FAQ

Leasehold means that the property owner has obtained a lease from the freeholder/landlord to use the property for a specified number of years. The leases are usually long term, often 90-120 years but can go as high as 999 years.

Freehold means that the property owner is the freeholder or landlord, owning the property and the land it stands on in perpetuity. The type of freehold ownership depends on the transfer held – part or whole.

A lease is a contractual agreement between the property owner, freeholder and, in some cases, a management company, outlining the obligations of all relevant parties.

A Transfer of Part (TP1) is a contractual agreement between the property owner, the ‘transferor’ (the original owner of the land) and the management company. It outlines the obligations of all relevant parties. For example, a TP1 would be the legal document used for a freehold house on an estate; the property owner would own the house and the specified land around it while the original developer or landowner would own all other land not covered by a TP1.

A Transfer of Whole (TR1) is much like the above but covers the ownership of all land included within the property. This would be held by the developer, freeholder or management company, depending on who the current owner is.

The management agreement is the contract held between us as the managing agent and the instructing client – be that the landlord, freeholder, resident management company or developer. It stipulates the services we will perform for the stated management fee, as well as what services will be charged separately. The agreement will also include details agreed in advance with the instructing client. This includes the number of visits we will make each year, the number of meetings we will hold and the fee we are charging for providing the service. This fee is calculated on a per unit basis plus VAT. Our standard agreement includes sections for the option of paid for additional services, such as company secretarial (provided B-hive Company Secretarial Services) and a variety of site staff solutions (provided by B-hive Site Staff Solutions). We have a separate agreement in place for collecting ground rent or insurance premiums on behalf of the landlord. Our term is one year less a day, with a three-month notice period. Each year we will issue an updated agreement to the instructing client.

All estates and properties with any type of communal areas will dictate service charges are to be collected, to cover the cost of maintenance and other requirements related to the management of the property. Your legal documentation, such as the lease or transfer you signed when you purchased the property will outline how and when these charges are billed and paid. Please refer to it for clarification.

A reserve fund is like a savings account for the management company. If the lease allows for a reserve fund to be collected, and amount will be outlined in the budget each year. This money is held until an item of unbudgeted maintenance is required or when large works required under the terms of the lease are due to be carried out. The money in the reserve fund will be used to cover these costs, or towards the cost's dependant on their value.

Ground rent is a charge due to the owner of the land or building, which is paid by leaseholders. Any ground rent provisions will be detailed in your lease and are typically payable annually or twice a year. Ground rent is payable for the duration of your lease, and it will either be fixed or escalating. We highly recommend you consult with your solicitor if the ground rent is set to escalate over the term of the lease.

In order to ensure the property is maintained and serviced, the charges outlined in your lease or freehold document must be paid as agreed. As an agent, we have no financial or legal interest in the property, and we cannot pay for services ourselves on behalf of residents. Some expenses, such as insurance, must be paid promptly. Your building must have the appropriate insurance in place to protect you in the case of an emergency or in the event of a claim being made. Your legal documentation will stipulate that these charges are required from you, the leaseholder or freeholder of your property. By signing the documents, you are agreeing to pay as and when required.

Your payment options will be shown on the bill (also referred to as a ‘demand’) or the Application for Payment that you will receive when the charges are due. In some areas residents can pay by Direct Debits and Standing Orders, if both the legal documentation and client allow. A small administrative charge will be applied to these methods of payment. You can also pay via electronic transfer or cheque. Due to the legislative changes regarding charges for using credit and debit cards, we cannot accept payment by card. We are also unable to accept cash or post-dated cheques.

We prepare an annual budget for each development and submit it to the client for approval at a set period during the year. In the case of existing properties, we will review the previous expenditure, the plans for the year ahead and any other necessary factors in order to set a budget to cover the anticipated expenditure. With new build sites, we will work with the developer to create a budget that encompasses the anticipated expenditure for the year(s) ahead. Once the site is complete and handed over to the residents, the process applied to existing properties would come into force. We will liaise with the client to provide a sensible and realistic budget.

