To all owners:
As you have undoubtedly noticed, the costs charged to you for running the Landmark buildings have increased, and the level of service decreased. As a group of fellow owners, we have decided to pursue a course of action that will enable us to get more control of costs and services and replace Rendall & Rittner (R&R - who are employed by our Freeholder) with an alternative company that will be accountable to owners.
We are doing this via legislation called the Right-to-Manage (RTM), which enables groups of owners to take control of their buildings.
RTM is a transfer of power from the freeholders of a building to the leaseholders
If successful, through the RTM process, we will be the employer of the block manager and not the Freeholder so we can make decisions concerning the annual service charge and running costs that benefit the owners rather than the Freeholder or the block manager.
Why are we doing this?
There has been a noticeable increase in service charges and other costs over the last years; this, together with reduced service levels has pushed some leaseholders to try to understand the cost and get more control on running the blocks. As leaseholders we are currently powerless to feed into the budget setting process or on any aspect of managing Landmark Towers – RTM will enable us to do this.
How does an RTM work?
An RTM Company operates like any Resident’s Management Company or Homeowners’ Association. It has a board of directors who act (without remuneration) as the client to the block manager instead of the freeholder.
RTM Companies are dormant, and each flat represents one member, and the liability of each member is limited to £1.
The RTM Company that has been set up covers both towers as an underground car park connects them and is therefore considered one building for the purposes of RTM.
Further information
RTM is the most common route for groups of owners to take control of their buildings, and there is lots of information available on the internet.
How long will it take?
The whole process will take about 6-9 months. We are required to get 50% RTM membership to make the claim, and so it depends on how quickly we get to that point.
To help us in our endeavour, we are using a company called HAUS who have been recommended to us. HAUS specialise in RTM and manage over 210 blocks (c. 10,000 units) in London. In the last 12 months, they have been involved in five RTM acquisitions where R&R are the block manager. They have a 100% success rate and have helped over fifty groups of owners attain their RTM in the last three years. Most recently, they have replaced R&R at Anchorage Point, which is opposite to Landmark Tower West facing the river.
Please have a look at their online reviews
HAUS have agreed to fund the cost of undertaking the RTM and will only recover this if successful. No money will be required upfront from anyone. HAUS have also agreed to a full 12-month warranty on their management fees.
Will we save money?
There is strong evidence that we are paying over the market rate for services to our building. R&R have zero incentive to make savings or achieve the best value for money.
As a group of owners, we would like to see action taken on several issues around the development:
Large increases in heating and cooling
Other large increases, including service charges
Poor maintenance
Lack of responsiveness to questions and issues.
Management Fees
We pay R&R an annual fee of £300,735, HAUS proposes charging an annual fee of £193,800 which is more in line with market rates.
Staff Wages
19 staff are employed across the estate, and we have an annual wage bill of £903,392. HAUS have recommended having a full audit undertaken of the staff to see if savings can be made. The HR audit will let us know whether we need so many staff and whether cuts can be made without compromising service. Previous audits have made c.15% savings. Also, bear in mind that under an HMRC ruling, RTM Companies are exempt from paying VAT on staff salaries which would represent a large saving on annual costs.
Electricity
We are budgeted to spend over £1m in electricity in 2023. Other than using various energy brokers, we will be able to commission our own investigations on energy-saving measures across the estate.
Insurance
R&R do not use brokers in the traditional sense. They own an offshore ‘captive’ insurance company in Guernsey that routinely makes a 40% profit on premiums. Further info here
M&E Plant Maintenance
We are budgeted to spend £178,000 in the 2023 budget. By comparison, similar-sized blocks with similar assets are paying c. £90,000.
Heating/cooling costs
Many of our group own property in other developments and the costs at Landmark Tower are considerably higher. The high heating and colling costs are a case in point. Having an RTM Company would enable us to appoint a manager who will be incentivised to reduce costs and oversee a project that will enable residents to control their own heating by way of a thermostat installed in each flat (this is possible, but it requires coordination which R&R are unwilling to undertake)
Retendering for services
As a group of owners, we would like to see a full and transparent retendering process undertaken for all items of major expenditure.
Will we get a better service?
Yes, because the new manager will work for us and not the freeholder. Secondly, their fee will 100% be linked to performance, and we will be free to choose another agent if things don’t work out.
How will the building be run?
If you become a member of the RTM Company, you are not obliged to do anything, and no commitments are required from you. We need to demonstrate 50% membership for the claim application.
We currently have a board of voluntary directors for the RTM Company – Landmark Towers RTM Co Ltd
However, we welcome any Landmark leaseholder also to join the board of directors if they wish to at any time (before or after acquiring the RTM).
We will try and limit the number of directors to a manageable level (no more than nine). As a member, no one will force you into being a director.
The board will meet with the block manager at least once a month and be the primary liaison between the owners and the manager.
How much will it cost?
The final cost will be £80 per flat, and this includes an estimated amount for the Freeholder’s legal expenses for checking the claim. HAUS have agreed to cover the upfront costs, which will be recovered only if the RTM is successful. As part of the process, HAUS will run the estate for 1 year; if, at the end of that year, we are not happy with the service provided by HAUS, this cost can be refunded.
What about the Estate?
Typically, acquiring the RTM gives control to the RTM Co of the block costs with the estate areas still under the remit of the Freeholder-appointed agent. However, HAUS’s legal advisers have ensured the estate is included as appurtenant property in the claim notice.
Next steps
Go to Support the Landmark RTM and click on your flat to be taken through to a signing page
Who is making this happen?
We are a group of flat owners. We are all volunteers and don’t receive any payment or expenses in both monetary and non-monetary forms. We simply want to have the building well-managed and get value for money from our service charge. We are currently powerless to make any changes to how the building is run and feel that undertaking an RTM is the best way of having a managing agent who works in the interests of leaseholders.