Western Mail Property Doctor Column #18
By admin
Issued on behalf of Emyr Pierce Solicitors
I live in one of six flats in a block. I have just established that the Management Company has been dissolved. What can I do?
The responsibility for the maintenance and repair of a block of flats is often that of a management company set up by the freeholder on the sale of the last flat. While the freehold interest in the building remains with the landlord or freeholder, a limited company is often set up to organise and manage the maintenance and repair of the building. In each lease of the building there will be responsibility on the part of both landlord and tenant. The landlord will be responsible for the maintenance and repair of the building and the day-to-day handling of such obligations will be undertaken by the management company.
In some cases, if the management company is a limited company, the officers of the company forget to lodge the appropriate annual accounts at Companies House and eventually the company can be dissolved for lack of activity.
In this case, the responsibility for the maintenance and repair of the building will revert to the landlord who should, in a properly drafted lease, be obliged to take over the responsibilities of repairing, maintaining and insuring the building if the management company dissolves.
A problem will arise if the landlord is unwilling to undertake these obligations or is an ‘absentee landlord’ – in other words does not live locally and has no direct knowledge of the building. In these circumstances the tenants would be strongly advised to get together and form a Residents Association and take the responsibility of arranging insurance for the building and keeping it in a good state of repair. Ultimately the cost of maintaining, repairing and insuring it will return to the tenants anyway, either by contribution to a service charge imposed by a management company or the landlord direct or, if neither management company nor landlord carries out their obligations.
Once an arrangement is in place and the tenants can be satisfied that the building is insured and that they, effectively, have control of the position, remedies are available to the Tenants against the Landlord for breach of the Landlord’s obligations or covenants in the Lease.
I have just purchased a house and it has come to my attention that the local Utility Company has the right to run a large cable through my land. How can this happen?
Some properties are subject to ‘Wayleave Agreements’ in favour of various utility companies. These agreements will grant the utility company the right to run a pipe or cable across the private property of the occupier in return for a nominal amount of rent. These agreements will often grant the utility company the right to run the pipe or cable over the land indefinitely, while others may be capable of being terminated on twelve months notice given by either party.
The existence of these documents is of course of vital importance to any prospective purchaser. The onus is very much on the seller to let the purchaser know of anything that affects the subject property. Difficulties can arise when the existence of these agreements are either unknown to, or have been overlooked by, the seller during the sale process. The purchaser will of course purchase the property subject to the terms of this Agreement whether or not he or she knew of their existence.
If the agreement is capable of being terminated then at least the occupier can give notice to the utility company should the existence of the pipe or cable interfere with the use and enjoyment of the property. If the existing agreement is for an indefinite period then clearly the buyer can be faced with some serious problems. The difficulty for a buyer is that there is no way of establishing whether or not such agreements exist. The buyer can only rely on their existence being disclosed by the seller, if of course the seller is aware of such agreements.
This situation could arise in circumstances when the seller is selling as personal representative of the estate of the deceased former owner and in such circumstances the seller will not necessarily be aware of the existence of the agreement. Unless the utility company has registered either a Notice at the Land Registry or a Land Charge at the Land Charges Registry then the existence of such an agreement would not easily be known to the buyer.
