TENANTS’ ASSOCIATIONS

What is a Tenants’ Association?

A Tenants’ Association (TA) is an organisation formed by leaseholders of the same property or estate, to represent members on important matters and to act on their behalf. Members must hold long leases from the same landlord, on similar terms and be contributing to the same costs by way of a service charge. A TA can exist without recognition however it must gain formal recognition to acquire certain legal rights and to be fully effective.

Although a TA is often referred to as a Residents’ Association this is not the correct legal term and can be misleading as Residents’ Association can be formed to represent residents of all tenures in a local area.

What is the role of a TA?

The role of a TA is to represent member’s common interests and the objectives of an association may include:

To improve communication with the landlord or manager.
To ensure that residents are kept informed and consulted.
To preserve amenities or services enjoyed by leaseholders.
To ensure the rights set out in the lease and the legislation are maintained.
To help resolve any disputes with the landlord or other parties in a conciliatory manner.

Who is eligible for membership of a TA?

Members of a TA must be contributing to the payment of a variable service charge levied by a landlord of a block or estate of properties. Members paying fixed rents or service charges would not qualify for full membership of a TA, they would not have voting rights and cannot participate in most of the proceedings of the TA.

Membership would not be open to:

the landlord who is an individual, or in the case of ‘company landlords’, their employees or directors;
the manager or their employees, regardless of which party appoints them;
a resident management company including its directors, employees, members or shareholders which has purchased the freehold on behalf of the leaseholders cannot be a member of a TA (this is because on enfranchisement, the company effectively becomes the landlord of the building); or
tenants of shops, offices, restaurants or similar business premises (unless their tenancies incorporate residential accommodation) would not usually qualify.

What if there is another type of resident-run organisation?

A TA is an entirely separate entity from a Right To Manage Company, a Resident Management Company or a Resident Freehold Company or even a non-recognised Residents’Association and therefore a TA can exist and function on estates that have any of these companies. However, consideration needs to be given to the practicalities of how a TA might relate to or work together with these resident-run companies. It is recommended that the activities of a recognised TA are kept separate from any communal social committees, although a TA sub-committee could consider taking on these services.

Can an estate have more than one recognised TA?

There are circumstances in which more than one TA could gain recognition on the same estate, for example where the interests of leaseholders are different and there no duplication of representation. This could apply to multiple blocks of flats, but there could not be separate recognised TAs representing leaseholders of the same block as there will always be a requirement for a majority to be members.

What is the process of forming a TA?

If a few leaseholders are interested in setting up a TA the first step would be to set up an informal committee and draft a constitution, with the help of an organisation such as the Federation of Private Residents’ Associations (FPRA). This should take place before official elections of officers are arranged.

The informal committee should notify all leaseholders, including absent leaseholders, of their intention to form a recognised TA. If there appears to be enough interest, the informal committee should invite all leaseholders to an inaugural meeting, preferably giving two weeks’ notice. A copy of the draft constitution should be distributed prior to the meeting. The meeting should enable discussion to take place on whether there might be a recognised TA and should allow prospective members to comment on the draft constitution. Notes should be taken of this inaugural meeting, which summarise the main points of discussion. These notes should be made available to all leaseholders as soon as possible after the meeting.

A secret ballot could be arranged so that all leaseholders can vote on whether they wish to have a recognised TA. However, if it is already evident that a significant majority are in favour of setting up a TA, the next stage would be to elect officers and a committee. The main role of the committee is to represent the views of the TA to other parties and to propose and carry out the business of the TA. The election of the officers and the committee could be carried out at the inaugural meeting but a separate meeting could also be arranged to allow this to happen.

Although the total number of committee members should be set out in the constitution, it is strongly recommended to have at least a chairperson, secretary and treasurer. The roles of the secretary and treasurer could be combined if a leaseholder cannot be found for each role. Unless it is a small block with a limited membership, most TAs would be advised to have a committee of at least five members. The election of these officers can be carried out, at the above meeting, by secret ballot, rather than a show of hands, particularly if there is competition for any of the positions.

An annual membership fee should be agreed at the inaugural meeting and it should be collected from full TA members at the start of each year. These fees will be used to meet the costs the TA incurs, such as stationery, postage and photocopying. There may be occasions when the TA needs more substantial funds to pay for professional advice or to meet the costs of referring a matter to a court or a First-Tier Tribunal (FTT) of the Property Chamber. (Please see Information Sheet 115 Applying to a First-tier Tribunal)

What should a constitution of a TA include?

This is not an exhaustive list but the constitution should include all of the following:

Clarification of the objectives of the TA.
Eligibility for membership of the TA.
Finance and subscription, if any are collected.
Details of the committee, how it should be elected and term of service.
Details of the Annual General Meeting (AGM), other meetings and quorum required for these meetings.
Sub-committees, if any.
How alterations to the constitution can be made.
The process for disbanding the TA.

Examples of model or draft constitutions, which can be adapted to meet the needs of a particular scheme, are available free from organisations such as the FPRA, Association of Residential Managing Agents (ARMA) and the Association of Retirement Housing Managers (ARHM); please see contact details on final page and/or to download from their websites.

Although it may not be necessary for obtaining recognition a constitution should include an agreed code of conduct for its members to follow and should make a specific reference to equalities.

What are the benefits of gaining recognition?

A landlord or manager can be required to consult with a recognised TA and may be more reluctant to communicate with a TA that does not have recognition.

