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TRUST MANAGEMENT CHARGE UPHELD

An independent expert has endorsed the level of the management charge for 2009/10 and the Hampstead Garden Suburb Trust's operation of the Scheme of Management for the Suburb.

The management charge covers freeholders' share of the Trust's costs in looking after and controlling change to the Suburb's landscape and architecture. The Trust Council has consistently stated that it expects to maintain the charge, subject to inflation, within the range of £100-£140 per annum in the foreseeable future; approximately £2 per week, per household.

The independent expert appointed by the President of the Royal Institution of Chartered Surveyors to decide whether the annual charge for 2009/2010 was fair and reasonable concludes "I have not been able to agree on any of the substantive matters raised by "Concerned Residents" and Objectors". The Management Charge at £125.80 per household for the year 2009/2010 has been confirmed.

This is the third challenge to a Management Charge by groups led by Dr Raphael Papadopoulos of Asmuns Place. The Leasehold Valuation Tribunal rejected his previous challenge to the charge for 2005/2006 and another independent expert rejected his challenge to the charge for 2008/2009.

The latest expert's report agrees with previous decisions in upholding both the level of the charge and the way the Scheme is operated by the Suburb Trust. However the report has left all parties dissatisfied. The report was first wrongly issued for the year 2010/2011, withdrawn, and re-issued for 2009/2010. The expert commented that "the figures within my Determination were principally there by way of illustration and the arguments in connection with the management charges remain precisely the same". Even so the Trust has sent the expert a letter correcting a number of matters of fact in the report. The confusion has naturally increased the objectors' unhappiness and has reduced the Trust's satisfaction in the decision. (For the expert's full report and the letter of correction from the Trust click here).

The objectors are calling for the Trust to demand the return of the expert's fee of £11,439. (This has to be paid up front without either party having sight of the report). The Trust Council will consider the matter when it meets in May. However the law in respect of an "expert determination" of this kind limits the grounds for challenge to matters such as deceit, fraud, and bias, which do not apply in this case. The Trust has been advised that the expert's report is valid; that he has fulfilled his contract; and that attempted litigation to recover his fee would be expensive, time consuming and unlikely to succeed.

The latest "Concerned Residents" challenge will add over £3 to each charge this year; previous unsuccessful challenges have involved comparable costs. This figure does not include the very significant diversion of the time and effort of Trust staff that results. Nonetheless the Trust supports residents' right to challenge the charge, although residents are encouraged always to raise their concerns with the Trust first.

The Trust Council is fully committed to balancing its duty to deal fairly with residents liable to pay the Management Charge and its equal duty to all residents through the Trust's other charitable functions.

It is a matter of regret that Dr Papadopoulos refuses invitations to discuss his concerns with the Trust and that his arguments and calculations remain essentially unchanged from those rejected by the Leasehold Valuation Tribunal in 2007. It is a matter of satisfaction to the Trust that where others have discussed their concerns with the Trust differences have often been resolved and the Trust has been persuaded that some of its calculations should be revised.

The Surveyor, in the most recent Determination, recommended that the way in which shared overheads are apportioned to the Scheme of Management should be spelt out in greater detail and the Trust will be considering how best to do this. The Trust will also be considering whether it would be helpful to Management Charge payers to make the distinction between the Trust's funds (which it holds in trust for all residents) and the Scheme of Management funds (that are held in trust for Management Charge payers until expended) even more apparent by preparing an operating account and a balance sheet for the Trust on a separate page from the accounts of the Scheme of Management.

As part of a policy of increasing direct participation by residents in the Trust's affairs over and beyond the four elected, resident Trustees, two resident Management Charge payers with appropriate business experience are now members of the Trust's Finance Committee.

The Trust hopes that residents unhappy with the Management Charge or, indeed, any other aspect of the Trust's policies, will take advantage of the standing invitation of the Trust to discuss their concerns with members of staff or, where appropriate, with Trustees. A great deal of time and expense can be saved in this way.

The Scheme of Management is the principal means by which the Trust is able to preserve the special character, architecture, trees and open spaces of the Suburb. The recent challenges to its operation have not found any substantive weakness in the Scheme or in the manner in which it is run. It is the fervent wish of the Trust that residents and Trustees can work together to avoid further disruptive and expensive challenges and concentrate on the real work of conservation.

POSITIVE RESULT FOR TRUST: 25 INGRAM AVENUE

The Court of Appeal, the second-highest court in the land, has confirmed the powers of Hampstead Garden Suburb Trust to control development on the Suburb in the public interest, even where the local authority has granted planning permission. The Court of Appeal decision will be welcomed by all who consider that the special architectural and landscape qualities of the Suburb have been maintained by the extra controls exercised for the past 36 years by the Trust under the Scheme.

The owners of 25 Ingram Avenue had appealed against the earlier decision by the President of the Lands Tribunal that the Trust had been correct to refuse consent to build an extension above the garage at the side of the property.

The Trust had objected to the terraced effect that would be created by visually joining houses together at first floor level and to the loss of views of greenery seen over the garage roofs. The situation could have been replicated in hundreds of locations across the 800 acres of the Suburb, causing widespread damage to the amenity of the area.

Lawyers for the owners attempted to argue that the Trust was not a body acting in the public interest and that the Trust should follow the decision reached by the local planning authority, who had granted planning permission.

In the Appeal Court judgement, issued in late January, three Law Lords unanimously dismiss the appeal by the owner of the house. They said in their judgement:

The Suburb represents the implementation of the social and architectural concept of its founder, Dame Henrietta Barnett. One of the guiding principles was that the interests of individual property owners should be subservient to the interests of the wider community.

The decision means that the Trust will be able to recover most of the costs it has incurred in fighting the case. Once recovered, the money will be returned to residents through a credit against the annual Management Charge.

A PDF of the full transcript of the Judgement is available by clicking here.