Leasehold problems in the retirement sector

Regardless of the level of services provided, buying a flat or bungalow on a retirement scheme usually represents a substantial investment and should relieve the leaseholders of the responsibility of the maintenance and management of their homes.

If you are buying private retirement housing, you will normally select a scheme that provides the services you need, or wish to receive, at an affordable cost. The lease will set out the services you are entitled to and explain how the landlord or managing agent will recover the costs through a service charge. Once you have bought your property it is a matter of some concern if those services deteriorate or the costs increase unreasonably.

Problems which you might experience can include:

• escalating costs as management fees and service charges increase each year
• reductions in service provision, e.g. withdrawal or decrease in the hours of the resident manager service
• lack of opportunity for residents to influence the management of the scheme
• the diminishing value of your investment in the flat as the lease expires

If problems occur, your first recourse should be to speak to your manager or landlord, either directly or through your residents’ association, if you have one. If this does not, for any reason, resolve the problem, there are a number of other courses open to you, including the more drastic sanction of recourse to your statutory rights under the various Landlord and Tenant and Leasehold Reform Acts.

The law relating to leasehold is complex and subject to change. If in doubt, seek further advice.

The following courses of action should all be available to you; they are not set out in any order of preference and it will be for you to consider which is more appropriate to the circumstances. In almost all but the most urgent cases it will be sensible to attempt to find a solution by some means of alternative dispute resolution, before embarking on a more formal route, where costs could be incurred. Most of the remedies set out in the first part of this guide are fully accessible to the individual leaseholder, or residents’ association, without the need for professional advice.

You may decide that you wish to contact your managers to give them an opportunity to resolve any difficulties you have experienced. However, it is generally recognised that management problems on a retirement housing scheme can be more effectively dealt with through a formally recognised residents’ association and is called a recognised tenants’ association (RTA).

An RTA is a residents’ association which has been granted recognition by the landlord and requires at least half of the qualifying leaseholders to be represented. In cases where this recognition is not forthcoming the association can apply to the First-tier Tribunal (Property Chamber) for external recognition, if the association meets the 50% threshold.

There are several legislative remedies where leaseholders have greater rights working collectively than individually. Even without a recognised association, it may prove effective to have the support of your neighbours in any dispute with the landlord or managing agent.

You may wish to use your manager’s complaints procedure, which should be made available to all leaseholders and should form part of any leaseholder’s handbook. This procedure should state who the leaseholder should complain to and any further steps if the complaint is not resolved at the first stage.

There are often three or four stages of a complaint procedure, and the managers should give the complainant an opportunity for a dispute resolution meeting, such as mediation, or for a meeting with a senior officer if the complaint reaches the final stage of the procedure.

If all stages of the complaint procedure fail to resolve the matter, some leaseholders will have recourse to the independent Housing Ombudsman.

There are 2 trade bodies for the sector who work to ensure standards and a code of practice:

• The Association of Retirement Housing Managers (AHRM) – code of practice
• The Associated Retirement Community Operators (ARCO) – code of practice

Check membership

Membership of a trade body is optional and not a legal requirement.

You can check if your retirement development or manager is a member of a trade body online. Membership might also be detailed on their website or literature.

• Members of ARHM
• Members of ARCO

Many managers of retirement schemes are members of the Association of Retirement Housing Managers (ARHM), the aim of which is to promote high standards of practice and ethics on the management of retirement housing.

The Association has produced its own code of practice, approved by government as representing best practice in the retirement housing industry. Managers who are members of the ARHM promise to manage not only according to lessees’ legal rights, but also according to the code of practice.

For example, managers will provide:

• right to have the receipts and invoices supporting the annual accounts available on your estate for inspection
• right to an annual meeting to consult on changes to service charges
• right to a comprehensive leaseholder’s handbook
• right to set a response time for replying to correspondence or organising repairs

As part of the code of practice and ARHM’s rules, lessees are also given some additional remedies:

• all ARHM members must have procedures that allow lessees to make complaints and access to redress at a senior level
• most ARHM members offer lessees the right to use an ombudsman service to resolve disputes
• lessees may ask ARHM to investigate alleged breaches of the code of practice by its members

All ARHM members agree to make a copy of the code of practice available for reference at each retirement housing estate they manage. Ask to see it.

Where the landlord is a housing association, the leaseholders will automatically have access to the Ombudsman; some private landlords are also members of the scheme and will be able to advise you if this is so.

The Ombudsman will not usually deal with complaints unless you have first completed the complaints procedure of your landlord or manager.

The Ombudsman has a duty to investigate all complaints made to him and a number of courses of action are available to him to resolve the problem. Initially he may be able to resolve the matter through informal contact with the member landlord but, in more serious cases, he will carry out a formal enquiry. This is a very thorough examination, using the Ombudsman’s own staff to investigate all relevant aspects of the complaint; a formal enquiry may include an interview with the person complaining.

At the end of an enquiry, the Ombudsman will write to both the complainant and the landlord, explaining what he has found, what his decision is and what, if anything should be done about it. He is able to recommend to the landlord that he make an apology or pays compensation, carries out repairs or changes his management procedures.

A formal enquiry is a serious business and, in appropriate cases, the Ombudsman is able to arrange mediation or arbitration to resolve the issue.