NHBC Sheltered Housng Code For Bulders and Developers regstered wth NHBC
Defntons Applcable to sheltered housng n England and Wales only Some of the words n these Rules have specal meanngs. They are prnted below n bold type and wth an ntal captal letter n the rest of these Rules. Where approprate n these Rules the Bulder or Developer s addressed as you. Applcaton for Inspecton An Applcaton made to NHBC for the nspecton and nsurance of a Home. Assocate Any Bulder or Developer who at any tme s subject to any substantal degree, whether drect or ndrect, to the same ownershp management nfluence or control as you. Bulder Any person, partnershp, company or organsaton whch constructs Homes. Common Parts In relaton to any flat or other premses Common Parts means: those parts of the buldng contanng the flat or premses; and any dranage system, permanent outbuldng, retanng wall, boundary wall, external hand ral or balustrade, path, drve, garden area or paved area whch serves that buldng, s wthn ts grounds and s constructed by the Bulder at the same tme as t for whch an Owner shares responsblty wth the owners of other flats or premses n the buldng. Damage Physcal Damage to the Home caused by a Defect. Defect A Defect n the Home resultng from a breach of any of NHBC s Requrements caused by the Bulder, hs archtect, engneer, subcontractor or some other agent employed by hm or actng on hs behalf. It does not mean a falure solely to comply wth the Requrements or gudance notes n the Requrements where the functonal tests are satsfed. Developer Any person, partnershp, company or organsaton that arranges for the constructon of Homes or s concerned n or wth such arrangements. Frst Owner or Frst Purchaser The person defned as ether the Frst Owner or Frst Purchaser n the relevant NHBC Scheme Document wth whom the Bulder or the Developer enters nto a contract or, n Scotland, a mssve, for the sale or constructon of a Home. 1
Hazardous Ste A Ste or any part of a Ste whch s n a condton whch gves rse to an abnormal rsk of damage to or defects n homes whch are or may be bult on t. It ncludes (but s not lmted to) a Ste whch n any part: v v v v s subject to landslp; s made-up ground; s part of a mnng area, whether past, current or contemplated; s of such a nature that the local authorty or an approved nspector has mposed specal condtons regardng foundatons; comprses clay sol whch has (or has had wthn the prevous fve years) trees on or near t; s lable to floodng; comprses sol wth a peat content n the ground; v s adversely affected by the chemcal content of the ground; or x Home s affected by landfll gas or radon. The house, bungalow, flat or other premses referred to n any Buldmark Scheme Document together wth the Common Parts (f any), the dranage system for whch the Owner or Purchaser s responsble and: any heatng, ar condtonng, smoke alarm or water softenng equpment n that house, bungalow, flat or premses; and any garage, permanent outbuldng, retanng wall, boundary wall, external handral, or balustrade, path, drve, garden area or paved area bult, sold or suppled under the orgnal sale contract or buldng contract between the Bulder and the Frst Owner or Frst Purchaser. Home does not nclude any fence, temporary structure, swmmng pool, lft, or any electrcal, electronc or mechancal equpment (whether bult n or not) other than the tems lsted n () above. In Scotland, n addton, t does not nclude any road, footpath or footway. Management Organsaton Any person or body ntended to be responsble for the management, mantenance, repar or renewal of a Sheltered Dwellng or of any communal facltes assocated wth t or for provdng servces or facltes to the resdents of the Sheltered Dwellng n ther capacty as resdents, whether or not those servces or facltes are related to the care of the resdents. 2
Defntons Applcable to sheltered housng n England and Wales only NHBC The Natonal House-Buldng Councl (a company lmted by guarantee) havng ts regstered offce at Buldmark House, Chltern Avenue, Amersham, Bucknghamshre, HP6 5AP. NHBC s Requrements The mandatory requrements n connecton wth buldng and assocated matters adopted by NHBC and n force: - when the concretng of the foundatons of a newly bult Home or f applcable, the Common Parts s begun - when converson or renovaton work to or affectng the Home or, f approprate, the Common Parts s started, whch ever s applcable. NHBC Scheme Document Any document (ncludng a Notce of Cover) ssued by NHBC or ts subsdary companes n connecton wth a Home covered by one of ts schemes. NHBC Sheltered Housng Code The NHBC Sheltered Housng Code adopted by NHBC and n force when concretng of the foundatons of the Home and ts Common Parts (f applcable) s begun. The Sheltered Housng Code s not mandatory n Scotland. Notce of Cover a Notce or certfcate statng that a Home appears to have been desgned and constructed substantally n accordance wth NHBC s Requrements; or a Notce or certfcate statng that work to a Home appears to have been carred out n a satsfactory manner; or a Fnal Certfcate ssued under the Buldng Act 1984. (Ths Act does not apply n Scotland, Northern Ireland or the Isle of Man). Other Home Warranty Scheme Any Home warranty scheme whch ncorporates: a b c a regster of bulders and developers on whch applcants may be entered provded they can show a good standard of buldng ablty and sound busness knowledge as applcable; and a set of publshed techncal standards wth whch regstered bulders and developers must comply and whch nclude reasonable standards of desgn, qualty of materals, workmanshp and durablty; and a system of nspectng new homes durng constructon so as to ensure that they are bult n accordance wth the publshed techncal standards; and 3
