Where next for frognal court - by Roger Southam 

The approach to resolving the problems is getting all the parties on the same side of the table and working together. However, after a long period of division this will take time. Chainbow’s methodology is to assess at what stage the works have got to; work with Camden Council which issued the enforcement notices and deliver a phased programme of works to get the buildings in a state of good repair. Subsequent to the change of Appointed Manager to Chainbow chairman, Roger Southam, there was a further hearing at the LVT following the Upper Tribunal decision. This resulted in the conundrum as to whether to continue or not with proceedings. Either Bruce Maunder Taylor needs to continue as the Applicant or Mr Southam will need to take over as the Applicant. Mr Southam has no appetite to become the Applicant because it will not be of any use to Frognal Court and is not consistent with how Chainbow will manage the building forward.

Therefore, there is a problem facing all managers if an Upper Tribunal decision states that the LVT should look at the original case and consider affordability as a factor. This clearly leaves an unsatisfactory open-ended position. However, in the instance of Frognal Court, Chainbow does not believe pursing the matter is in the interests of the leaseholders or the freeholder.

Where this leaves property managers and the wider market is that at some point another case will occur which may try to utilise the Upper Tribunal’s decision and have affordability reflected in any service charge levels. The practical problems that would arise from this position would be immense. How can property managers carry out financial health checks on all leaseholders? The costs and burden of doing so will be immense and fees would have to rise substantially; which would not be well received in any quarter.

There is little political appetite to regulate property managers and give leaseholders the real safeguard they need, which means the property management industry could end up with a charter whereby the service charge commitment in the lease becomes a matter more akin to mortgage applications, benefit claims or grants.

Will the industry get to a position of means testing leaseholders for service charge demands?

Hopefully not but with an open-ended position anything is possible. At a time of financial uncertainty, every penny gets scrutinised and any tactic to play fast and loose becomes the order of the day. All the while the buildings still need managing and maintaining.

For freeholders and resident management companies the implications are horrendous and highlight the need to ensure that good advice and management is received to protect them from claims flooding in.