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Management of buildings we don't own

We have over 2,000 homes where we do not own the freehold (the buildings in which they are in) and have partnered with private developers to deliver affordable housing. We’ve obtained most of these homes through section 106 agreements so we can provide a portion of the homes in a private development as affordable homes.

A section 106 agreement is a legal planning obligation set by the local council that gives a developer planning consent on the basis that their development includes an agreed portion of affordable homes. In this situation, when we lease or rent out the affordable homes, we are not the owner and therefore would not be the freeholder.

When we do not own the freehold of the building you live in, we are usually the head lessee of the building. We may not be the managing agent and in these cases, there will be a separate managing agent for the building.  The managing agent and freeholder will be responsible for maintaining the building and ensuring it meets building safety requirements.

Here, you can find out more about who is responsible for the repairs and maintenance of your building if it's not owned by Network Homes, the process you will need to take if you have concerns about the management of your building and our involvement in the process.

Freeholder and managing agent for your home

We have a list of schemes with homes we do not own as the freeholder but have leased or rented to residents. The list includes the details of the freeholder and managing agents for each scheme which is also available to you through Land Registry. Please use this list to find out the managing agent and freeholder for your home.

Please note: these details were correct as far as possible at the time of publishing and although we will try to keep this information up to date, we are unable to confirm that the information remains nor accept any liability in relation to this information being up to date at any time. Relevant enquiries should be made to verify the details provided.

View the ‘Management details for schemes’ document 

Roles and responsibilities of each party in the management of a building

This section outlines the differences and responsibilities of the different parties to a scheme where a section 106 agreement is in place and Network Homes is the ‘head lessee’. We also set out the potential action that you can take as a resident if you have a problem with the management of the building.

Network Homes is a Head Lessee, which is essentially a leaseholder, on schemes that we obtained through section 106 agreements. While we do have some extra responsibilities compared to individual leaseholders, we are not in control of the building, the decisions made about the building or legally able to carry out repairs, get insurance etc.

The Freeholder is the owner of your building. They are legally responsible for maintaining the building, insuring it and carrying out any repairs. The freeholder will usually be responsible for the construction of the building, the outer and in some circumstances, the common parts of the building. However, this may vary and so the section 106 agreement and contracts that are in place will always need to be checked to establish responsibilities. Section 106 agreements are accessible online and are generally stored with the planning decision notice and application number on the relevant planning authority’s website.

The Managing Agent is appointed by the freeholder to manage the building on their behalf. This is the company which sets up the insurance policy, organises building repairs and maintenance, etc. The managing agent determines the service charge payments for the building and sends them to all leaseholders. The managing agent will have a contract with the freeholder for the activities they are contracted to carry out. It will be for the freeholder to monitor and manage their performance, take action against or require the managing agent to take any action they deem necessary. Neither the head lessee (e.g. Network Homes) or the residents will necessarily have access to the contract in place between the managing agent and the freeholder.

As the provider of social housing on a section 106 agreement scheme, Network Homes will be a leaseholder of those affordable properties in the building, having bought them from the freeholder. We have then sold on, sold a share of, or rented out these properties. This is known as being a Head Lessee. In some cases, we are responsible for the repairs and maintenance of the communal areas related to these properties, but are not legally responsible for the general repairs, maintenance, insurance, etc. We receive service charge invoices from the managing agent and must then share out the costs between our leaseholders, shared owners and ourselves. Therefore, we do not set the service charges for these properties.

Individual leaseholders who have brought a property or a share of a property from Network Homes are known as a Sub Lessee. They are responsible for the repairs within their property and for contributing to the service charge which is set by the Managing Agent and that we pass on to the residents.

Some of the properties we bought from the freeholder may be rented out to tenants on a variety of different rental tenures. Tenants contribute to service charges via their rental payments and many of our tenants may also pay variable service charges on top of their rent depending on the arrangements in place at that property. Tenants will be required to comply with any obligations that are stated in their tenancy agreement including paying their service charges on an apportionment basis or not as determined in accordance with the terms of their tenancy agreement. They must also ensure that the property is kept in good repair, not doing anything to the property which could cause any harm or damage to the property or other parts of the building, or the other occupants of the scheme.  

Freeholder
Managing agent
Head Lessee - Network Homes
Sub Lessee - individual leaseholders (residents)
Tenants (residents)

Please note: When we use the term residents, we are referring to all of the people that live in the properties that we are the Head Lessee of. This covers leaseholders, shared owners and tenants. If something is relevant only to a specific type of resident, e.g. tenant, we will use that word rather than resident.

Need more information?

Even if we are not the managing agent, we still have duties to complete as the head lessee. The Network Homes management fee relates to the management work that we must provide in our day to day operational activities as freeholder or head lessee (depending on the arrangements we have in place for your building). In this instance, we still have responsibilities that we must fulfil which are chargeable to the residents. These fees should always be reasonable and available for inspection.

If you have an issue with your property or the building, you should contact the managing agent of your building first as they can start the processes to resolve the issue.

Sometimes freeholders or managing agents may not want to take enquiries from or speak to residents. They may say that there is no contract between the resident and the managing agent  which they can be held to account by that resident. We do not agree with this approach so where it is appropriate, we would ask you to raise any concerns you have with the managing agent’s activities directly with them.

