Page 8 - STATEMENT OF CASE re-OCR s22_1

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same sort of charge as they would have to pay for a properly regulated and indemnified agent meeting all its required professional obligations.
(comment/reply) MHML has £100,000 Professional Indemnity, is a member of the government ap- proved PRS (Property Redress Scheme since Octber 2014) and a member of the RLA (Residen- tial Landlord’s Association, which we consider more than adequate for the caretaking of the 9 residential flats at Mitre House (of which all directors/shareholders are also owner/lessees), and in keeping costs to a minimum for the benefit of all lessees.
6. Rates of Management Charges
Section 8.1 of the Code of Practice approved under Section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 requires service charges to be no more than are reasonable. MHML is abusing its position as head lessee by imposing management charges on the leaseholders/tenants at market rates comparable with or exceeding those which would be charged by an appropriately qualified and regulated managing agent offering relevant safeguards.
Mr Brown-Constable invoices MHML for his personal "consultancy" at daily rate fees of £10 a day for 365 days per annum. That is a total of £3,650 per annum and is charged by MHML to the Service Charge Ac- count. MHML, of which Mr Brown-Constable is a 25% owner, charged the leaseholders £4,320 each for the three years 2012-2014, £4,850 for 2015 and is projecting £4,995 for 2016. These charges are not reasonable. The leaseholders are paying £54 per annum more today than they were paying in 2011 (the year before MHML took over the management of the Property) to Kinleigh Folkard & Hayward, a rep- utable firm and one of the largest independent property services groups in London. By contrast with MHML, which has no office costs to cover, no personnel costs, no professional indemnity or fidelity insur- ance, and no relevant expertise, KFH has to defray all of these substantial costs out of revenue received.
(comment/reply) Annual Service Charge/Reserve annual costs, including fees charged by MHML, to Lessees (over the six year period of our tenure) are only £54 per annum per lessee more in 2017 today than lessees were paying our previous Agents (KFH) in 2011. And our fees include 24/7 on site attention and very careful attention to all expenditure, both contract and misc.
7. The 2014 Refurbishment, Failure to follow Section 20 consultation procedures, and MHML's undisclosed charges.
MHML has failed to follow statutory consultation procedures laid down by Section 20 of the Landlord and Tenant Act 1985. In order to comply with terms in the head lease of Mitre House it was agreed between MHML and the leaseholders at Mitre House that a substantial refurbishment of the block, both internally and externally, should take place. This refurbishment work ultimately started in September 2014 but was preceded by some two years of detailed, intensive and frequently acrimonious correspondence. There was a wide divergence of opinion within the block about the appropriate extent, cost, style and timing of the work to be done.
(comment/reply) All required s.20 Notices were raised correctly and processed correctly and there was no fraudulent remuneration made to any parties including MHML or its directors.
Following a lengthy consultation process in 2014 between MHML and the Mitre House leaseholders under Section 20 Landlord and Tenant Act 1985 it was finally agreed that a firm called AR Lawrence & Sons Ltd should carry out full external and internal redecoration works at Mitre House at the tendered price of £105,019.38, (being £81,487.62 for external works and £23,531.76 for internals). This was all set out in a Section 20 letter dated 22 June 2014 from MHML to the leaseholders - see Item 3. It was also explicitly stated in the board minutes of MHML of 23 May 2014 that A&R Lawrence had been appointed to carry out the external and internal refurbishments.
Once a specification/schedule of work has been approved by the leaseholders under the Section 20 process, and contractors approved to carry it out, it is not open to MHML, except with the consent of its leaseholders, to deviate unilaterally from the approved scheme of work, or to decide that it will use differ- ent contractors. But some of the leaseholders found out that this was precisely what had been happen- ing. Although the leaseholders were paying to have the work done by skilled tradesmen at AR Lawrence,