The strict codes of practice that we follow ensure that we comply with all relevant legislation and industry requirements and that we hold service charge funds in separate secure trust accounts. In accordance with the Landlord and Tenant Act (CLRA 2002) and trust legislation, we open separate bank accounts for service charge monies, reserve fund monies and ground rent monies, where applicable. All bank accounts are interest-bearing with interest credited to the service charge fund and accounted for in the annual service charge accounts, which are verified independently. All accounts conform to FCA regulations, The Institute of Chartered Accountants in England and Wales (ICAEW) and The Property Institute (TPI) requirements.

This depends on the legal documentation for each development. Some documents stipulate that any surpluses are credited back to the residents, some outline that the money is to be retained, and others will make no mention of how these funds are handled. We will follow the instructions laid out in the documentation, as well as the wishes of the instructing client. Deficits are rare but possible, even with the best financial planning. If the deficit means core services cannot be maintained, a call for further funds may be issued by ourselves on behalf of the client. We’ll use the legal documentation, the relevant laws and regulations, and the views of the client and residents to find a good solution. Where deficits are caused by a lack of funds due to overdue payments, we will attempt to recover them as soon as possible. If we need to go down the debt recovery route, we will do so at the request of our client. In rare situations, and where there are not enough funds in the reserve fund (if one is in place), a call for further funds may be issued in addition to the usual service charge. This will only be done on the grounds of health and safety or security, to protect residents like you.

On rare occasions, a major incident or emergency may occur at any property, including those under our management. Accidents and incidents can occur at any time of day, and under any circumstance, so it is important to remain as calm as possible. Staying calm will help you make wise decisions to keep you, your loved ones and your neighbours safe from harm.

Always make sure that you, your family and any visitors are aware of the evacuation procedure and the location of all available emergency exits. It is important to follow all guidance provided regarding the communal areas and fire risks, such as keeping fire doors shut, keeping the hallways clear of personal items, etc.

If there is an imminent threat to life, or of serious injury, either to the residents or the general public, contact the emergency services immediately using 999 or 112. If the situation is non-life threatening, contact your property manager between 9am and 5.30pm or the Out-of-Hours service at all other times. The Out-of-Hours number is: 0345 601 2422. Please note that properties not subscribed to the service may incur a small administrative charge for using the service.

Where an evacuation is necessary, please do so in a calm and orderly manner as soon as you can. Follow all instructions provided and keep an eye out for any updates coming from us or the emergency services.

We will do all we can to communicate updates and information to residents when possible. Please ensure you have provided us with all necessary contact information so we can update you as quickly as possible. Refer to our data protection policy on our website if you have concerns about the use of your data.

Major incidents and emergencies can be stressful, especially if information is not forthcoming. Our priority is your safety and we will provide updates as soon as practically possible.

Landlords are obliged by law to consult Leaseholders before carrying out any major works to their property above a certain value. This process is called a Section 20 Consultation.

Section 20 is part of the Landlord and Tenant Act 1985 (as amended) and requires Landlords to consult with Leaseholders when they intend to carry out qualifying works where any one Leaseholder’s contribution to the cost of those works is expected to be £250 or more (inclusive of VAT).

The Section 20 Consultation is a legal requirement and has three stages: The Notice of Intention. This is the pre-tender stage and sets out what works are proposed and why they need to be done. Leaseholders can submit comments and nominate contractors within 30 days of this Notice being issued. The Notice of Estimates. This is the tender stage and, after the initial 30 days above, the Notice of Estimates is issued to all Leaseholders. This Notice details the estimated cost of the works. Leaseholders can submit comments and inspect the Estimates within 30 days of this Notice being issued. The Notice of Reasons. This Notice is only issued if the cheapest estimate or a contractor nominated by a Leaseholder is not awarded the contract. The Notice explains the reasons why the Landlord chose a particular option.

Qualifying works are ‘works on a building or any other premises.

Depending on the structure of your Lease, the Landlord will be either the Freeholder, the Resident Management Company, Right to Manage Company or Head Lessee. HML issue the Section 20 Notices on behalf of your Landlord and their details are shown on each Section 20 Notice and the covering letter. The Section 20 consultation is required by law irrespective of who the Landlord is and regardless of whether or not all the Leaseholders unanimously agree the work should be undertaken.

This is not a calculation it is the amount set by the legislation under the Landlord and Tenant Act 1985 (as amended) and it is not the amount that Leaseholders will have to contribute. If it is anticipated that any one Leaseholder will need to contribute at least £250 towards the cost of works then a Section 20 consultation must be undertaken.

