Q&A - Burglar Alarm System

Block B was fitted on construction with a burglar alarm system. There is a system of wiring throughout the building which is the responsibility of the landlord, and control panels, wiring and sensors in each apartment which are the responsibility of the leaseholder.  The communal part of the system has been regularly maintained but only 2 residents have taken out a maintenance contract for their own systems. It is thought that 25 out of 28 leaseholders do not use their alarms and of the 3 that do 2 have maintenance contracts and 1 has never had any such contract. The alarm maintenance company tells us that the system is totally unsuitable for City Point as it is a system designed for a building with a concierge which we neither have nor need. It provides no method of connecting alarms to a call-centre or keyholder.  Over the years some faulty installations ( which were not maintained) in flats have been disconnected from the system because they were corrupting the communal elements.  When there is a power-cut, alarms sound in apartments and cannot be disarmed, causing disturbance for hours.

Our maintenance company recommends decommissioning the system as it is not fulfilling its purpose, has some obsolete equipment  and is becoming increasingly difficult to maintain.  Individual leaseholders could then use the existing wiring and sensors in their apartments and install an individual panel of their own choice – or do without an alarm as most do at the moment. However, some contents insurance policies require the the provision of a maintained burglar alarm system.

Unfortunately the 6th Schedule of the lease, The Services, Part 2, Paragraph 3 includes the following as a service that the freehold company undertakes to provide:

“Providing operating periodically inspecting maining in proper working order overhauling repairing renewing and replacing in whole or in part any heating and/or ventilating and/or air conditioning and hot and cold water systems and generators entry phones and security gates and other security equipment communal television aerials and cable systems and other telecommunication equipment and other plant servicing the Estate (but not solely serving any individual dwelling) other than lifts shafts and machinery…..”

When Block B was marketed in 1999/2000 the publicity material referred to the availability of the burglar alarm system. The reference above to “other security equipment” is on the face of it wide enough to include the burglar alarm system.

The communal parts of the system cannot be properly maintained and repaired and there is no demand for a complete replacement of the system, which would be extremely costly.  Is there any way in which we can comply with the lease whilst decommissioning the communal parts of the system leaving leaseholders with the existing infrastructure within their apartments to be used to connect (or not) to an individual alarm panel

If we decommission the system would we have to advise the leaseholders what steps they may wish to take to make use of their individual systems? Could we properly infer that the fact that a leaseholder has chosen not to maintain his individual system means that he has waived any right to insist on the provision of a burglar alarm system?

ANSWER

It is always difficult to comment on an exert of any document but especially a lease and even more so when the Estate comprises distinct blocks of which the leases might not be drafted on the same terms.

However, based on the information provided, it is clear to me that the freehold company of which you are a director has covenanted with the leaseholders, including yourself, to provide, operate, periodically inspect, maintain in proper working order, overhaul, repair, renew and replace, in whole or in part any . . . other security equipment . . . serving the Estate . . . (The punctuation is mine but I suspect a Court or First-tier Tribunal would accept my construction of this paragraph 3 and I agree with you that the same Court or Tribunal would consider the burglar alarm system to be swept up by the generality of ‘other security equipment’.)

The fact that leaseholders may decide not to avail themselves of one or more of the services that your company provides does not mean you can ignore your obligations under the leases. Of course, the company can take steps to vary the leases to carve out the obligations in respect of the burglar alarm system but in the absence of all the leaseholders’ consent, the company will need to make an application to the First-tier Tribunal.

As a director, you must detach yourself from the leaseholder inside you and exercise your fiduciary duties on behalf of the freehold company to ensure your company is not exposed to a claim for breach of covenant. Therefore, until and unless the leases are varied, you cannot decommission the burglar alarm system.

However, as a director, you can take comfort in the knowledge that the inclusion of this paragraph within the Services provisions of the leases, means that the cost of providing, operating, periodically inspecting, maintaining in proper working order, overhauling, repairing, renewing and replacing, in whole or in part the burglar alarm system in Block B, is recoverable as a service charge from the leaseholders of Block B (and maybe Block A too, subject to the terms of the leases).

I realise that you are both a director and a leaseholder. Therefore, it is understandable that the inner-leaseholder inside you and your fellow-directors will be screaming out to ignore my advice but your director’s hat must protect you from the temptation to ignore your contractual obligations. You must ignore your hearts and rule with heads because if a claim is made against your company for breach of covenant, your heads could be for the chop.

Shmuli (Paul Simon), Director of Leasehold Law, Integrity