Our legal position
Under English law the ownership of buildings like Castelnau Mansions (the freehold) is normally legally separate from the ownership of a right to occupy a flat within the building (a leasehold). The freeholder owns the building, and sells the rights to occupy flats, for a period of time and following certain terms and conditions, to leaseholders. The terms of occupation are set out in the lease for each flat.
In 2003, when a majority of leaseholders successfully forced the then owner of the two buildings and grounds of Castelnau Mansions to sell, Castelnau Mansions Ltd (“CML”) was formed as the freehold’s new owner. It is a not-for-profit company limited by guarantee, and it is wholly owned by individual leaseholders in the Mansions. Those who contributed to the purchase cost, those to whom they sell their leases, and those other individuals who purchased new leases are all eligible for membership of the CML. There is no charge for membership, and any theoretical liability is limited to £10 a member.
Between 3 and 7 members of CML are elected or, if necessary, co-opted to make up a board of (unpaid, volunteer) directors who then deal with the major decisions that have to be made about the Mansions. The CML also employs a managing agent, to deal with the day-to-day running of the Mansions and to collect the service charge.
In May 2006, CML adopted a Governance Statement which includes Operating Principles for the Board of Directors. This document has been updated and is available on the Mansions website. It spells out in detail the respective roles of CML and the managing agent, and the difference between the CML’s money and the Mansions maintenance fund.
CML is registered at Companies House and it observes the requirements of the Companies Act. The Company’s Memorandum and Articles of Association are available from the company secretary, on request.
The structure of ownership was designed to take us as far as possible towards the models of condominium or co-operative ownership of flats. However, we are not in law a condominium or a co-operative, and we have to work within the terms of the leases while trying to run the Mansions with the best interests of the majority as our key aim.
Company membership
Membership of Castelnau Mansions Ltd is restricted to leaseholders of flats in the Mansions. Members may vote at the AGM (one vote per flat) and serve as directors.
All leases granted by CML include a sub-clause, through a deed of variation, that requires each member to bear, in equal proportion, the annual running costs of CML. The managing agents collect this from members at the time of the July service charge demand.
The service charge
The service charge is set in December each year by the board and is collected from all leaseholders in two equal instalments in the following January and July by the managing agents who place the monies in a trust account. The charge covers the anticipated costs of porterage, gardening, cleaning, buildings insurance, routine maintenance and management for the year.
The charge also includes a contribution to the sinking fund for future major works. Approximately every 7 years the exterior of the Mansions is given a full refurbishment. This is a major project, done under the supervision of a Chartered Surveyor, and is inevitably costly. Other commitments include periodic maintenance of the common parts and maintenance of the outbuildings.
Our policy since 2008, following a period of unacceptable fluctuations in the level of the service charge, is to smooth the amount demanded as much as possible. This will involve estimating in advance the costs of future works, and collecting the bulk of the funds for those works evenly over several years in advance. We intend this to be fair to all residents, including those who buy or sell between the years when major works are scheduled.
Communication
All work done on Mansions maintenance costing over a certain figure can only be done after full consultations that follow the provisions of the Landlord and Tenant Act 1985. The managing agents deal with these.
Those are certainly not the only communications with leaseholders that we have. The board sends out an informal newsletter from time to time to keep all leaseholders and residents in touch with the CML’s plans, the progress of works, contact details, issues arising and so on. There is an AGM, usually in mid-June each year, where members can propose motions, speak and vote; other residents are invited to attend.
Board members live in the Mansions and are always happy to receive suggestions, comments and queries about the running of the buildings. The up-to-date details of the current board membership are in every newsletter, and on the notice board in each front stairwell.
And finally…
Help with running the Mansions in any capacity is always extremely welcome. Please contact any director.
Castelnau Mansions 