At the initial stage (Notice of Intention), we do not know precisely what the work will cost. The specification of works will be prepared and then tendered under a closed bidding process. Any contractors nominated by Leaseholders during the Notice of Intention consultation period will be included in the tendering process if deemed suitable. The requirements for nominated contractors will be shown on the covering letter. The estimated costs of the proposed work will be shared with all Leaseholders when the Notice of Estimates is issued. All tenders will be shown on the Notice for comparison.

This will be confirmed once the full costs of the contract have been determined. In some cases, there may be a sufficient reserve/sinking fund which can cover costs of the contract, if not, an invoice will be issued to all Leaseholders for their portion of the cost on expiry of the 30-day consultation period following service of the Notice of Estimates. The covering letter sent with the Notice of Intention will show how the proposed works are to be funded. All funds must be collected before the works can commence. Depending on the type of works, it may be cost effective to have other works undertaken at the same time, particularly if scaffold is required.

The portion each Leaseholder pays will be determined by their Lease.

The proposed works are shown on the Notice of Intention. A detailed specification of works required will be prepared and you can request a copy along with the tender documentation within the second stage of the consultation process.

No. All contractors need to quote against the same specification of works under the closed bid system. This ensures the Section 20 legislation is adhered to and estimated costs are comparable. Leaseholders can nominate a preferred contractor during the Notice of Intention consultation period. Any nominations after that period cannot be accepted.

Once the consultation process has been completed, the start date will be dependent on the funds being available / collected and the availability of the chosen contractor. An estimated start date will be shown on the covering letter. Once the actual start date has been agreed, all Leaseholders will be sent a Notice of Commencement to confirm that date along with all contact details for HML and the contractor.

Where B-hive Property Solutions are engaged as Project Manager for the works, an experienced inspector / surveyor will write the specification, complete the tender analysis and manage the project to completion.

HML Property Management act on behalf of our clients to make sure the communal parts of their developments and properties are well looked after. We provide clients with advice and recommendations and act on their instructions. We ensure that our clients are able to fulfil their obligations which are set out in the lease and/or transfer documents for their properties. Services such as gardening, cleaning and general repairs are arranged by us. We also arrange the relevant insurances for buildings, plant equipment and the wider estate or property. All this is done in conjunction with the clients’ instructions. For many properties we also look after matters relating to the management company, including arranging meetings (like the AGM), filing the annual accounts and keeping the company records up-to-date at Companies House. It is important to remember that we only manage communal areas such as lobbies and landings inside, grounds and parking outside, so any issues within the flat or house are the responsibility of the property owner. To see where these boundaries are, please refer to your legal documentation. While we try to assist where we can, we don’t have the legal authority to maintain areas which have been demised to the property owner. For further information on the services that are in place at your property, please speak to your Property Manager.

This is a digital service for both owners and residents. HML Connect is designed to significantly enhance our service delivery by giving our customers better access to information, updates on-demand, opening new and effective lines of communication, and offering greater transparency with what we do for our clients and their developments. HML Connect instantly opens seamless communication between Property Managers, owners, leaseholders, tenants, and contractors alike, with ease and speed.

Residents pay service charges as part of their lease or transfer document. These payments fund the work we do on behalf of our clients. Often this is billed in advance, as per terms of the Lease, to ensure there is enough money to provide the services required. Unpaid or overdue payments can have an impact on the upkeep of the communal areas at your property. To find out more about this topic, refer to the ‘Service Charges’ section of this handbook.

When we take over the management of a property, you will receive written communication containing contact information for your local property manager, who you can contact during normal working hours. We will also provide details of HML Connect, your online portal where you can easily review documentation and information about your development or raise a request to your property management team. Your Property Manager will visit the site periodically to inspect the grounds and buildings. As part of our role as Managing Agent, the Property Manager will ensure that the property’s condition is at a high standard and will make note of any issues that need addressing.

HML are members of The Property Institute (TPI) and The Property Ombudsman (TPO). Our accounting procedures follow the relevant laws and statutes, and we are regulated by the Financial Conduct Authority. We are also held accountable by our clients, and of course, residents like you. Feedback is welcomed, so please get in touch if there are areas you feel we could improve.

Insurance for the common parts of your development – this is usually compulsory as per the lease.

