Property ManagerFILE March 2010
200 Years of Serving the Community - The Brethertons Story 1810 to 2010
In 2010 Brethertons LLP is looking forward to celebrating our 200th year in business.
Our firm has been practising law for two hundred years, since 1810 when Count William Ferdinand Wratislaw (1788-1853), a Bohemian nobleman, began his legal practice in Rugby, Warwickshire, aged 22 years.
Our firm’s history starts in 1810, a year when King George III was on the British throne and when Francisco de Goya painted his famous self-portrait; when composer Frederich Francois Chopin was born and it was five years before Napoleon’s defeat at The Battle of Waterloo.
Our firm’s founder, Count William Ferdinand Wratislaw, was the third son of Marc Wratislaw (1735-1796), and it is William that founded his solicitor practice in Rugby – the forerunner of today’s Brethertons LLP.
The Wratislaw family history goes back further than this, as William’s father Marc Wratislaw was a Bohemian descendent of John Wenceslau Wratislaw von Mitrowitz (Count Wratislaw). The Count had supported Prince Eugene of Savoy Carignan to rally reinforcements to fight in The Battle of Blenheim in 1704 in which the Duke of Marlborough, John Churchill, and the allied forces won and the French surrendered. The Battle was a turning point in the War of the Spanish Succession and Blenheim Palace in Oxfordshire was built by the Crown as a gift to Marlborough to mark the importance of the success of the campaign.
John Wenceslau Wratislaw’s name might sound familiar as he was a descendent of “Good King Wenceslaus” or the Duke of Bohemia (907-935), who was the son of Wratislaus the First of Bohemia – Vratislaus I (888-912) and who had been a lawyer in his early years. The lineage can be traced all the way back to Krok the Munificent (born 614AD) who founded the city of Krakow in Poland.
Most of the sons of the UK arm of the Wratislaw family have been educated at Rugby School and Oxford University, many have tutored or been past Masters at Rugby School like The Rev. Albert Joseph Wratislaw in 1809 (who lived in Clifton) and George Galbraldi Augustus Wratislaw in 1815, and many were trained as lawyers in the family firm:
Charles Edward Wratislaw (1826-1861) and Theodore Marc Wratislaw (1831-1919) went on to become solicitors and continued the legal practice, then known as Wratislaw & Thompson.
It was Theodore’s second son, Marc Eugene T.G. Wratislaw (1879-1962) who took over the family practice. The practice continued to grow and develop, as the town of Rugby has grown and developed before, during and after the war years, with Marc Eugene T.G. Wratislaw fighting in the Army and also receiving the Home Service Medal in World War I. The firm has seen a few name changes since then:
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Wratislaw & Thomson 1860-1905 - Joined by Frank Thompson
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Wratislaw & Fuller - By 1865 the firm was called Wratislaw & Fuller. Frederick Fuller later dissolved his part of the partnership and his new firm became Frederick Fuller & Sons in Rugby.
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Wratislaw Dean & Bretherton - Re-named in 1928 - Marc Eugene T. Wratislaw and Charles Dean, of Pulman & Dean from Lutterworth (a firm acquired by Brethertons). Partners also included Arthur Augustus Bretherton, Bernard Crofts and Raymond Morris.
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Wratislaw Bretherton & Crofts - By 1933 the firm was called Wratislaw Bretherton & Crofts.
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Bretherton Crofts & Turpin - By 1945 the firm was called Bretherton Crofts & Turpin, joined by Maurice Sherbrooke Turpin.
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Bretherton Turpin & Pell - Re-named in 1960 joined by Montague Noel Pell. Richard Pell who is the senior partner at Brethertons LLP today, is the son of Montague Pell. Partners included Richard Pell, Paul Smith, John Duffy, Tony Sutton, Christopher Pratt, Roderick Ross and Clifford Cooper. This firm’s name continued until 1992.
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Brethertons - The firm was re-named in April 1992.
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Brethertons - In 1995 Auld & Jardine, a Banbury firm, merged with Brethertons.
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Brethertons LLP - Changed to LLP status in 2006.