d transferable warrantes whch provde the owners of homes covered by the scheme wth a rght, for at least ten years from the date of completon of constructon of the Home, to have repars carred out or to an ndemnty aganst the cost of repars, at least n respect of damage resultng from defects n the Structure of such homes. Owner The Frst Owner or Frst Purchaser and each subsequent Owner or Purchaser of the Home specfed n the relevant NHBC Scheme Document. The Owner or Purchaser ncludes any mortgagee, or hertable credtor n possesson of the Home pursuant to a mortgage granted as securty for a loan to the Frst Owner or Frst Purchaser or to any such subsequent Owner or Purchaser. Regster The Regsters of Bulders and Developers mantaned by NHBC n England and Wales, Scotland, Northern Ireland and the Isle of Man respectvely. Regstraton The entry of a Bulder or Developer on the Regster. Sheltered Dwellng A dwellng whch s purpose bult or converted for resdence by elderly people and whch forms part of a scheme of grouped, self-contaned accommodaton provded wth a package of estate management servces. Ste An area of land whch s covered by a sngle detaled plannng consent. Structure The foundatons of the house, bungalow, flat or premses and of any garage or permanent outbuldng and the structural loadbearng parts of ts floors, walls and roof together wth any retanng walls necessary for ts stablty. Structure ncludes the foundatons and any structural loadbearng parts of any Common Parts. 4
Contents Defntons 1 Part 1 The dutes of Bulders and Developers of Sheltered Housng 8 Part 2 The Purchaser s Informaton Pack 9 Form 9 Extra copes 9 Landlord and Management Organsatons 9 Purchaser s legal rghts 10 Consultaton and complants procedures 11 Charges and servce charges 12 Servces 13 Warden 13 Alarm system 13 Repars 13 Insurance 14 Re-sale 14 Part 3 The Management Agreement 15 Partes to the agreement 15 Form of agreement 15 Vendor s undertakngs 15 Descrpton of Vendor s undertakngs 15 Transfer of Vendor s nterest or management responsblty 18 Management Organsaton s undertakngs 19 Purchaser s nformaton pack 19 5
Budgets and accounts 19 Resdents assocaton and consultaton 20 Complants 20 Servces 21 Wardens 21 Emergency alarm system 22 Insurance 22 Repars and mantenance 23 Re-sale 23 Transfer of management 25 Part 4 Your Legal Rghts 27 Introducton 27 Tenants or Resdents Assocatons 28 Servce charges 28 Protecton of money pad for servces 29 Insurance 30 Your rght to be consulted about repar works 31 Your rghts f the landlord fals to carry out hs oblgatons to provde servces 31 Your rghts to nformaton about your landlord 32 Your rghts to frst refusal upon transfer of freehold 32 Management Organsatons when actng as managers for a Landlord 32 Your ndvdual rghts as a Lessee 33 Part 5 Rule for Sheltered Housng 34 6
7 Resdents lounge, courtesy McCarthy & Stone
The dutes of Bulders and Developers of sheltered housng PART 1 1. Every Bulder or Developer regstered wth NHBC who bulds or sells a Sheltered Dwellng must: ensure that every potental Frst Purchaser of the Sheltered Dwellng s provded wth a Purchaser s Informaton Pack whch contans the nformaton specfed n ths Code; the Purchaser s Informaton Pack must be provded when the Purchaser reserves the Dwellng and n good tme so that the Frst Purchaser can properly consder the nformaton whch t contans before exchangng contracts to purchase the Dwellng; ensure that the Management Organsaton of a Sheltered Dwellng bult or sold by hm enters nto a Management Agreement as requred by ths Code. The Management Agreement must gve each Purchaser of the Sheltered Dwellng the beneft of the legal rghts specfed n ths Code. 2. If the freehold or leasehold of the Sheltered Dwellng s sold or transferred to anyone who s actng n the course of a busness, the NHBC Bulder or Developer who bult or sold or transferred the Sheltered Dwellng must obtan from that person a covenant by whch that person undertakes: that a Purchaser s Informaton Pack wll be provded to the Frst Purchaser as requred n (1) above; that the Management Organsaton of the Sheltered Dwellng wll enter nto a Management Agreement as requred n (1) above; and that these covenants wll be obtaned on any further sale or transfer. 8
The Purchaser s Informaton Pack PART 2 Form 1. The Purchaser s Informaton Pack must be gven to Purchasers n a form that can be retaned by them for easy reference at any tme. 2. The Purchaser s Informaton Pack must be clear and unambguously wrtten n smple Englsh and n large enough prnt to be easly read even by those wth lmted sght. Extra copy for resdents 3. Where the Purchaser and the resdent of the Sheltered Dwellng are not the same an addtonal copy of the Purchaser s Informaton Pack must be provded for the use of the resdent. In that case the Purchaser must tell the Management Organsaton who the resdent wll be. Copes for subsequent purchasers 4. A Landlord or Management Organsaton whch receves notce of a sale or assgnment of a Sheltered Dwellng by a Purchaser must provde an up-to-date copy of the Purchaser s Informaton Pack to the subsequent Purchaser or assgnee. Ths copy should be provded, f possble, before the sale or assgnment s made. Mnmum contents 5. The Purchaser s Informaton Pack must contan at least the followng: The Landlord and the Management Organsaton 5.1 Where the Sheltered Dwellng s sold leasehold, the name and address of the Landlord and of the freeholder, f dfferent. 9
5.2 The name, address and telephone number of the head offce and the relevant local branch offce of the Management Organsaton. 5.3 Detals of the relatonshp between the Landlord and the Management Organsaton and n partcular whether the Management Organsaton s a party to the lease. 5.4 An undertakng by the Management Organsaton that t wll enter nto a bndng legal oblgaton wth each Purchaser of a Sheltered Dwellng to perform the undertakngs n ths Code. 5.5 Informaton on the nature of the Management Organsaton (e.g. whether t s a Housng Assocaton or a Prvate Management Company), on ts hstory, and on the number of Sheltered Homes t currently manages. The Purchaser s legal rghts 5.6 Informaton on the Purchaser s legal rghts followng the form set out n the attached Schedule. 5.7 A summary of the man provsons of any lease of the Sheltered Dwellng. Ths must nclude detals of: v v v v ground rent; any charges on resale; any charges for management servces (whether perodc, rregular or one-off); servces; communal facltes; any restrctons on occupaton of the Sheltered Dwellng (ncludng any requrements whch relate to age of occupant); any restrcton on resdents (ncludng any restrctons as to the keepng of pets). 10
