistance with “recognising” a tenants’ association or your obligations concerning recognised tenants’ associations generally, please contact Penny Bournes. To find out about the work that we do in the Housing sector, please visit our website.
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