Areas within your development which are shared by two or more properties – such as pathways, gardens, internal stairways, lift.

Registrars for all UK limited companies. They incorporate/dissolve companies, examine and store company information and make all this available to the public.

Usually found in the Memorandum and Articles of Association and the lease, these form the basis of the way in which the development must be run and include ‘estate’ regulations and restrictive covenants

The chief administrative officer of the company responsible for maintaining company records

An officer of the Company, registered with Companies House, responsible for ensuring that the communal areas of the development are managed properly and in accordance with the lease and current legislation

Insurance designed especially for directors and officers to protect themselves against a claim in the event they are perceived to have failed in any of their duties.

Under the Leasehold Reform Housing and Urban Development Act 1993 gives leaseholders the right, upon qualification, to collectively purchase the freehold of their development. This process is called Enfranchisement.

Having a fire risk assessment in place is, in most cases, a legal requirement and involves managing the risk of fire in the communal areas. The purpose of the fire risk assessment is to identify possible fire hazards; reduce the risk from these hazards to an acceptable level and identify what action needs to be taken to ensure safety if a fire does break out.

Owner of the land that the development is built on and usually the legal entity ultimately responsible for the management of the development. Freeholders can be investors, house builders or be the Residents Management Company of the development (leaseholder owned).

The First-tier Tribunal (FTT) is a tribunal system in the UK which handle applications, appeals and references relating to disputes over property and land.

Ground rent is a payment made by the leaseholder to the landlord under the terms of the lease. A lease is a tenancy and so it is subject to the payment of ground rent. It is an income for the landlord rather than payment for the provision of services

The basis of British Health & Safety law is the Health and Safety at Work Act 1974, although there are around 10 additional Acts of Parliament which relate to the communal areas of residential developments. The Health & Safety at Work Act sets out the general duties which employers have towards employees and members of the public and employees have to themselves and to each other. The communal areas are deemed to be ‘places of work’ and these various pieces of legislation are in place to ensure the safety of residents, visitors and contractors.

Provides security of tenure for occupying tenants under certain leases of residential property.

The landlord’s obligations to lessees as detailed in the lease. These can include obtaining and arranging insurance, upkeep of the structure of the building and the provision of services such as the lighting in common areas and ground maintenance.

The right provided by the 1993 Leasehold Reform Act (as amended) for the grant of a new lease for a term of 90 years, plus the present unexpired term, all at a peppercorn rent, i.e. rent free. This process is not automatic and lessees must meet certain qualifying criteria.

Flat owner within a block of flats/development.

These are typical works which will result in more than £250 being payable by each flat and which occur on a cyclical basis, such as internal and external redecoration, replacement of the roof or lift. Section 20 of the Landlord & Tenant Act will usually apply (see below).

This is a document stipulating the managing agent’s terms of business and conditions of appointments.

Hired by freeholders or Resident Management Companies to manage the day to day running and cyclical maintenance of their buildings on their behalf.

Legal documents required by law that set out details and rules for internal regulation and management.

Funds collected over a period of time to be used for a specific purpose to avoid a very large bill in one service charge year, typically used for major works.

A limited company, whose members or shareholders are leaseholders, which is defined within the lease as being responsible for the management of the communal parts of the development.

The Royal Institute of Chartered Surveyors is the professional body for qualifications and standards in land, property and construction.

Clients who entrust money to firms regulated by RICS are protected in the unlikely event that the money is mishandled.

The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to force the transfer of the freeholder’s management duties to a special company – set up by them. The RTM process allows leaseholders to take control of the management of their development.

A summary of lessees’ rights and obligations which must accompany a demand for service charge payments.

Section 20 is a consultation process under the Landlord & Tenant Act required to carry out major works costing in excess of £250 for any one unit.

A charge levied by the freeholder or Resident Management Company in accordance with the lease to recover costs incurred running the communal parts of a development, insurance of the building and general maintenance and repairs.

An indication of the annual costs associated with running the development in accordance with the terms of the lease, e.g. cleaning, gardening, electricity for communal areas, etc.

A shareholder of the RMC that owns the freehold. They are entitled to have a say at company meetings and take part in decision making.

"The Property Institute is a professional body who represent and upholds the 'gold standard' for professional practitioners and firms within the property management industry.