Case Study: Moving in the Right Direction

Young group is an investor responsible for in excess of £130million worth of property managed on behalf of its investor landlords. They took action when they discovered the management at MyBase in South East London, did not meet expectations.

Young Group CEO, Neil Young, explained: “Within a short period from completion, the fact that maintenance issues were not resolved as they occurred, meant they became more significant – creating more damage and becoming costlier to repair. For example, blocked gutters that had not been cleared caused flooding on the roofs which resulted in leaks into homes, damp and mould growth.”

The four-year-old development, built by Buxton Homes, comprises 155 apartments (including 53 social housing units), eight houses and seven commercial units.

Young approached managing agents Chainbow to initiate the no-fault Right to Manage (RTM) process after receiving feedback from tenants, clients and neighbouring owner occupiers raising concerns over the maintenance of the development.

Young said: “Initially, we persevered with the previous agents, but it was clear that neither they nor the freeholder were acting on our very real concerns.”
Among the main complaints were slow response to enquiries; poor maintenance including limescale leaks in the car park, which permanently damaged cars; not issuing budgets and filing year end accounts late; and unreasonable fees and insurance costs. Young said: “Understandably, the affected tenants were disappointed and the general health and appearance of the building was going downhill. Through no fault of their own, the performance of our landlords’ investments was suffering and residents were not experiencing the standard of straightforward, proactive block management that they should have done.”

RTMs require a minimum 50% of qualifying leaseholders. 72.5% of leaseholders at MyBase supported the legal process.

One supporter was private landlord, Richard Houltby, “When Young Group approached me and said they wanted to use RTM to make a change, I was pleased to see them take an active role in managing my property asset. Good block management is an added selling point for my investment, which can give an apartment an edge over a rival development. No one wants to live in a poorly maintained property.”

After almost a year, the RTM was acquired and Chainbow were appointed as block managers in January 2011. Louise Whitley, an apartment owner-occupier, commented, “Things have changed since Chainbow took over. There was a lot to tackle, but things are moving in the right direction.” Young Group is continuing to consult with Chainbow to recover expenses and alleged overcharges from the previous managing agents.

Roger Southam is the Chairman and Chief Executive of Chainbow.