In England and Wales the person who has the duty to comply with the Fire Safety Order (RRFSO) is called the Responsible Person (RP). If it is a workplace then the employer is the Responsible Person if it is not a workplace then the owner or a managing company working for the owner is the Responsible Person. There can be multiple Responsible Person’s in a building when more than one premises exist in a building or when there is one or more owner/freeholder in a building of flats/maisonettes. It is important when discussing the RR(FS)O, with regards to flats/maisonettes, you can establish who the Responsible Person or Responsible Persons’ are.
Leaseholders are customers who have taken up the option to purchase their property, or they may have bought their flat on the open market from former tenants who have sold their flat on. As a leaseholder you have bought the right to live in your property for a fixed number of years and the flat can be sold during that time. The ownership of the flat usually relates to everything within the four walls of the flat including floorboards, plaster to walls and ceilings and windows, but it does not include the external structural walls. The owner owns the structure and common parts of the building and the land it stands on. The owner or managing company is responsible for looking after the structure and common areas. As a leaseholder, however you may have to pay for your share of the owner’s costs of maintaining and providing these services to the block including a fire risk assessment, check your lease for a service charge.
When you purchase flat you sign a contract called a lease. The lease explains your rights and responsibilities and the rights and responsibilities of your landlord. You are the Leaseholder and the owner is the landlord. The lease is a relationship between a landlord and a tenant or a leaseholder (the individual). It deals with the legal rights and obligations that arise between two people when they enter into an agreement (the lease), which relates to land or property, or both. It is a legally binding document between the two parties. Most leases are held for a term of 125 years. You should get a solicitor to look at this and explain what it says when you buy the property, and ask to keep a copy. If you have a mortgage then your lender will keep the original lease. Not all leases are the same. Your own lease will give you details that apply to you and your home. Leaseholder’s Covenants are the terms of your Lease that you have agreed to. You should refer to your Lease for full details or consult your solicitor.
If you have purchased your flat the terms of your Lease should not be confused with tenancy agreement that you may have had prior to your home purchase.
If you have a share of the freehold you may collectively be able achieve savings when repairs or maintenance are needed by having a say in obtaining quotes, choice of contractor etc.
Acquiring the freehold gives the majority of leaseholders much more control over the block, as they decide how your property should be managed and by whom, be that ‘in house’ or utilising a professional managing agent of their choice rather than one who is often imposed upon flat owners by external Landlords.
Being a freeholder
Even though you will have purchased the freehold of your building, your leases of your flats will remain in place. You will be a leaseholder of your flat and a joint freeholder of the building.
As a joint freeholder you will have responsibility, together with the other freeholders, for performing the landlord’s covenants in the leases of the flats in the building. The usual responsibilities on the part of the landlord are to insure the building and to keep the structure of the building and any common parts of the building in good repair and condition including a fire risk assessment.
If there are several flats in the building it is a good idea to maintain the collection of service charges even though ground rent will no longer be collected. This will enable you to build up a fund for repairs and maintenance which may be required in the future. You will need to appoint people to be responsible for such things as organising insurance and repairs.
Bear in mind that if you decide to form a company to hold the freehold you will need to appoint Company Directors and a Company Secretary and you must ensure that annual accounts are prepared and appropriate returns are filed with Companies House. This can be quite onerous and you may decide to appoint an accountant to deal with these matters on your behalf.
If it is a big building you may decide to delegate the full running and management of the building to managing agents although you will have to pay for this kind of service.
How it applies to the RR(FS)O
It is important to know what your legal status is because it will dictate your duties under the RR(FS)O. If you are an owner/freeholder then you have duties under article 8 to 24. If you are a leaseholder then your flat is exempt from the order but the common areas, the responsibility of the owners/freeholders, are subject to the order. I would imagine the costs of implementing the FRA would form part of the service charge which should be detailed in the lease.
Note. Treat the above information with caution and if you intend acting upon it, take qualified legal advice.