5.8 Where the Frst Purchaser purchases a freehold nterest n the Sheltered Dwellng, a summary of the man provsons of the freehold transfer, ncludng detals of all covenants conferrng rghts or mposng restrctons upon the Purchaser or resdent. Consultaton and complants procedures 5.9 Informaton on Resdents Assocatons, and the arrangements made by the Landlord and Management Organsaton for the recognton of a Resdents Assocaton and for consultaton wth t. 5.10 Informaton on the matters about whch Purchasers have the rght to be consulted by the Landlord and the Management Organsaton, and how such consultaton s to take place: v Each Purchaser must have the rght to be consulted on major ssues of housng and estate management; Each Purchaser must be provded wth a copy of the accounts for management servces, audted by an ndependent accountant, wthn no more than sx months of the end of each accountng perod; Each Purchaser must be provded wth a copy of the proposed budget for the management servces for the ensurng fnancal perod and be gven reasonable opportunty to comment on t before the revew date of any charge; The consultaton arrangements must nclude at least one annual meetng of all Purchasers pror to the annual revew of servce charges to enable Purchasers to comment on the budget for the next accountng year and the extent and qualty of servces provded; a reasonable perod of notce must be gven to all Purchasers of ths annual meetng. 5.11 The complants and grevance procedure of the Management Organsaton, whch must contan a tmetable for acton on complants made by Purchasers or resdents. 11
Charges and servce charges 5.12 A full and detaled analyss of all payments, fees or charges (whether perodc or not) to whch the Purchaser may become lable to the Landlord or to the Management Organsaton, together wth: v v v v v x a full explanaton of the reasons for the payments, fees and charges; a full explanaton of how all servces are to be charged for and how they are apportoned between Dwellngs; a full explanaton of the snkng fund, how t wll be funded and the uses to whch t wll be put; an estmate of the amount of all the antcpated payments, fees and charges (ncludng the cost of audtors) for the current year of accountng, broken down nto clearly defned budget tems, and wth a clear ndcaton of the perod to whch each tem relates; how the payments, fees and charges and any contrbuton to any snkng fund are to be collected; how frequently the payments, fees and charges are to be collected; how frequently the level of payments, fees and charges s to be revewed; how such revew s to be conducted, and what consultaton wth Purchasers wll be nvolved n such a revew; a full explanaton of how any defct or surplus on any account wll be treated, and n partcular how any defct wll be made up. 5.13 Informaton on the Purchaser s responsblty for other charges, not payable to the Landlord or Management Organsaton (ncludng any responsblty for rates, water rates or charges, communty charges, electrcty, gas etc). 12
The Purchaser s Informaton Pack Servces Warden 5.14 A full and clear explanaton of all the servces and the management facltes provded by the Management Organsaton; ncludng: detals of the extent to whch cleanng and gardenng servces are to be provded by the Management Organsaton; and detals of the avalablty of any guest room and the chargng system whch s to apply to t. 5.15 Where a Warden s to be provded, a defnton of the Warden s role and dutes; and: Alarm system Repars detals of the Warden s hours of servce; detals of back-up or emergency cover durng the Warden s absence; nformaton as to whether the Warden s communty charge, heatng, telephone, electrcty and other blls are to be charged to Purchasers. 5.16 An alarm montorng system must be provded and there must be a full descrpton of the system, wth detals of ts nature, extent and cost. 5.17 A full, clear and detaled explanaton of the dvson of responsbltes between the Landlord, the Management Organsaton and the Purchaser or resdent for mantenance and repar of the buldngs, fxtures and grounds. 5.18 The repars reportng procedure settng out how and to whom the Purchaser or resdent can report the need for mantenance and repar work to the buldngs and grounds; ths must nclude a procedure for reportng the need both for emergency and for non-emergency repars. 13
Insurance 5.19 Detals of the Insurance Cover arranged through the Landlord or Management Organsaton. Ths Insurance Cover must nclude: v buldngs nsurance (ncludng the cost of provdng sutable alternatve accommodaton for the resdents); engneerng plant nsurance (eg lft and ventlaton equpment); employer s lablty and publc lablty nsurance; communal contents nsurance (eg Resdents Lounge and Guest Room furnture). Where ths Insurance Cover does not extend to nsurng the effects of Purchasers and/or resdents ths should be made clear n the Purchaser s Informaton Pack and advce ncluded that such nsurance should be separately obtaned. The Purchaser must be enttled free of charge to nspect the Landlord s polcy for the buldngs and proof of payment of the nsurance premums; nformaton must be ncluded as to ths rght and how the Purchaser may exercse t. Re-sellng the Sheltered Home 5.20 The rghts and oblgatons of Purchasers of the Sheltered Dwellng n relaton to re-sellng ther Dwellng. In partcular: any restrcton on re-sale whch relates to the age or other qualfcatons of potental subsequent Purchasers or subsequent resdents must be clearly set out; and f the Landlord or Management Organsaton makes any charge or requres any payment upon re-sale (ncludng any requrements to make a contrbuton to a snkng fund), the charge or payment and ts estmated amount must be clearly set out n wrtng and provded to all Purchasers. 14