Since 1900 there have been a few name changes of the firm and Brethertons was officially created under a single name in 1992. In recent years, Brethertons has seen the most change, growing steadily and doubling in size in the past 10 years, introducing a strong corporate team providing advice and assistance to companies and directors, including a dedicated commercial property team.
In 1995, Rugby-based Brethertons merged with Banbury-based corporate commercial firm Auld & Jardine and this gave us a foothold into a second county, Oxfordshire, and further enhanced our commercial offering. Over half of the firm’s work is commercial in nature including litigation, commercial property and debt recovery.
The other half is advising individuals on private client matters including wealth planning, and family law.
The firm’s private client foundation is in the provision of quality legal advice to all sectors of the local community on issues affecting them. We have moved on from our historical roots of being the family trusted lawyer, but have still maintained complete focus on all round service delivery, whether this in times of bereavement or family discord, financial crisis accident or illness.
In Rugby and Banbury the firm has over many years had a well-respected, efficient client-friendly domestic conveyancing service
The firm adopted LLP status in 2006.
Brethertons LLP recognises the importance of our role in the communities we operate in. We are proud of our legal roots and how the firm has continued through the ages, and how we have adapted and changed as the law itself has changed. We are a firm that is passionate about our legal work for clients and our obligations to our community and we continue the charity-giving tradition started by Count Wratislaw.
Today, clients of the firm include well-known listed companies, owner-managed businesses, SMEs and individuals including, directors, accountants, IFAs, managers, those of high net worth and landowners. Our firm has won many awards for client service, innovation and legal prowess and we are seen as ‘leading the field’ in the delivery of legal services using new methods of technology and online solutions.
It is all a far cry from 1810.
Getting it Wrong – Common Service Charge Collection Mistakes
As any Property Manager or Director of an RMC knows, one of the most frustrating aspects of Leasehold Management is dealing with those Lessees who for whatever reason don’t want to pay their Service Charge.
In this article, Shaun Jardine a Partner at Brethertons Solicitors LLP, outlines some of the common problems that occur in relation to service charge collection and how they might be avoided.
1. RTBL
Read the b….. Lease. I know it is perhaps trite to state the obvious, but one of the most common problems that occurs when dealing with service charge collection is that the service charge is not demanded in accordance with the Lease. I realise that it is easy for a lawyer to say “read the Lease” when Leases are quite unwieldy documents and don’t often seem to make sense on the first reading. When there are mistakes (and these are common), the person who is responsible for drafting the Lease (another lawyer!) is not on hand to explain what his original intention was.
2. Incorrect Service Charge Demands
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Are they being demanded in the correct name of the Freeholder/Management company?
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Does the demand identify the Landlord and has an address for service of Notices?
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Does it identify the correct Lessee and is it being sent to the address that the Lessee has requested that correspondence be sent to? Quite often in relation to buy-to-let properties, problems arise when service charge demands are sent to the flat, notwithstanding the fact that the owner doesn’t live there and has specifically requested that the demands be sent elsewhere
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If the property is in Wales, has the Statement of Rights of Obligations been served in Welsh as well as English? (This understandably catches a number of Property Managers out).
3. Avoid Disputes
Is there one? If there is, have attempts been made to try and resolve it? Believe it or not there are many Property Managers who don’t instruct solicitors to recover debts and have never been to LVTs! The reason, and it is always the same reason that is given, is that “we communicate with our clients’ Lessees”. The Lessees are on board before service charge demands are sent, they know what they are getting, they know what the costs are likely to be, they receive a good service and they are happy to pay for it.
4. Forfeiture Options
Understand what forfeiture is and how it works. For example, RMCs should not assume that they have the right to forfeit for non-payment of service charge. The right to do so is not conferred upon them. The same applies in relation to RTMs.
If you can’t forfeit, what are other options?
5. LVTs – take them seriously
LVTs can damage your wealth (or certainly the wealth of a freeholder/RMC). You only have to read some of the decisions reported on the LEASE Website to know that many cases that get before LVT’s are badly prepared. If a Property Management company is trying to argue that service charge should be paid and a Lessee is arguing that the services that have been provided are sub-standard and then at the LVT hearing a Property Manager turns up with an appallingly prepared case, it is not surprising that the LVT may have some sympathy with a Lessee.
