Post - Enfranchisement action points

a. Service charges – Have all service charges payable to the outgoing freeholder been cleared? Have arrangements for service charge funds to be transferred been made?

b. Notifying all leaseholders – All leaseholders should be informed of the successful completion, whether or not they participated in the freehold purchase.

c.Bank accounts – All bank accounts holding service charge monies must have ‘trust/client account’ status to comply with section 42 of the Landlord & Tenant Act 1987. If in doubt, speak to our agent and/or bank.

d. Contracts – Existing contracts may be frustrated because the outgoing freeholder’s management functions have come to an end on completion or there could be a breach of contract. Consult our agents about this.

e. Lease Extensions  – We can grant ourselves new, long leases – we just need to pay legal fees. Should the terms of the leases be varied – e.g. to allow wooden floors, or permit subletting? Consult our solicitor about this.

f. Major works – Now we are in control of our building, we need start planning for future capital works such as cyclical external repairs and redecorations, internal common parts refurbishment, communal garden overhaul, etc. Our agents can help prepare a 10 year plan and annual reserve fund contributions.

g. Insurance – We can now choose our own buildings insurer. Check the renewal date and use our managing agent’s buying power – they or one of their brokers could save money. We need to decide if we want terrorism and directors & officers liability cover. Consider a reinstatement cost assessment of the building.  

h.  Income Generation – Is there undemised space (such as our under-pavement vaults and basement storage cupboards) ripe for development/allocation, which could generate income or capital for the shareholders? 

Jonathan Channing FIRPM is a Director of Farrar Property Management