The Management Agreement PART 3 Partes 1. Where the Vendor of the Sheltered Dwellng to the Frst Purchaser s not also to be the Management Organsaton: The partes to the Management Agreement shall be the Vendor and the Management Organsaton. The Management Agreement must be entered nto before the Frst Purchaser exchanges contracts to purchase the Dwellng. 2. Where the Vendor of the Sheltered Dwellng to the Frst Purchaser s also to be the Management Organsaton: The partes to the Management Agreement shall be the Vendor and the Frst Purchaser. The Management Agreement must be entered nto at the same tme as the Frst Purchaser exchanges contracts to purchase the Dwellng. Form 3. The Management Agreement shall be a wrtten legal agreement. The undertakngs by the Vendor of the Sheltered Dwellng 4. The Management Agreement must contan an undertakng by the Vendor or the Sheltered Dwellng to requre the Management Organsaton to enter nto a bndng legal oblgaton wth each Purchaser of the Sheltered Dwellng to perform the undertakngs n ths Code. 15
The Vendor s undertakngs must nclude undertakngs that: 4.1 All sales lterature provded to Frst Purchasers nsofar as t ncludes or refers to tems covered by ths Code must set out those tems n full or be an accurate summary of them. 4.2 The requrements of the NHBC Sheltered Housng Code as to the provson of a Purchaser s Informaton Pack wll be or have been compled wth. 4.3 All oblgatons undertakngs and assurances contaned n the Purchaser s Informaton Pack wll be duly honoured, and the Purchaser s Informaton Pack wll contan all oblgatory undertakngs requred n Part 2 of ths Code. In partcular: v v v v an alarm montorng system wll be provded; the Insurance Cover descrbed n the Purchaser s Informaton Pack wll be provded; the consultaton, complants and grevance procedures contaned n the Purchaser s Informaton Pack wll be operated; the detals gven n the Purchaser s Informaton Pack relatng to charges, servce charges and payments wll be compled wth; the servces and management facltes descrbed n the Purchaser s Informaton Pack wll be provded (ncludng Wardenng servce as so descrbed); the detals gven n the Purchaser s Informaton Pack relatng to repars wll be compled wth; a snkng fund wll be set up on or before the frst sale of the frst Dwellng n the Sheltered Housng Scheme. The fund wll be adequate for and be used to fnance long term repars, renewals and mprovements; 4.4 The Purchaser s Informaton Pack wll be kept up-to-date and copes of the Purchaser s Informaton Pack as up-dated wll be ssued to all Purchasers. 16
The Management Agreement 4.5 No contrbuton wll be sought from Purchasers or resdents for meetng servce charges attrbutable to unsold or vod unts of the Sheltered Dwellng scheme pror to ther frst sale. 4.6 On notfcaton of any assgnment or transfer of a Purchaser s nterest n the Sheltered Dwellng, potental Purchasers of that nterest wll be ssued by the landlord wth a copy of the current Purchaser s Informaton Pack. 4.7 No condton on re-sale whch allows only the landlord to fnd new Purchasers wll be obtaned from or enforced aganst a Purchaser. The provson wll not apply to schemes for elderly people bult wth the ad of any publc fundng ntended to reduce the purchase prce to purchasers. In that case the new purchasers may be lmted to those meetng the crtera requred as a condton of that publc fundng. 4.8 All charges whch the landlord makes on re-sale wll be clearly temsed and any legal servce provded by the landlord on re-sale wll be clearly descrbed n wrtng to the Purchaser before the Purchaser utlses such servce. 4.9 The landlord wll not make any charge or requre any payment on a re-sale, except: v v for actng as an agent to sell the Sheltered Dwellng, when the seller has chosen to employ ts servces; for legal servces provded at the request of the seller: for supplyng Purchaser s Informaton Packs to prospectve Purchaser s; the reasonable costs t has ncurred n: a b approvng a buyer; supplyng copes of nsurance detals and servces accounts to the seller s solctor; Any arrears of servce charge or of ground rent or of other 17
v v outgongs whch are provded for n the lease and whch are outstandng at the date of sale. Any costs of nternal decoratons or repars whch are necessary at the date of sale because of the seller s falure to comply wth oblgatons contaned n the lease. As permtted by paragraph 4.10 below. 4.10 No share n the equty or equty growth of any Sheltered Dwellng has been or wll be retaned or clamed by the Vendor or on ts behalf and no rght to a share n the equty or equty growth wll be enforced by the Vendor or on ts behalf. Except where the lease or contract of sale provdes: for a fxed deducton on re-sale to fnance long-term repars, renewals and mprovements to the Sheltered Dwellng Scheme from a snkng fund; for a fxed deducton on re-sale as part of a bona fde scheme to provde a Purchaser or resdent wth: a b c d extra care; or reduced servce charges; or provson of ncome; or some other tangble beneft; for a defned share of the equty to be retaned on re-sale where the Sheltered Dwellng was orgnally sold at a dscounted prce. Transfer of Vendor s nterest or management responsblty 4.11 The Vendor undertakes not to transfer the freehold nterest n the Sheltered Dwellng Scheme or any Sheltered Dwellng (or any leasehold nterest n these to anyone who s actng n the course of a busness) wthout ensurng that before the transfer s completed the transferee has entered nto a Management Agreement of dentcal content wth ths Part (ncludng ths undertakng). 18