Property Managers should also bear in mind that some of the panel members may well be surveyors from their competitors. They will therefore be explaining their charging structures, practices and procedures to organisations who will be very interested to learn how they operate. Also bear in mind that the decisions will be made public on the internet. It is not uncommon for Lessees to search through all of the published LVT decisions and point out other examples of Managing Agent error in support of their cases. It does not make for a great reference!
6. Documentation, documentation, documentation
For the reasons set out above, documentation is extremely important. If a Property Manager is challenged about the reasonableness of service charge it may relate to periods before they were responsible for the management. It is obviously vital on the handover from one block to another that the incoming management agents gets all of the documentation, vouchers, invoices etc from the former managing agents. This in practice can be very difficult. However, my advice would be to any Managing Agent not to take over the management of a block until it is provided, because if you have to try and justify the costs incurred three or four years before you took over the management, you will be unable to do so.
7. Speed
Act quickly. In these days when many people are dealing with their cashflow on a “rob Peter to pay Paul” basis, you have to act quickly. Send Service Charge Demands out early. A demand can be sent a couple of weeks before the due date, pointing out that the payment is required on the due date. Send a chasing letter 7 days later. If the demand is still unpaid then instruct solicitors. In order to comply with the recent amendment to the Civil Procedure Rules and the Pre-Action Protocols, when collecting debts from consumers, 14 days notice has to be given prior to commencing any legal action. So even if you act as I have outlined here, it could well be 21 days after the due date before you are in a position to commence proceedings for non-payment. Get known as “Paul”.
8. Building Societies/mortgage lenders
Understand the internal procedures of mortgage lenders. In the current economic climate these are changing on a day to day basis. Some Building Societies that would pay service charge on behalf of their borrowers on receipt of a letter before action from a solicitor, now require a Section 146 Notice or even possession proceedings to be commenced. If you build in these “time lags” to your credit control procedure you will see that it is vital to commence action sooner rather than later.
9. Mediation
For many reasons mediation should be seriously considered. It is quicker and cheaper than litigation. Whilst usually both parties bear equally the costs of mediation, this isn’t that different to bringing a matter in a small claims court and not recovering all of your legal costs, or being on the wrong end of a Section 20C Application before an LVT.
One of the great advantages of mediation is that it is confidential and the decision/agreement will not be published on the internet so therefore other Lessees won’t know what settlement was reached.
10. Understanding enforcement options
There are many options to Property Managers/RMC Directors once a Judgment has been obtained. These include:
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bankruptcy proceedings if the debt is more than £750
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obtaining an Attachment of Earnings Order against the Lessee’s Employer (this can be particularly useful as it embarrasses Lessees into paying up earlier if their employers then discover that their employee is not credit worthy and is causing internal problems for the payroll department every month!)
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sending in the Bailiffs or Sheriffs to home addresses (this can be particularly useful when a Sheriff is sent to a home address of a buy to let Landlord)
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obtaining Third Party Debt Orders and trying to obtain monies direct from the Lessee’s bank account.
Now I realise that many readers will think ‘well how do I know where the Lessees bank or where they work?’ The answer is, you should have this information already. If you photocopy incoming cheques when service charges have been paid, you will have details of the Lessee’s bank account. Also, as part of your fire risk assessment when you take over the block (and remember at this time you don’t have a dispute), you might want to find out where your Lessees actually work. If, for example, there was a disaster and the block was to burn down, how would you communicate with the Lessee at their place of work.
11. Don’t be tempted to break the law!
If you can’t serve a valid legal Section 146 Notice, don’t do it. Recently my firm advised a client that the management company that had instructed us was not in a position to serve a Section 146 Notice and threaten the Lessees with forfeiture. The clients decided to dis-instruct my firm and instruct other solicitors who were willing to do so! Leaving aside the fact that sending demands to individuals when a solicitor knows they are wrong is a breach of the Solicitors Code of Conduct, the Directors of the management company concerned could well find themselves open to prosecution under the Administration of Justice Act which prevents the “harassing” of debtors. You can’t threaten an action when you know it is wrong.
