The Residents of White Star Place
A building of 71 units located in Central Southampton was featured on BBC News due to leaseholders being unhappy with the standard of services being received from the managing agent and contractors. The leaseholders contact Initiative Property Management to explore the potential Right To Manage acquisition at the site. Clients
The agent acted for the large corporate freeholder. Consequently, the 71 leaseholders had no influence over the allocation of the service charge funds they were paying. The site had a history of significant overspends which resulted in large unexpected balancing charges for leaseholder. In a recent year, a balancing charge of over £1000 had been received!
The building occupancy was split approximately 50/50 between owner occupiers and buy to let investment landlords. This split and barrier to communication meant that leaseholders were unable to present a united front. The group was unable to mobilise in order to make things better.
Initiative hosted a meeting in Southampton town hall to explain the Right To Manage process and benefits. The leaseholders were interested in proceeding and a limited company was incorporated. Initiative supported the RTM Company by writing letters to all leaseholders on their behalf to encourage participation.
The membership of the company surpassed 50% of the building occupancy and Initiative, acting as Company Secretary, served the Claim Notice on the corporate freeholder. The corporate freeholder used their in-house legal team to verify the claim and the claim was upheld. The new RTM Company directors met regularly, analysing all costs at the site. Initiative Property Management were appointed as the new agents and new local contractors were selected. The previous agent had been using national firms for all maintenance works which meant that, I n contrast,. Local firms realised significant savings.
The Longer Term Effect
The leaseholders have not received a balancing charge due to an overspend since Initiative took control in 2012. The service charge shave remained level since that date, with savings realised through halving the previous agent’s insurance premium. A better class of tenant has become a regular feature of the site and vandalism by students has fallen to near zero.
Persistent fly tipping issues, which had proved costly to the service charge fund, have been resolved through the installation of new bin store security doors. Bicycle theft has been eliminated from heightened security. In 2015, the building render has been cleaned and makes the building look fresh. Values of the units are increasing. The Right To Manage directors, having met on a monthly basis on the first year, now trust Initiative to the extent that they only need to meet on an annual basis to review and approve the subsequent year’s budget.
What The Client Said
When I first purchased the property the prior agents were withholding service of non-payment dispute with some of the estate, the estates bank balance being close to zero. Even when they did resume service getting problems resolved took a great deal of time, hassle and expense. Annual fees were often topped up with bills for ‘additional unforeseen costs’ the bin stores were frequently over flowing and the site was generally messy and run down. Initiative and Steven Greaney guided us through the RTM process and took on the work involved to setup the company. Once the RTM company was formed we elected to go with Initiative even in the first half year when Trinity Estates held-up fund transfer the difference was night and day. Working with local contractors Initiative PM have substantially reduced the annual fees, and we now have a sinking fund to pay for major works. We no longer have issues with over flowing bin stores and the general appearance is much improved, reporting issues is hassle free and they’re always responsive.Mr McGann – White Star Place