The Management Agreement The Transferee s Management Agreement must be ether: wth the Management Organsaton; or (f the transfer s to the Management Organsaton) wth the Purchaser of each Sheltered Dwellng who holds at the date of transfer the nterest of the Frst Purchaser. 4.12 The Vendor undertakes that f the Management Organsaton transfers or repudates ts Undertakngs under ths Management Agreement the Vendor wll enter nto a new Management Agreement as soon as possble wth a new Management Organsaton of dentcal content so far as t s possble or where not possble of substantally the same content (ncludng ths oblgaton). Undertakngs by the Management Organsaton of the Sheltered Dwellng 5. The Management Agreement must contan an undertakng by the Management Organsaton of the Sheltered Dwellng to enter nto a bndng legal oblgaton wth each Purchaser of a Sheltered Dwellng to perform the undertakngs n ths Code. The undertakngs of the Management Organsaton must nclude undertakngs that: Purchaser s Informaton Pack 5.1 All sales lterature provded to Frst Purchasers s an accurate summary of that requred by the NHBC Sheltered Housng Code. 5.2 The requrements of the NHBC Sheltered Housng Code as to the provson of a Purchaser s Informaton Pack to the Frst Purchaser of the Sheltered Dwellng and as to the form and contents of the Purchaser s Informaton Pack wll be or have been compled wth. Budgets, revew of charges, accounts 5.3 The Management Organsaton wll each year draw up a proposed budget wth estmates of all charges to be leved on Purchasers by the 19
Management Organsaton and the Landlord; the Management Organsaton wll be responsble for ensurng that the proposed budget contans realstc estmates of charges based on all current evdence reasonably avalable. 5.4 A copy of the proposed budget, clearly ndcatng the perod coverng by the budget, wll be made avalable to each Purchaser n reasonable tme for each Purchaser to comment on t before the Management Organsaton undertakes ts annual revew of charges; the Management Organsaton wll take reasonable account of all comments made by Purchasers and wll advse Purchasers of the outcome of ths consultaton. 5.5 The Management Organsaton wll hold at least one meetng each year wth Purchasers pror to the annual revew of servce charges gvng reasonable opportunty for Purchasers to comment on the proposed level of charges. 5.6 The Management Organsaton wll provde all Purchasers wth a copy of the accounts for management servces audted by an ndependent accountant wthn sx months of the end of each accountng perod. Resdents Assocaton and consultaton Complants 5.7 The Management Organsaton wll recognse an assocaton whch has as ts members 51% or more of the Purchasers of the Sheltered Dwellngs ncluded n the Sheltered Dwellng scheme, and wll encourage such an assocaton to accept nto membershp all those who resde n the Sheltered Dwellngs. 5.8 The Management Organsaton wll consult all Purchasers and resdents on all major management proposals lkely to have a sgnfcant effect on qualty of servce or level of servce charges. 5.9 The Management Organsaton wll mplement and operate the complants and grevance Procedure set out n the Purchaser s Informaton Pack. 20
The Management Agreement Servces Wardens 5.10 The Management Organsaton wll provde all the servces descrbed n the Purchaser s Informaton Pack. 5.11 The Management Organsaton wll comply wth all the specfcatons contaned n the Purchaser s Informaton Pack as to the nature and qualty and costng of all servces descrbed n the pack. 5.12 the Management Organsaton wll arrange for the regular cleanng of all nternal common parts of buldngs contaned wthn the Sheltered Dwellng scheme, for the regular sweepng and cleanng of all external hard servces, ncludng paths, drveways and car parkng areas; for the clearance of fallen leaves from gutterng and for the mantenance of contnuous safe access on paths, parkng areas and drveways, ncludng the treatment of surface ce and the removal of fallen leaves. 5.13 the Management Organsaton wll mantan the shared garden areas to a standard consstent wth the qualty of the development. 5.14 where a resdents lounge or guest room s provded, the Management Organsaton wll ensure that the furnture, fttngs and decoratons are cleaned and renewed. 5.15 where a common laundry s provded the Management Organsaton wll arrange for the mantenance and repar of all machnes. 5.16 where a payphone s provded the Management Organsaton wll arrange for ts mantenance and for the collecton and secure accountng of all mones. 5.17 Where a Warden s provded, the Management Organsaton wll: make thorough enqures nto the character, employment hstory and background of any prospectve Warden or Deputy Warden or relef or stand-by Warden before employng the same, and wll satsfy tself that the person so employed s honest and trustworthy; 21
v provde any Warden or Deputy Warden or relef or standby Warden wth full and proper management supervson and back-up support; ensure that the role, responsbltes and dutes of any Warden or Deputy Warden or relef or stand-by Warden are clearly defned and that Purchasers are made aware of the same, and that any Warden or Deputy Warden s provded wth a properly defned job descrpton, and wth a handbook gvng detals of ther dutes and all relevant procedures; ensure that any Warden or Deputy Warden or relef or stand-by Warden receves proper tranng. The Emergency alarm system Insurance 5.18 The Management Organsaton wll mantan any emergency alarm system as specfed n the Purchaser s Informaton Pack and wll provde all Purchasers and resdents wth a full descrpton of the system and ts operaton. 5.19 The Management Organsaton wll be responsble for mantanng adequate nsurance cover as set out n the Purchaser s Informaton Pack. 5.20 The Management Organsaton wll be responsble for ensurng that all such nsurance cover s arranged at the best value n the nterests of the Purchasers, and that an annual revew s made of the extent of cover and the level of premums. 5.21 The Management Organsaton wll be responsble for ensurng that all such nsurance cover s arranged at the best value n the nterests of the Purchasers, and that an annual revew s made of the extent of cover and the level of premums. 5.22 The Management Organsaton wll be responsble for ensurng that any Purchaser who wshes to nspect the nsurance polces or the proof of payment of premums s enabled to do so free of charge. 22