12. Work with your Lawyer- You are on the same side.
The relationship with your solicitor should be an extension of your credit control procedure. It is not uncommon to have different procedures for different blocks and developments. Collecting service charges successfully is usually the result of good teamwork.
PM Alliance Launch
Brethertons new service known as PM Alliance launched on 1st October 2009 is being hailed as a huge success.
PM Alliance allows property managers and lawyers to work together as a team to recover service charge and ground rent arrears quickly, efficiently and economically. Brethertons bespoke case management software can be set to automatically proceed and recover debts including obtaining payment from mortgage companies, issuing county court proceedings and obtaining judgement, up to and issuing forfeiture and possession proceedings. Benefits include:
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A no recovery, no fee service, subject to the contents of the lease
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Detailed lease reviews
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Remote secure online access to our case management system
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Detailed management reports
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Free detailed flow diagrams, fact sheets, briefing notes/newsletters
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Invitations to our on-line training webinars
For further information please contact Caroline Lee, Head of Business Development on +44 (0) 1295 661412 or carolinelee@brethertons.co.uk or Alison McCormack, Head of Operations on +44 (0) 1295 661486 alisonmccormack@brethertons.co.uk
Institute of Residential Property Management (IRPM) Revision weekend Part II Examination Revision Weekend
On Saturday 6th March and Sunday 7th March we are in conjunction with the IRPM holding an interactive workshop weekend which has been designed to help candidates prepare for their Part II examination and under the guidance of attending lawyers
This workshop weekend, is of course, also suitable for property managers not intending to sit the Part II but wishing to refresh/increase their technical expertise and add to their CPD hours.
This year the entire weekend will be held at Menzies Welcombe Hotel Spa & Golf Club in Stratford Upon Avon.
To participate in this workshop weekend please contact Caroline Lee on +44 (0) 1295 661412 or carolinelee@brethertons.co.uk or or Alison McCormack, Head of Operations on +44 (0) 1295 661486 alisonmccormack@brethertons.co.uk
Extended Service – Adding Value
Due to strong demand and our ongoing commitment to meet client needs, the Property Management team now offer an extended working week from 8am – 7pm Monday to Thursday also opening on Saturdays from 9am – 12:30 mid day.
Managing agents in particular find the extended service advantageous as our property managers are able to contact lessee’s out of hours and there are more hours in the day spent recovering areas without increasing the agents legal costs.
Head of Operations Alison McCormack told us "A recent pilot scheme proved so popular with our clients and resulted in such good levels of recovery that it was an easy decision to make to extend the pilot and make it part of the PM Alliance offering"
Duty of Care to Employees – Obvious Risks
Every employer owes a duty of care to its employees, but deciding who is responsible for an accident can be very difficult when the issue is whether warnings against risks should have been given or, if given, were adequate.
Employers often argue that employees are responsible for their own actions, but employers have a duty to warn employees of potential risks in the workplace, even if these are obvious. A recent case has confirmed that some risks are so obvious that warnings need not be given, for example where to argue a lack of awareness of the risk would be absurd. However, it is hard to distinguish between what would be deemed to be that obvious and what would not.
In the case in point, an employee turned a box upside down in order to reach material on a top shelf. The box slipped from underneath him, causing him to fall and sustain injury. The employee’s case failed both in the lower court and on appeal because the employer had specifically warned all employees that the use of boxes for this purpose was unsafe and had provided a safe alternative for reaching high items.
The Court of Appeal said that an employer is responsible for devising safe working methods and practices and, where they have issued a warning against a specific risk, they should not be held liable for an injury to an employee who ignored the warning. The judge commented that ‘some dangers are so obvious that no instruction is required’ but this would not have been the case in this instance. Had the employer not warned of the potential risks attached to using the box for this task, the argument that the employee was capable of appreciating the risk for himself would have been rejected.
