Overview
Crown Close is a block of 86 flats built by Wimpey in about 2004.
A Crown Court is adjacent, hence the name “Crown Close” and the Court occupies a building originally built in 1857 as a Masonic boys' school.
The development has a single entrance through an archway with a flat above. This entrance has separate pedestrian and vehicular gates with keypad access controls.
The courtyard inside the gates contains parking spaces. The 86 flats are built on three sides of the courtyard. One of the three sides contains two blocks of flats, one either side of the entrance gates, and so the development contains a total of four blocks of flats.
Each of the four blocks has a separate entrance with keypad access. Internally there is no access from one block of flats to another.
Viewed from the outside, the three arms of the development appear as a whole and the internal division into four blocks is not obvious.
The four blocks contain the following flats:
The descriptions “block A, B” etc were used by Wimpey during the construction process, and are still shown on some legal documents, but otherwise are not used.
The notice board outside each block refers to, eg, “1 to 21” (not “D”) and, in practice, people talk about “block 1 to 21” (not “D”).
Head lease & freehold
The land on which the development is built is held on a 150 year lease commencing 1 July 2002. The plot includes the grass area fronting Lordship Lane (but there are covenants on this area restricting its use).
A majority of the flatowners bought the freehold to the land on 30 June 08 and the flatowners who participated in the freehold purchase do not pay ground rent. Because these flatowners have the security of owning the land, they will have a major voice on any property issues, particularly after the expiry of the lease in 2152. Owning a share of the freehold is a “selling point” when buying and selling flats.
The minority of flatowners who did not take part in the freehold purchase continue to pay ground rent and will have a lesser voice on property issues, including those arising after 2152.
Sublease
Each of the 86 flats is held on a sublease. So far as is known, each sublease is identical. The terms of each sublease mirror the terms in the head lease. Each sublease is for 150 years, commencing 1 July 2002 and the terms include:
(1) Ground rent is payable, the amount is increased every 10 years in line with RPI (but is only collected from flats which did not participate in the freehold purchase).
(2) Doors between flats and corridors are the property of the flatowner.
(3) For flats with a parking space, parked vehicles must be roadworthy.
(4) TVs and similar cannot be played so as to be audible from another flat between 11pm and 8am.
(5) Satellite dishes cannot be fixed externally.
(6) Animals are not allowed without permission.
(7) External washing lines are not allowed.
(8) Corridors must not be obstructed.
(9) Each flatowner will pay one-eighty sixth of the maintenance charge plus £25 where a flat has a parking space.
(10)The management company will clean, repair and paint common areas.
(11)The management company will insure the property.
(12)The management company will pay the water bill for all 86 flats plus the electricity bill for water pumps, lifts and common area lighting.
(13)The management company can create a reserve fund for things such as periodic repainting and other major works.
Management company
The development is managed by “Crown Close Property Management Ltd” (CCPM). CCPM was formerly called Lordship Lane (Minerva) Management Co Ltd but the company name was changed in the interests of clarity.
CCPM is the company which levies a service charge on each of the 86 flatowners and which then spends the amount collected on common services. Each flatowner is a shareholder in CCPM with a vote at annual general meetings. An individual owning two flats has two shares and two votes and so on.
Following dissatisfaction with the previous managing agents, the development has been managed on an in-house basis since 15 Feb 2009. A resident is employed as to deal with day-to-day issues.
CCPM’s directors are flatowners elected each year at AGMs. The directors have set up a separate CCPM bank account, they set a budget each year, reflected in the service charge, and they sign cheques incurring expenditure.
Skingle Helps & Co, a firm of accountants, is employed to collect service charges from all flats, plus ground rent from those flatowners who did not participate in the freehold purchase. Collections are outsourced because the work involved would be too much for in-house, spare-time directors.
OGR Stock Denton, a firm of solicitors, is employed for legal work, including taking court action to collect unpaid service charge.
CCPM, essentially, can only spend service charge money for purposes authorised in the sublease. Other constraints in the company’s Memorandum & Articles of Association include:
(1) CCPM cannot pay dividends but can pay directors or employees.
(2) It must hold Annual General Meetings (AGMs), and can hold Extraordinary General Meetings (EGMs).
(3) Audited accounts must be available at AGMs.
(4) Two shareholders constitute a quorum at AGMs or EGMs.
(5) Resolutions at AGMs or EGMs will be decided by a show of hands, or by a poll, if requested, of those present and voting in person or by proxy.
(6) CCPM must have a minimum of 2 directors, there isn’t a maximum. Additional directors can be co-opted between AGMs or EGMs but must stand for election at the next AGM or EGM.
(7) Only flatowners can be directors.
(8) The directors will appoint a chair, keep records of meetings, keep accounts and appoint a company secretary.
(9) If the directors can’t agree, the Chair has a casting vote.
Freehold company
The freehold is held by “Crown Close Freehold Ltd” (CCF). CCF was formerly called Crown Close Development Ltd but the company name was changed in the interests of clarity.
CCF is the company which collects ground rent from those flatowners who did not participate in the freehold purchase.
CCF essentially doesn’t do anything, except collect ground rent, and scarcely requires any management. However, the solicitor's advice is that, technically, it is CCF, not CCPM, which takes legal action if necessary to enforce terms of the lease.