We have some schemes (e.g. Bree Court and Avery Court) where residents have to call our repairs contact centre for certain repairs e.g. heating, even though the managing agent is responsible for providing heating. This managing agent will not deal with calls directly from Network Homes residents.  While there is no legal relationship, the managing agent as well as the person that pays the service charges does have a direct route of action if they are dissatisfied. This was confirmed by the Supreme Court in the case of Oakfern v Ruddy [2006] EWCA Civ 1389. [1]

If you rent or lease a property from us, we will support you in any way possible. You can contact us at customerservice@networkhomes.org.uk if you need our assistance. Based on what your query is about, we will either get it resolved because it is our responsibility to do so, or we will pass it to the managing agent if it is not our legal duty.

Depending on your building, you may sometimes receive communications directly from the managing agent or directly from us. If the managing agent sends us something that is relevant to you, we will pass it on.

 

[1] https://www.bailii.org/ew/cases/EWCA/Civ/2006/1389.html

You should express your dissatisfaction to the managing agent or freeholder first. Performance of a managing agent is usually governed by a contract with the freeholder, with expected performance standards set out and monitored through a service level agreement. This will be the contractual agreement by which the freeholder can take action against the managing agent.

Under the head lease, we may have an ability to take action against the freeholder in relation to their or the managing agent’s action or inaction. Whether we take action will be informed by a multitude of factors. This will include the length of time the poor/non-performance of the managing agent’s contract has been going on for, the value of the contract or failures, the reputational impact of taking action or not doing so, the cost of the legal action, the time it would take to determine the legal action, whether we frustrated the performance of the contract by the managing agent and so on.

The lease determines what services and works are to be paid for through a service charge, and how the charge is calculated. The managing agent is not able to recover the cost from a leaseholder unless the lease allows it, so the first consideration if seeking to challenge a service charge demand is to review the lease itself. You will need to be issued with a service charge payment request before you are required to pay it.

Service charges are subject to statutory controls, in particular the requirement that they are reasonably incurred and for works carried out to a reasonable standard; or where the charge is payable before the relevant costs are incurred, no greater than is reasonably payable. Where works or services fall short of this reasonable amount, the landlord will only be able to recover charges to the extent that they are reasonable.

Some works or agreements would cost the individual leaseholder over a certain amount of money – these are known as 'major works' and 'qualifying long term agreements'. In this case, there is a statutory consultation process that must be followed, unless the First-Tier Tribunal (Property Chamber) grants the landlord dispensation (exemption) from those requirements. Where the process is not followed, unless dispensation is granted, the landlord will be limited in the amount of service charges that can be reclaimed.

If a leaseholder is unhappy with the charges raised, then they can apply to the First Tier Tribunal (Property Chamber) for a determination as to whether or not a service charge is payable. A leaseholder might also seek to escalate complaint matters (i.e. whether a complaint has been appropriately and fully responded to) to the Property Ombudsman. The Property Ombudsman is not a regulator and does not have the authority to take regulatory or legal action against an agent, impose fines or dictate the way agents conduct their business as the First Tier Tribunal can.

In addition, leaseholders have certain statutory rights. Leaseholders are entitled to information about service charges, including the opportunity to inspect the landlord's accounts. The landlord must respond within a certain timeframe to these types of requests.  If the charges have been raised by the freeholder or managing agent which is not Network Homes, we may not hold the supporting information requested. We will always provide access to what we have but it may take slightly longer than usual if we need to obtain further information from the freeholder or managing agent. You can find out the contact details for the leaseholder or managing agent of your home on this page if you would like to raise enquiries directly with them.  

There may also be certain situations where leaseholders can request that the service charge account is independently certified. If this is done, any costs arising are directly transferable to the leaseholders as part of the related service charge.

How we can help

There may be no express legal obligation for us to take action against a managing agent or the freeholder on behalf of the residents. The obligations will vary according to the lease. It may not be possible for Network Homes to confirm the position as it relates to the action we can, have or will be taking against a managing agent or freeholder.

However, we actively monitor all of our schemes and the performance of our managing agents, where it is within our contractual ability to do so, taking action where we consider it necessary. Where we take action on behalf of the residents, our costs in doing so would be directly transferrable to the residents in accordance with the terms of the lease. As a resident, you can also challenge the freeholder’s service charge demand directly with them. We would always recommend you raise any concerns directly with the freeholder or managing agent in the first instance.

The freeholder and their managing agent are responsible for investigating the building’s external wall system, identifying any issues, putting together a remediation and funding plan, carrying out the remediation and maintaining insurance on the building. If we do not own the building, then we will not be the freeholder for the building as the freeholder would be the owner.

As the head lessee, we are not legally responsible or able to carry out building safety work at your building due to the legal structure and relationships between each party. In limited circumstances, we may be responsible for installing and maintaining alarms/sounders in our communal areas, with permission from the managing agent.

Network Homes management fee
Who to contact if you have an issue with your property or building
What to do if you have a problem with the action or lack of action of the managing agent
What to do if you are unhappy with your service charge
Who to contact for building safety issues

We hope you find this information useful on clarifying responsibilities for properties that were built as part of a section 106 agreement. We want to work with our sub lessees in these buildings to ensure the freeholder and managing agent carry out their legal responsibilities. If you have any queries or concerns about the management of you building, please get in touch with us by email at customerservice@networkhomes.org.uk.

Find out more about the management of section 106 buildings

 

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