What constitutes a sufficient warning is a grey area and is an issue of fact, not law, so previous case rulings provide little assistance as each case is judged on its own facts. In an unreported case, an employer was held to be liable for an injury sustained by an employee who had mopped a floor and then slipped on the wet surface she created. The employer argued that it was obvious that the floor would be wet immediately after mopping and that it needed to be dry mopped to be safe. This argument was rejected by the court, however.
It has been suggested that an employer is only under an obligation to warn employees of risks that fit within the broad remit of the employee’s job description. For example, if an employee were to put his fingers into an electrical socket, the employer would not be liable for the resulting injury as this was not a part of their ‘system of work’. In contrast, an employee who has been asked to rectify a paper jam in a photocopier should be warned of the risks. In some circumstances, an employer may decide to let experienced employees devise their own safe working practices in relation to certain tasks but, ultimately, it is the employer’s responsibility to assess and warn against workplace risks.
The best way to safeguard against potential claims is to warn against all potential risks, however obvious. Ensuring a full risk assessment of tasks is carried out and that all staff are trained properly is paramount.
The Duty to Manage Asbestos – HSE Guidance
According to statistics provided by the Health and Safety Executive (HSE), asbestos is the single greatest cause of work-related deaths in the UK. Every year 1,000 people who have been involved in carrying out building maintenance and repair work die as a result of past exposure to asbestos fibres and it is estimated that half a million commercial buildings still contain asbestos.
Buildings all need repair and maintenance work from time to time and it is when asbestos fibres are disturbed, e.g. by drilling or cutting, that they are most likely to be inhaled as a deadly dust. The Control of Asbestos Regulations 2006 introduced a legal duty to manage asbestos. The duty applies to all non-domestic buildings and the common areas of residential rented buildings.
If you are responsible for maintenance and repairs of premises covered by the Regulations, you have a duty to manage asbestos if:
Whilst a building constructed in or after 2000 is unlikely to contain asbestos, if it was built on a brownfield site or contains old equipment (for example ovens, brakes, soundproofing, insulating mats, fire blankets, oven gloves or ironing surfaces), it is important to follow the correct steps in order to comply with the law.
The ‘duty holder’ must take reasonable steps to find out if the premises contain asbestos and, if they do, its amount, where it is and what condition it is in. Unless there is strong evidence that the building does not contain any asbestos material, it must be assumed that it does.
The HSE has published new guidance, which takes duty holders through the process of understanding their obligations with regard to the management of asbestos. This includes a useful checklist of each step that must be taken and an example of an asbestos management plan. In addition, it can also help you decide whether or not you need to use an HSE licensed contractor to carry out planned maintenance work.
Want to Sack Your Auditor? Pause for Thought
If you are not seeing eye to eye with your auditor because their view of your financial statements is at variance with yours, and you are thinking of making a change of auditors, you should be aware that Sections 522 to 525 of the Companies Act 2006 set new requirements for auditors and companies to notify the ‘appropriate audit authority’ when an auditor ceases to hold office.
Furthermore, in certain circumstances, the auditor must inform shareholders and creditors of the circumstances under which they are ceasing to act.
The rules governing when a notification has to be made are complex, but guidance which makes useful reading for directors of companies in this position can be found at http://www.frc.org.uk/pob/regulation/notification.cfm. Note that both auditors and companies need to notify the ‘appropriate audit authority’, but there are significant differences in how the requirements affect auditors and companies.
How Many Hours Do Your Workers Work?
Following the recent failure of attempts by the European Union to change the Working Time Directive, so as to make it unlawful to allow a person to work more than an average of 48 hours a week, the current Directive remains in force. This means that the opt-out from the 48-hour weekly working limit negotiated by the UK remains in place. With many businesses trying to cut staff costs, now is a good time for employers to check that their efforts to cope in difficult economic circumstances do not mean that they are failing to comply with the laws relating to working time.
