Question 1

Forms of Authority

Accepted Answer

We have recently set up our residents’ association. Although we have a sufficient number of people who have paid the subscription fee, some have not returned the Forms of Authority. I can’t see anything in the FPRA Information Pack that suggests you must have these to act on behalf of members, but our consitution requires that “Membership of the Association shall be conditional upon the member signing and giving the Association a Form of Authority permitting the Association to act on the member’s behalf provided such authorisation shall not affect the member’s legal and contractual rights.” I would be grateful for your advice as to whether we must chase up outstanding Forms of Authority from members who have paid their subscription fee, before we can act on their behalf. In an ideal world we recognise it would of course be preferable but I’m sure you appreciate the effort involved in getting members to do anything! The FPRA replies: I do not think you need worry unduly about chasing up the Forms of Authority. The Forms serve a useful purpose in bringing it home to new members that a Residents’ Association can only work if members allow the Committee of the Association to negotiate on various matters on their behalf.; and perhaps to encourage them to participate in meetings so that their view is heard before the Committee come to any final decision. But the fact that the Constitution then says that this “shall not affect the member’s legal and contractual rights” does make it clear that the authority cannot commit the member to any specific course of action which affects them as individuals, unless they consent. Your query has in fact set me thinking about the precise effect of this authority. An unrecognised Residents’ Association has no real rights anyway. An association can be recognised (i.e. become one that is a “Recognised Tenants’ Association” under section 29 of the Landlord and Tenant Act 1985) by the landlord, simply by the landlord giving notice in writing to the secretary of the association. Alternatively, if the landlord refuses to recognise an association, or unreasonably delays recognition, or tries to impose unreasonable conditions, an association can seek recognition by applying to a Rent Assessment Panel (in effect, the Leasehold Valuation Tribunal “wearing another hat”) for a recognition certificate. If the Panel grants a recognition certificate, the landlord must treat is as recognised. An RTA has fairly limited formal rights, but, so far as I can see, an RTA would enjoy these whether or not all or any of the members had signed “Forms of Authority”. Recognition means that the landlord has to consult with the Association before appointing a (new) managing agent; this is a weak right, however, as the landlord retains the final say. An RTA also has certain rights to be consulted as an association on service charge matters which trigger the LTA 1985, s 20, consultation process, and has rights to nominate contractors from whom quotes should be sought. Finally it can appoint a surveyor to advise on service charges, under s. 84 of the Housing Act 1996. An RTA can do all these even if all members do not agree with the proposed course of action. It is not expected that the members must be unanimous. A recognition certificate can, however, be withdrawn by the Panel, and it might well do this, if it were shown that the affairs of the association are not being conducted in a democratic manner. Most of the more serious steps that a Residents’ Association might contemplate – e.g. making an application for Collective Enfranchisement, exercising the Right to Manage, etc. – would depend entirely on members agreeing as individuals to join in, so that the necessary majority of leaseholders was obtained. The RA can facilitate these, but could not commit its members to them without their consent. So too a challenge to the reasonableness of a service charge under section 19 LTA 1985 would be made by individual leaseholders, rather than by the Residents’ Association.

Question 2

Forms of Authority

Accepted Answer

We have recently set up our residents’ association. Although we have a sufficient number of people who have paid the subscription fee, some have not returned the Forms of Authority. I can’t see anything in the FPRA Information Pack that suggests you must have these to act on behalf of members, but our consitution requires that “Membership of the Association shall be conditional upon the member signing and giving the Association a Form of Authority permitting the Association to act on the member’s behalf provided such authorisation shall not affect the member’s legal and contractual rights.” I would be grateful for your advice as to whether we must chase up outstanding Forms of Authority from members who have paid their subscription fee, before we can act on their behalf. In an ideal world we recognise it would of course be preferable but I’m sure you appreciate the effort involved in getting members to do anything! The FPRA replies: I do not think you need worry unduly about chasing up the Forms of Authority. The Forms serve a useful purpose in bringing it home to new members that a Residents’ Association can only work if members allow the Committee of the Association to negotiate on various matters on their behalf.; and perhaps to encourage them to participate in meetings so that their view is heard before the Committee come to any final decision. But the fact that the Constitution then says that this “shall not affect the member’s legal and contractual rights” does make it clear that the authority cannot commit the member to any specific course of action which affects them as individuals, unless they consent. Your query has in fact set me thinking about the precise effect of this authority. An unrecognised Residents’ Association has no real rights anyway. An association can be recognised (i.e. become one that is a “Recognised Tenants’ Association” under section 29 of the Landlord and Tenant Act 1985) by the landlord, simply by the landlord giving notice in writing to the secretary of the association. Alternatively, if the landlord refuses to recognise an association, or unreasonably delays recognition, or tries to impose unreasonable conditions, an association can seek recognition by applying to a Rent Assessment Panel (in effect, the Leasehold Valuation Tribunal “wearing another hat”) for a recognition certificate. If the Panel grants a recognition certificate, the landlord must treat is as recognised. An RTA has fairly limited formal rights, but, so far as I can see, an RTA would enjoy these whether or not all or any of the members had signed “Forms of Authority”. Recognition means that the landlord has to consult with the Association before appointing a (new) managing agent; this is a weak right, however, as the landlord retains the final say. An RTA also has certain rights to be consulted as an association on service charge matters which trigger the LTA 1985, s 20, consultation process, and has rights to nominate contractors from whom quotes should be sought. Finally it can appoint a surveyor to advise on service charges, under s. 84 of the Housing Act 1996. An RTA can do all these even if all members do not agree with the proposed course of action. It is not expected that the members must be unanimous. A recognition certificate can, however, be withdrawn by the Panel, and it might well do this, if it were shown that the affairs of the association are not being conducted in a democratic manner. Most of the more serious steps that a Residents’ Association might contemplate – e.g. making an application for Collective Enfranchisement, exercising the Right to Manage, etc. – would depend entirely on members agreeing as individuals to join in, so that the necessary majority of leaseholders was obtained. The RA can facilitate these, but could not commit its members to them without their consent. So too a challenge to the reasonableness of a service charge under section 19 LTA 1985 would be made by individual leaseholders, rather than by the Residents’ Association.

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