The Management Agreement Repars and mantenance Re-sale 5.23 The Management Organsaton wll be responsble for undertakng and arrangng all repars for whch t s specfed to be responsble n the Purchaser s Informaton Pack. 5.24 The Management Organsaton wll ensure n the dscharge of ts responsblty for repars that all repar work s cost-effectve takng nto account both the cost of the work undertaken and ts durablty. 5.25 The Management Organsaton wll draw up and mplement an adequate programme of planned or cyclcal mantenance for communal parts of the Sheltered Dwellng scheme together wll all plant and servces that requre regular mantenance (ncludng the mantenance and replacement when necessary of communal furnture and fttngs). The Management Organsaton wll make a realstc assessment of the cost of that programme and nclude an approprate tem n the proposed annual budget and consult the Purchasers about ths tem. 5.26 The Management Organsaton wll undertake all necessary major repars and renewals to the buldngs contaned n the Sheltered Housng scheme to ensure that the scheme s kept up to a reasonable standard of repar and decoraton. The Management Organsaton wll mantan the snkng fund to defray the cost of performng ths undertakng. 5.27 The Management Organsaton wll operate the repars procedures set out n the Purchaser s Informaton Pack (ncludng the procedure for emergency repars); and wll montor the progress of repars. 5.28 All charges on-sale made by the Management Organsaton wll be clearly temsed; 23
5.29 The Management Organsaton wll not n any way mpede or prevent a Purchaser makng ndependent arrangements for the re-sale of a Sheltered Dwellng. Ths provson wll not apply to schemes for elderly people bult wth the ad of any publc fundng ntended to reduce the purchase prce to purchasers. In that case the new purchasers may be lmted to those meetng the crtera requred as a condton of that publc fundng; 5.30 The Management Organsaton wll not make any charge or requre any payment on re-sale except for reasonable charges for payments where the lease provdes n the followng cases: v v v v for actng as an agent to sell the Sheltered Dwellng, when the seller has chosen to employ ts servces; for legal servces provded at the request of the seller; for supplyng Purchaser s Informaton Packs to prospectve purchasers; to recover the cost t has ncurred n: a b approvng a buyer; supplyng copes of nsurance detals and servce accounts to the seller s solctor; to recover any arrears of servce charge or of ground rent or of other outgongs whch are provded for n the lease and whch are outstandng up untl the date of sale; to recover any costs of nternal decoratons or repars whch are necessary at the date of the sale because of the seller s falure to comply wth oblgatons contaned n the lease; as provded for n sub-paragraph (5.31) below. 5.31 No share n the equty or equty growth of any Sheltered Dwellng has been or wll be retaned or clamed by the Management Organsaton or on ts behalf and no rght to a share n the equty or equty growth wll be enforced by the Management Organsaton or on ts behalf. 24
The Management Agreement Except where the lease or contract of sale provdes: for a fxed deducton on re-sale to fnance long-term repars, renewals and mprovements to the Sheltered Dwellng Scheme from a snkng fund; for a fxed deducton on re-sale as part of a bona fde scheme to provde a Purchaser or resdent wth: a b c d extra care; or reduced servce charges; or provson of ncome, or some other tangble beneft; for a defned share of the equty to be retaned on re-sale where the Sheltered Dwellng was orgnally sold at a dscounted prce n order to enable the Purchaser to partcpate n a Sheltered Dwellng Scheme that the Purchaser would not, wthout the dscount, have been able to buy nto. Transfer of management responsblty 5.32 The Management Organsaton undertakes that f t transfers management responsblty t wll ensure that an alternatve Management Organsaton enters nto a Management Agreement of dentcal content so far as t s possble or where not possble of substantally the same content (ncludng ths oblgaton). 25
Resdent s bedroom, courtesy McCarthy & Stone 26
Your legal rghts PART 4 Schedule Ths document must clearly set out the name and address of the freeholder who s the landlord, and must also gve the name of the Management Organsaton, f ths s not one and the same. In ths document t s assumed that the Management Organsaton s the owner of the freehold. The document descrbes the rghts of lessees and the oblgatons of landlords. Normally the Management Organsaton lookng after the development from day-to-day wll be the landlord, but sometmes the Management Organsaton may be runnng the scheme on behalf of the Bulder or Developer who developed t. The document should contan the detals below Introducton The home you occupy s owned on a long lease (eg 99 years) whch termnates n. The freehold of the property s owned by XYZ. The Management Organsaton whether or not the owner of the freehold has drect responsblty for managng the scheme of whch your home s part. Ths document sets out your legal rghts as the lessee of your home. If you occupy your home but someone else owns the lease (perhaps someone else n your famly), t s they who have the legal rghts. However, the managers of the scheme have agreed to gve the same nformaton to occupers as to owners and to allow non-ownng occupers to partcpate n the same way as owners. The law coverng leaseholds changes and ths document only sets out a very bref summary. It s not ntended to be detaled but only to gve a very bref dea of what the law requres or entals. If you thnk that you need to know the law n detal you should consult a solctor or Ctzens Advce Bureau. 27