Under the Working Time Regulations 1998, which implement the European Working Time Directive into UK law, the general rule is that an employer must take all reasonable steps to ensure that the working time of any adult worker does not exceed an average of 48 hours for each seven days during a 17-week reference period. However, if an individual worker is willing to work more than an average of 48 hours per week, this is allowed provided that this is evidenced by a signed opt-out agreement. The agreement must be revocable. A worker who does not wish to sign an opt-out agreement must not be subjected to any detriment as a result. For workers under 18, the maximum working week is 40 hours. These hours may not be averaged out and no opt-out from the weekly limit is available to young workers. However, if no adult is available to do the work and the young worker’s training needs are not affected, he or she may work more than 40 hours if doing so is necessary to maintain continuity of service or production or in order to respond to a surge in customer demand.
The employer must keep an up-to-date list of adult workers who have agreed to work more than the 48 hours a week average and retain adequate records which show whether working time limits in general are being complied with. These must be kept for two years from the date they were made. There are additional record- keeping requirements relating to hours worked by young workers and where work involves special hazards or night work.
The Working Time Regulations also impose rules about workers’ rights to rest breaks, rest periods between working days and working at night. For further information, see http://www.businesslink.gov.uk/.
Don’t Get Angry With the Council!
A woman who became so incensed by the response of an anti-social behaviour coordinator working for Slough Council that she slammed her own phone down so hard that she broke it found herself on the Council’s ‘violent persons register’.
Jane Clift had seen a toddler, who was with a group of adults drinking in public, pulling up plants in a flowerbed. When she remonstrated with them, she was threatened. After telephoning the Council, she wrote a letter of complaint in which she admitted to being ‘filled with anger’, unwisely adding that she would have ‘physically attacked’ the Council employee if she had been close to her.
The result was that her name was emailed to more than 60 Council workers and community wardens as someone on the ‘violent persons register’. The same email was sent to another hundred people working in council-related organisations.
Ms Clift sued the Council for libel and claimed that the person circulating the email had acted maliciously. The Council argued that the email warning it had circulated was ‘substantially true’. The jury did not accept the Council’s argument as regards the libel, but accepted that the circulation of the email was not done maliciously. The Council’s argument that the email was covered by ‘qualified privilege’ (a defence which can apply when a person has a public or private legal, social or moral duty to circulate information to another individual with a duty to receive it) was also rejected – the email had been too widely circulated for this to apply.
Ms Clift was awarded £12,000 in damages.
Ignoring Court Demands is Costly
In litigation, it is common for the court to order the production of documents from the parties to the case. Failing to comply with such orders is unwise, as the court has the power to strike out (i.e. refuse to hear) a case unless the documents are produced. It will issue an ‘unless order’, which in simple terms states that unless the requested material is produced, the case will be struck out.
There are several criteria the court will apply when considering an application for relief against an unless order. These include considering whether the administration of justice will be served, whether the failure to supply the requested information is intentional and the extent to which the person has complied with other requests, orders etc.
In a recent case, the ex-husband of a woman failed to comply with an order of the court to produce documents and information relating to a property dispute. He applied for relief against the unless order and the case reached the Court of Appeal. One of the arguments employed was that striking out his claim because of non-compliance with the order would breach his human rights under Article 6 of the European Convention on Human Rights. His appeal was rejected.
Brethertons’ say:
“When disclosure of documents is required by the court, the demand must be treated seriously. Ultimately, failing to comply with the court’s rulings can result in your case simply being rejected.”
2010 Webinar Calendar
Brethertons launches the most detailed webinar calendar in conjunction with Association of Residential Property Managers (ARMA). If you have yet to participate in a webinar you will see that some of the events are totally free of charge, so you really have nothing to lose by participating in at least one. Our 2010 programme covers a wide range of subjects including:
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Understanding Residential Long Term Leases
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Disruptive Lessees
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Recovering Service Charges - Getting What's Due
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Asbestos - The Hidden Danger
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Insolvency – what to do when lessees and freeholders go bust
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LVT Update
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And many more
You do not have to be an ARMA Member to participate in these events.
To read more about the webinars and when they are due to take place please click on the link below which will open the booking form.
2010 Property Management Webinar Booking Form