The secretary of the TA, on behalf of the members is entitled to:

Request a summary of the annual service charge expenditure.
Ask to inspect relevant accounts and receipts.
Request a summary of the insurance cover and inspect the policy.
Be consulted regarding the manager the landlord appoints or retains.
Propose contractors for consideration when the landlord or manager is carrying out major works and to inspect the specifications and estimates.
Appointment a surveyor to advise the TA on service charge matters and to inspect the common parts if the TA has concerns.

It should be noted that the rights set out in points 1, 2 and 3 above are available to individual leaseholders, if a written request is made, but points 4, 5 and 6 are rights given exclusively to a recognised TA.

What criteria does a TA need to meet to gain recognition?

There is no statutory specification for granting of recognition of a TA. An FTT will assess each case on its own merits. However, as a minimum an FTT would usually require the following:

The constitution to be fair and democratic.
Not less than 60% of qualifying leaseholders to be members of the TA, with one vote per flat permitted.
Members to be paying a variable service charge to the same landlord.
Only one TA to exist in the block, however larger estates with several blocks may have more than one TA.
The TA to be independent from the landlord.

How does a TA gain recognition?

A TA can write to the landlord to request notice of recognition. If granted, recognition is gained and no further action is needed. A landlord would not usually grant recognition unless a majority of leasehold owners are members. The landlord is unable to withdraw such recognition without giving at least six months’ notice to the TA.

If the landlord refuses to grant recognition or withdraws it the TA can apply for formal recognition to an FTT.

How does a TA apply for formal recognition from an FTT?

To apply for formal recognition from an FTT the TA must complete an application form. Forms can be obtained from the website at www.justice.gov.uk/tribunals/residential-property, or from an FTT office. A copy of the TA’s constitution along with a list of members and confirmation that listed members have paid their subscription would need to be submitted with the application.

What are the costs involved in making an application?

There is no charge for making an application however a TA would need to cover its own costs. An FTT would not usually award costs against the losing side but if directions are not complied with or a party behaves unreasonably an FTT could order the unreasonable or defaulting party to pay the other sides costs. The LA would advise leaseholders to check the lease as some leases allow landlords to claim costs in connection with tribunal proceedings as part of the service charge.

How is an application handled?

When an application is received by an FTT it is checked by the case officer, who will then send an acknowledgment to the applicant. A copy will be sent to the landlord and any other parties affected by the application. A tribunal panel is set up to consider the application, which may take place by paper determination or by an oral hearing. There may be 2 or 3 panel members including a chairman, but in less complex cases the decision is made by the chairman alone. Other members of the panel may include solicitors, lawyers, other professional people or lay people.

How long does a certificate of recognition last?

An FTT will usually grant a certificate of recognition for four years. When a certificate expires, a TA can apply for renewal. An FTT has the authority to cancel a certificate at any time if it considers that the TA no longer merits recognition.

What meetings should take place?

The constitution should set out the minimum requirement for meetings and it should include that an AGM is held every year.

It is recommended that the constitution sets out the requirements for holding other meetings during the year and the quorum that is needed for committee and ‘all members’ meetings. It should also state the period of time that must be given to notify members of meetings, which should include the date, time, place and agenda.

It is good practice for a TA to advertise all meetings and place copies of minutes or other relevant documents on a communal notice board, if there is one, and if possible to produce a brief newsletter several times each year.

The TA committee members

Elections for officers and committee members will take place at the AGM. It is fairly common for all or some of the same committee members to be re-elected without opposition. However, it is good practice for the constitution to require a proportion of the TA committee to stand down each year, which enables new members to be elected, as well as maintaining a level of continuity. If no new candidates come forward the retiring officers can stand for re-election.

A TA can only function effectively if there are sufficient committee members to carry out the responsibilities set out in the constitution. Committee members should be familiar with the constitution and it would also be helpful if they had some knowledge of the legislation and the relevant government approved codes of good practice.

TA committee members need to bear in mind they could be held personally liable for any liabilities or debts of the TA, although experience shows this is rarely a problem. All officers of TAs are advised to take out Director’s and Officer’s liability Insurance, which can be acquired collectively and is not expensive.

What if there is a change of landlord?

If there is a change of landlord, a TA with a current certificate of recognition should serve a notice on the new landlord informing them of the existence of a Certificate.

The Leaseholder Association strongly recommends that wherever possible leaseholders should form a Tenants’ Association and if they have enough members they should seek recognition.

Further information may be obtained from:

Association of Retirement Housing Managers (ARHM), 89 Albert Embankment, London SE1 7TP; Tel: 020 7463 0660; Email: enquiries@arhm.org; Web: http://www.arhm.org (only if the property is retirement housing).

Association of Residential Managing Agents (ARMA), 178 Battersea Park Road, London SW11 4ND; Tel: 020 7978 2607; Email: info@arma.org.uk; Web: http://www.arma.org.uk

Federation of Private Residents’ Associations; PO Box 10271, Epping, CM16 9DB. Tel: 0871 200 3324; Email: info@fpra.org.uk; Web: http://www.fpra.org.uk

First-tier Tribunal (Property Chamber) Tel: 0207 446 7700; Web: http://www.justice.gov.uk/tribunals/residential-property

Disclaimer: This is a very general explanation of the subject. Where issues are not governed by statute the information is our opinion or best practice. You are advised to seek professional advice before acting on the guidance contained herein. Whereas The Leaseholder Association endeavours to ensure that published information is correct, it does not warrant its completeness or accuracy. The Leaseholder Association assumes no responsibility or liability for any injury, loss or damage incurred as a result of any use or reliance upon the information and material contained herein.