Managing without agents: Flat owners should buy their freeholds but beware the pitfalls, says David Lawson

Click to follow
The Independent Online
When the lift broke down in the Maida Vale block where Jonathan Stoppi lives, residents resigned themselves to digging deep into their pockets for repairs. But nowhere near as deep as the managing agents suggested.

'We were horrified by the pounds 16,000 estimate and decided to do a little checking, he said. 'We turned up a quote of pounds 7,000.

So the residents decided to do a bit more research. The regular, seven-year renovation of the block was due and had already been quoted at pounds 35,000. The residents found their own estimate for pounds 8,000.

'That was the last straw, said Mr Stoppi. 'We sacked the agents and took over managing the place ourselves.

Hundreds of flat owners are taking advantage of new laws giving the right to buy out freeholders. This may swell into thousands as more realise they can escape the power of incompetent or, in some cases, crooked landlords. But as Mr Stoppi points out, problems may not stop there.

Most owners will have neither the time nor the inclination to manage their buildings, and are likely to hand over the task to agents. Unless they are vigilant, this can leave them with many of the old problems.

'We have shown that ordinary people can run their own lives - and save money, said Mr Stoppi.

Residents of the 11 flats in this elegant stucco-fronted block thought themselves a world away from the Rachman-like problems faced by many of the estimated 750,000 flat dwellers in London. After all, they took over the building in a far more civilised manner long before the new laws were brought into force.

The Church Commissioners decided to sell off hundreds of homes in the area during the 1980s but defused potential rows by giving residents first right to buy. Leaseholders were appointed directors of a company set up for each property; in effect, they became their own landlords.

'I suppose we were a bit apathetic, said Mr Stoppi. 'We allowed affairs to be handed over to managing agents and hoped for a quiet life. Invitations to annual meetings of the company would generally be ignored.

The broken lift opened their eyes. After waiting weeks for the quote and then being shocked by its size, one resident went off to find another. The big difference in price led to further work on the renovation bill, which really woke everyone up.

Almost as galling was the fact that residents had coughed up pounds 29,000

for refurbishment the last time it was done in 1985. And the fact that this

had been organised by different agents made them realise it was not a one-off problem. 'There was also no sinking fund organised to meet these bills, so we would be hit with a big amount each time.

The agents fought to keep their job, attending a meeting to argue that they were acting 'in the residents' best interests. But it was too late.

Now the group is trying to spread the word among hundreds of other residents likely to be in the same position. Mr Stoppi admitted that certain skills have helped the transition. He is a computer consultant, and has been able to organise the accounts and credit control. One resident has the legal expertise to handle the paperwork, while another neighbour is a businessman with a wide range of contacts.

The group is so confident of its abilities after running their building for two years, they are considering offering out their services to others more nervous about making the switch. They point out that doing the job themselves did not just save money.

Being on the premises and 'sitting on contractors meant the renovation was done much faster. 'We broke all records for getting scaffolding up and down again in four weeks. I can walk down the street and see other houses having the same work done with scaffolding up for months - all being paid for by residents.

The residents in Mr Stoppi's block also got more for their money. The original quote was just for work on the exterior of the building. The lower quotation covered repainting, carpeting and general refurbishment. Ongoing savings have also been made with cleaning services, which were previously 'a lick and a wipe by two men and a bucket - if they came at all.

The property is now worth more. Residents - and potential buyers - know they face no nasty shocks when the next renovation comes around in 1999, as a sinking fund has been set up.

This kind of story comes as no surprise to David Marcus of solicitors Franks Charlesly, who specialises in helping flat owners to buy out their landlords. 'Managing agents are the only group now able to hold residents' money and not provide information on how they spend it, he said.

The Government left a gap in the Leasehold Reform Act, which came into force last November, under which agents would be controlled by an approved code of conduct rather than the law. The Royal Institution of Chartered Surveyors is keen to preserve its image as a responsible body of professionals, and has been working hard on a set of guidelines for managing agents to be launched this autumn.

Mr Marcus pointed out, however, that these guidelines will not cover the many firms which are not members of the RICS. Other groups such as the National Association of Estate Agents, the Association of Residential Letting Agents and the Incorporated Society of Valuers and Auctioneers, have their own codes of conduct, but many agents belong to none.

At the end of the day, however, Mr Stoppi and his group have not questioned the honesty of agents, just the ability to manage. They say residents can do the job better themselves, perhaps with a bit of help from others who have already gone down this road.

Further information: Jonathan Stoppi, 665 Finchley Road NW2 (071-431 7171)

(Photograph omitted)