Tenants or Resdents Assocatons You and your fellow lessees have the rght to form a Tenants Assocaton. The law gves greater consultaton rghts to recognsed Tenants Assocaton than to ndvdual lessees on certan ssues. If a Tenants Assocaton wshes to be recognsed or accepted by the landlord and consulted on matters such as expendture on major repars, t must apply to the landlord. If the landlord refuses to recognse such an Assocaton then t may be able to seek recognton under statutory procedures. A solctor or Ctzens Advce Bureau wll be able to assst. Servce charges Your landlord provdes a range of servces for whch you pay through a servce charge. There may be other addtonal perodc charges for whch you wll also pay. The law defnes a servce charge as any amount payable n addton to ground rent, or as part of that rent, n respect of servces, repars, mantenance, nsurance or management costs and whch vares accordng to the changes n cost n respect of those matters. It does not matter whether the charge s made as part of the rent or n any other fashon, the law controls the way n whch servce charges are rased and how they must be used. A snkng fund (to fnance long term repars, renewals and mprovements) may be rased by contrbutons or by makng a levy on the re-sale prce of the Dwellng when t s sold. No more can be taken than s provded for by the formula wrtten nto the lease, and the money can only be used for the purpose specfed by the lease. Where such a levy apples to your Dwellng ts exstence wll have been made clear n your lease and n the pre-sales lterature. A servce charge can only be demanded for the tems whch are specfed n the lease. 28
Your legal rghts Protecton of money pad for servces Any money whch you pay n advance as a servce charge s protected, as landlords have to hold money on trust *. Ths means that the landlord can only spend the money for the purposes for whch t was collected. If the landlord becomes nsolvent the money held n trust s safe from other credtors. The trust prevals over any terms of a lease whch are nconsstent wth t. In practce any money pad by resdents as servce charges should be kept n a separate bank account n trust for those contrbutng to t and any nterest receved on the account should be credted for the beneft of them after deducton of tax. Servce charges need only be pad f they are reasonable and only f the works or servces provded are of a reasonable standard. However, only a County Court can determne what s reasonable Legal acton should only be taken as a last resort after resdents have sought to challenge the servce charge n a meetng wth the landlord. Your landlord should have consulted you about any large ncrease n the servce charge he proposes to make. If you want to queston or challenge servce charges you the rght to obtan detals of costs of servces and charges and to nspect and take copes of accounts and recepts. The landlord has the rght to make a reasonable charge for the copyng. Lessees have the rght to demand from ther landlord: A summary of the costs of servces provded for the last accounts perod splt nto: costs for whch the landlord has not yet receved an nvoce costs for whch the landlord has receved an nvoce but has not yet pad costs for whch the landlord has pad the bll. The frst two categores should make you aware of lkely future costs and so prevent landlords later presentng unexpected blls for costs ncurred n prevous years. The summary of cost should: show how the costs are reflected n the servce charge show the total amount of money receved from lessees on account and the amount stll standng n credt to resdents 29 *Regstered Housng Assocatons are exempt from ths requrement.
be sgned by a qualfed accountant who s not a partner or employee of the landlord or Management Organsaton. If you need more detals you have the rght to ask for an nspecton of all accounts, recepts and documents relatng to the summary of costs of servces you receved and to take copes, for whch a reasonable charge may be made. You can refuse to pay the cost of any servce ncurred 18 months before a demand for payment was made, unless the landlord had already notfed you n wrtng that the costs had been ncurred and that resdents would be expected to pay. Insurance Where the landlord arranges some nsurance as part of the servce charge on behalf of lessees, the costs must be reasonable as wth any other servce charge. Any lessee or a recognsed Tenants Assocaton can also request detals of the nsurance polcy from the landlord. Wthn one month the landlord must supply a copy of the polcy, or a summary, and must state the amount nsured and the name of the nsured. Falure to produce ths nformaton can lead to prosecuton. Lessees who have asked for detals of the polcy have a further rght to nspect the polcy and a recept of proof of payment of the premum. Resdents have the rght to take copes for whch the landlord may make a reasonable charge. Fnally, lessees have the rght to notfy the landlord s nsurers of a possble clam up to sx months after the event whch has led to the clam, even f there s a shorter tme lmt for makng clams n the polcy. Ths does not mean that a resdent may make a clam on a polcy, but t does mean that the clam does not fal because the landlord has faled to satsfy the nsurers n tme. Where, however, a lease requres the lessee to nsure the Dwellng wth an nsurance company nomnated by the landlord, and the nsurance avalable s unsatsfactory n any way or the premum s excessve, the County Court has power to deal wth the problem. 30
