Residents Associations

You may have heard the term Residents Associations but do really know what there all about? If you should be setting one up or joining one? And if you or your development would benefit from the formation of an association?

Residents associations offer leaseholders a chance to maximise their rights under the terms of their lease. A strong, well-represented association will also give leaseholders a much better position in the event of conflicts with the landlord or agent. Once a recognised (recognition is covered below) residents association is in place, the landlord is entitled to consult the association on service charge and management issues. Further to this, the association can require the landlord to consult with them on the appointment of a managing agent. In addition, an association can gain various other benefits for leaseholders, some of which are.

• Create a sense of community for the development
• Use the collective strength of the association to pressure the landlord or agent for the benefit of leaseholders
• Create a channel for regular correspondence with the landlord or agent
• Assist in resolving disputes for the collective or individual leaseholders with the landlord of agent
• Obtain financial information on service charge such as a summary of costs

In order for an association to be successful it must become recognised, if it is not then the landlord has no obligation to enter into consultation on any matter with the unrecognised association. There are two ways two gain recognition,

1. A written notice received from the landlord stating recognition of the association
2. A certificate issued by the local rent assessment committee



The landlords notice will generally not have a time period for renewal; however the landlord can withdraw recognition at any time by giving six months written notice. Certificates from rent assessment panels generally last up to four years at which point the association can apply for renewal. If a landlord refuses to give or withdraws recognition then an application can and should be made to the rent assessment panel for consideration.

Recognition will be granted based on the setup of the association. You should take time to prepare a constitution which demonstrates how the association will operate, recognition will not be granted without this. Your association should be completely separate from the landlord or any of the landlord’s employees. Membership must be open to and limited to all leaseholders and sub-tenants. There should be clear rules on how the association will be run, we suggest an elected board of directors and a chair. Regular meetings should be held and voting rights clearly documented. If a subscription will be levied on members then this should also be clearly documented.

Following reading the above you may think that setting up a residents association sounds like a great idea, especially if you are having trouble with your service charge or management. But, if you have a Management Company for your development then you have absolutely no need for an association.

If rights over the service charge and management are placed with a management company under your lease (and you are a member) then you actually have more rights then you would by setting up a residents association. By becoming a director of the management company you will be able to directly control the service charge and management of the development and have access to all of the financial information. In this case setting up a residents association is not only a waste of time, but may confuse other leaseholders. To find out about your rights over membership, directorship and voting for the management company ask your agent for a copy of the memorandums and articles of association (also obtainable from Companies House).



If however rights over the service charge and management are placed with the landlord then setting up a residents association will be the way to go. However in order to get the best results from the association a high number of members will be required. An association’s power lies in its collective strength.

If you are looking to form an association due to poor performance by a freeholder or an agent, or if standards have not increased following the formation of an association, then there are other options available to you. You could follow the right to manage process, however not all developments qualify for such and this may overcomplicate your service charge payments. You could also apply to the LVT for a change of manager. We suggest you take some legal advice to discover the best course of action for your particular development.