Did you know that landlords (incl community housing landlords) are obliged to consult with tenants under 'long term tenancy agreements'?

If a landlord fails to consult tenants appropriately, then their recovery for payments out of service charge is capped at £100 per dwelling per year.

How is this relevant to community-led housing groups?

This is generally problematic only in the early stages of development.

For instance, if a group puts in a communal heating system in the first stage of a development, there are no tenants for the landlord entity to consult with. However, if it does not consult, the service charge cap of £100 still applies.

There is no easy solution to this in black letter law and it may be that groups need to revisit their rules to ensure that they can recoup payments. The landlord entity may not be able to rely on the service charge provisions in the lease to recover the cost, yet funders may require certainty on the point.

Advice

This is an example of a legal provision that non-specialist residential conveyancers may miss but can be easily avoided with appropriately drafted rules.

Are there any other obscure property law points that community-led housing groups ought to be aware of?

Unfortunately, there are. We attempt to update groups on this and can point you towards these related articles:

Unfair hidden ground rent costs on new builds - We consider the effect on community-led housing groups using leaseholds

How a community right to build order could help your group can retain affordable housing in perpetuity