Your legal rghts Your rght to be consulted about repar works Lessees have the rght to be consulted by landlord before major repar works (of 1000 or 50 per Dwellng, whchever s greater) are carred out. A landlord must get at lease two estmates for major works, one of whch should be from a contractor wholly unconnected wth hm. A notce accompaned by copes of the estmates should be sent by the landlord EITHER to all lessees OR dsplayed n a promnent place whch wll brng t to the attenton of all lessees. You have one month (28 days) from recept of the notce to make comments and the landlord must take account of them. If lessees are not consulted about the cost of major repar works then they have the rght to refuse to pay part of those costs. Recognsed Tenants Assocatons have greater rghts n law to be consulted than ndvdual lessees. If a landlord wshes to carry out major repar works he must send to the secretary of the Tenants Assocaton a specfcaton of the proposed works and allow a reasonable tme for the secretary to prepare names of contractors from whom he should obtan estmates. A copy of any estmates receved should be sent to the secretary. In addton, all lessees who are members of the Tenants Assocaton should be sent a notce descrbng the works, summarsng the estmates and nvtng comments. Your rghts f the landlord fals to carry out hs oblgatons to provde servces If a landlord has serously or consstently faled to carry out hs oblgatons to carry out repars, any lessee has the rght to ask a County Court to ssue an order compellng the landlord to do the repar. If lessees do go to Court (because they are unable to reach agreement wth ther landlord about a servce or a servce charge) and the lessees wn, the law may prevent the landlord from re-chargng hs legal costs as part of any management fees to the resdents and, agan, the County Court wll normally deal wth such matters. If the landlord s a regstered Housng Assocaton the rghts set out below n ths secton do not apply. If the landlord persstently fals to meet hs oblgatons, then lessees of flats only have the rght to apply to County Court for an order to appont another manager 31
(or a recever f the landlord s nsolvent). However, lessees should serve notce on the landlord, pror to gong to Court, statng what s wrong and gvng the landlord reasonable tme to put thngs rght. In extreme cases where the landlord has consstently faled to meet hs oblgatons, and the appontment of another manager would not be a suffcent remedy, a Court may order the compulsory transfer of the landlord s nterest n a group of flats to someone else acceptable to the lessees. Your rghts to nformaton about your landlord If a lessee puts n a wrtten request, the Management Organsaton must supply the name and address of the landlord wthn 21 days. If the landlord s a company then a lessee has the rght to know the name and address of the drectors and secretary of the company. In addton a lessee of a Dwellng has the rght to make a search at the Land Regstry to fnd the name of the freeholder of the flat. If there s a change of landlord then the new landlord must nform lessees of hs name and address. Your rghts to frst refusal upon transfer of freehold If a landlord proposes to sell the freehold of flats then he must notfy lessees. Lessees have the rght to frst refusal to purchase the freehold. Ths rght does not apply f your landlord s a regstered Housng Assocaton. Management Organsatons when actng as managers for a Landlord The landlord must f requested by the Tenants Assocaton, put n wrtng the dutes of an exstng Management Organsaton and gve the Assocaton a reasonable perod n whch to comment on the Organsaton s performance. Before the appontment of a new Management Organsaton the landlord must advse the Tenant s Assocaton of the Organsaton s name, address and ts proposed dutes. The Assocaton has at least one month (28 days) n whch to comment. In both cases the landlord must take the Assocaton s comments nto account. 32
Your legal rghts Your ndvdual rghts as a Lessee Where a resdent s also the lessee hs/her legal rghts n respect of the ndvdual Dwellng are very smlar to those of freeholders. Ground rent and servce charges whch are specfed n the lease must of course be pad and there are mportant rghts for lessees gven by the law outlned above. The lease wll gve the landlord power to take acton f ground rent and servce charges are not pad and wll almost certanly nclude a number of oblgatons and condtons whch must be compled wth If the oblgatons or condtons are not compled wth or rent or servce charges are not pad t s normal for the landlord to have a power wrtten nto the lease to brng t to an end prematurely. However, a lessee cannot be deprved of hs/her home wthout specal court procedures beng followed. Ths s an extremely serous matter and a solctor should be consulted f the landlord takes acton under the lease. 33
Rule for sheltered housng PART 5 NHBC Rules of Regstraton nclude the followng rule. It only apples where a Bulder or Developer regstered wth NHBC s the vendor or lessor of a sheltered housng scheme. It does not apply where the regstered Bulder s only employed as a contractor by the vendor or lessor. 1. You must ensure that every potental Frst Purchaser of a Sheltered Dwellng bult or sold by you s provded wth a Purchaser s Informaton Pack whch contans the nformaton specfed n the NHBC Sheltered Housng Code. Ths must be provded when the Purchaser reserves the Dwellng and n good tme so that the Frst Purchaser can properly consder the nformaton whch t contans before exchangng or enterng nto contracts to purchase the Dwellng. 2. You must ensure that the Management Organsaton of a Sheltered Dwellng bult or sold by you enters nto a Management Agreement as requred by the NHBC Sheltered Housng Code. 3. If you sell or transfer a leasehold or freehold nterest n a Sheltered Dwellng to anyone who s actng n the course of a busness you must ensure that he covenants: that a Purchaser s Informaton Pack wll be provded to the Frst Purchaser as requred n (1) above; that the Management Organsaton of the Sheltered Dwellng wll enter nto a Management Agreement as requred n (2) above; and that these covenants wll be obtaned on any further such sale or transfer. Note: Whlst t s accepted as helpful gudance ths rule s not mandatory n Northern Ireland and the Isle of Man. 34
NHBC Buldmark House, Chltern Avenue, Amersham, Bucks HP6 5AP Tel: 0870 241 4302 Fax: 01494 735201 www.nhbc.co.uk CSSupport@nhbc.co.uk NHBC s authorsed and regulated by the Fnancal Servces Authorty HB520 04/05