Setting up a Residents’ Association: The benefits of formal recognition and how to achieve it

Residents Associations are usually formed to represent the collective views of Leaseholders to the Landlord. Should issues arise with their Landlord/managing agent, Leaseholders will find strength in numbers. Here are some good guidelines for setting up a residents’ association.

What are the advantages to leaseholders?

Setting up a residents’ association can be done informally but a formally recognised Residents’ Association acquires additional legal rights.  The secretary of a recognised Association is entitled to:

• Ask the landlord for a summary of service charge costs incurred each year,
• Inspect accounts and receipts for the property in relation to service charge costs,
• Ask to be consulted on the appointment or re-appointment of a managing agent for the building,
• Appoint a surveyor to advise on any matter relating to service charges; The surveyor will have rights to see and copy supporting documents held by the landlord, to inspect common parts, and to appoint assistants,
• Be served with copies of any notices required under Section 20 consultation arrangements; and
• Nominate contractors and inspect any estimates/specifications

How does a Residents’ Association obtain formal recognition?

In one of two ways:

1. Write to the Landlord and request written recognition.
2. If the Landlord sends written confirmation that he has recognised the Residents’ Association then no further action need be taken.
3. If the Landlord refuses to recognise the Residents’ Association, then the group can apply for recognition to the nearest Rent Assessment Panel of the Residential Property Tribunal Service.

What criteria does the Residents Association have to meet to be granted formal recognition?

A landlord/Rent Assessment Panel usually require, as a minimum, that the group demonstrate the following:

• The rules of the Association should be fair and democratic
• Membership should be not less than 60% of those qualifying for the scheme
• Members must be paying a variable service charge to the landlord (i.e. tenants paying fixed rents/service charges will not qualify for membership; although they could be involved informally they are not entitled to vote)
• Only one vote per flat or home should be permitted
• No more than one association per building/block will be recognised, but more than one per scheme is acceptable for larger schemes with several blocks.

The Residents’ Association should submit the following documents when applying for recognition:

• a copy of the Association’s rules or constitution and elected members, and
• a list of subscribing members’ names and addresses.

For how long does formal recognition last?

A Rent Assessment Panel will usually grant a certificate of recognition for 4 years.  Landlords granting voluntary recognition will usually have a procedure in place for continuing recognition, such as requiring the Association to submit updated documentation annually.

What should be the approach of landlords?

Leaseholders have a legal right to establish a recognised Residents’ Association. It is good practice therefore for landlords/managing agents to encourage and co-operate with Residents’ Associations. It demonstrates transparency and accountability in management, and on a practical level, eases communication with leaseholders and reduces the duplication of messages.

Pembroke Property Management works with both formal and informal Residents Associations.  Often Residents Associations are a useful platform for Leaseholders who wish to exercise their collective Right to Manage the block(s) of flats.  Please contact us for further information and advice.