DDB 126 ASSOCIATION OF RESIDENTIAL MANAGING
AGENTS
19 March 2004
Response to the Consultation
Paper on the Draft Disability Discrimination Bill
General:
1.1 ARMA welcomes the opportunity to
respond to this Paper and broadly supports the proposals contained
therein in terms of clauses 6. and 7. which would impact on our
sector.
1.2 ARMA's response is broken into
two parts:- a description of ARMA and then general comments on
the Paper relating to clauses 6. and 7.
2. About ARMA:
Formed in 1991, ARMA is the only body
in England and Wales to focus exclusively on matters relating
to the block management of leasehold property. With some 140 corporate
members managing around 450,000 units in over 16,000 blocks of
flats (at least 50% of which are lessee-owned properties),
the Association's founding principal aim is working towards improving
standards for lessees, freeholders and resident management companies.
ARMA believes there are some 1.5 million
long leasehold flats in England and Wales roughly split 50:50
between purpose-built and conversions.
However, Government statistics indicate
the figure is nearer 1.0 million and then according to the Survey
of English Housing for 1998/99 "two-fifths of these leasehold
flats are currently managed by the leaseholder themselves, without
the use of an agent.1~
On the basis of these figures it would
appear that ARMA members manage more than two-thirds of properties
under professional management in England and Wales.
3. General Comments:
3.1 ARMA members are involved with
the management of buildings, whether purpose-built or converted
houses, where residents own the long leases of their flats and
the landlord owns the freehold land and the common parts of the
building.
3.2 The lessees 'own' their flats for
a given number of years, normally 99 years or more from the original
grant of the lease. The lease is a contract whereby the landlord
covenants to maintain, repair etc. the common parts and the lessees
covenant to reimburse all the (reasonable) costs of the landlord
in delivering such services. Normally the covenants in the lease
will enable the landlord to recover (reasonable) costs in complying
with statutory requirements.
3.3 On 1st October 2004 the Disability
Discrimination Act 1995 will be fully implemented whereby service
providers to the public will be required to take all reasonable
steps to ensure that their physical premises do not discriminate
against disability.
3.4 ARMA's current understanding is
that this requirement will not apply to the common areas of blocks
of flats in terms of the landlord being forced to make structural
or physical alterations to the property but that where practical
alternatives exist they should be implemented.
3.5 Similarly ARMA's understanding
of the expectations of this Draft Bill will not impose such requirements
in the future but does extend the requirement to other non-fabric
issues of managing such buildings.
3.6 ARMA, while fully supporting the
intentions of the Bill, would point out that should it apply to
blocks of long leasehold flats then these homeowners may be faced
with requirements and costs that would not apply to freehold house
homeowners and therefore create an imbalance in the types of home
ownership.
3.7 While the Paper may assume that
the landlord might either bear the costs or recover the costs
over his whole rent roll this would not necessarily be the case
in a leasehold situation. The landlord may have to bear the costs
because the leases do not permit their recovery or because the
other lessees in the building challenge their reasonableness in
forming part of the service charges levied.
3.8 This point (3.7) is of particular
concern where the landlord is the lessees themselves in the form
of a Residents Management Company (RMC) which is owned and controlled
by the lessees and which in turn owns the freehold and through
a board of (lessee) directors controls the management.
Should such an RMC find it cannot recover
such costs, having no resources of its own, it may be forced into
liquidation or, perhaps even worse, if they are recoverable create
a divided community.
3.9 In summary we would ask the Committee
to give serious consideration as to the impact of this Bill on
residential leasehold blocks of flats in terms of
a) Whether it is appropriate that they
are properly in scope.
b) The imbalance that could be created
between residential leaseholders and freeholders.
c) The possible extra costs to the
service charges of compliance.
d) The potential increase compliance
costs of managers of such buildings which will be passed onto
the leaseholders.
3.10 By way of two examples known to
ARMA we would like to demonstrate the complexities involved in
applying the Act and the Bill to leasehold blocks of flats:
a) A wheelchair-bound
lessee, living on the first floor of a low-rise block with no
lift, asking that a stair lift be installed:
- Who would pay for this?
- Who would maintain it?
- What are the fire escape implications?
- What are the insurance implications?
- What are the subsequent reinstatement
arrangements?
b) A deaf lessee insisting a sign-language
expert is present at a small general meeting of lessees:
- Who should organise it?
- Who would pay for it?
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