Our ‘Covenants Review Service’ commenced in 2012 at the request of one of our clients. Since then the reputation of the service has grown and we now regularly provide numerous clients, and particularly professional managing agents (who frequently refer to our Covenants Review reports as "the Bible"), with the service on all developments managed by an agent. The review that we provide forms the agent’s basis of management of many of the day to day issues for that specific development.
The service is a review of the contractual agreements (leases or transfers) made in relation to residential property or the estate to be managed. It highlights to the landlord and/or management company/RTM and their agent the relevant contractual provisions, rules and regulations that dictate how the specific property should be managed on a day to day basis.
The lease in a residential block of flats or the transfer of a freehold unit subject to a management charge are the most important documents in understanding the do’s and don’ts for both the occupier and the management company or landlord. Of those matters determined by the transfer or lease the main points include:
What belongs to the unit owner and what is retained by the management company or landlord
What either party is responsible for - specifically in relation to maintenance but also other matters
When and what services the management company or landlord must provide
What, when and how service charge payments should be demanded and made
Whether the occupiers must comply with certain requirements as to flooring or obtain licence before undertaking certain alterations within the property or sub-letting, and
More technical issues such as the method of collection or repayment of any surplus or excess in the annual service charges or whether short term letting is permitted amongst a large number of other matters.
Where the provisions in those agreements are not implemented correctly or at all, for whatever reason, costly disputes can arise. In short, the lease or transfer is the rule book for the management company or landlord and the occupier, and it should be properly understood and carefully followed. However, by their nature, transfers and leases are drafted in ‘legalese’ and contrary or incorrect interpretation is common.
Our ‘Covenants Review Service’ will provide a report consisting of a thorough review of all relevant provisions in a single or, as necessary, a selection of transfers or leases for a development. The report sets out, clearly and in plain English, what the transfer or lease requires and enables those responsible for the day to day management to have a quick reference point before taking any action on a particular issue.
