Raising standards in retirement housing

Formation of Residents Associations

(Revised 2006)

Introduction

This note describes good practice for the formation and running of Residents' Associations. Residents' Associations can play a useful role in the smooth running of a retirement housing scheme. That role is recognised in legislation that gives residents rights to consultation. It is important that people working for management organisations are able to advise on the setting up, and running of organisations. The term 'residents' is used in preference to the term tenant as leaseholders will normally use the title Residents' Association.

Whilst the ARHM strongly supports the role of residents associations we think managers should also use a number of ways to consult and involve residents.

Recognition of residents' associations is in Schedule 19 of the Housing Act 1980 as amended by the Landlord and Tenant Act 1985 and 1987. Leaseholders can apply to a rent assessment panel for a certificate of recognition of their association if the association has a membership of 60% or more of the owners, a proper constitution and elected officials

The ARHM Code chapter 12 states that managers should recognise an association with 51% or more of owners in membership, where the association has a proper constitution and properly elected officials

1. The Objects of a Residents Association.

In preparing guidance notes for the formation of a Reside nts' Association, one or more of the following should be considered as the objects of the Residents' Association:-

To preserve the amenities enjoyed by the lessees/residents.
To ensure effective supply of services and rights as entitled to under the lease.
To consult with the lessor and/or managers.
To assist in securing variations of leases.
To represent the lessees on matters of common interest.

2. Recognition of a Residents' Association by Managers

The following points should be considered as good practice:-

Proposed Residents' Associations should relate to a single development/scheme which has its own service charge.
No two officers of the Residents' Association should live in the same household.
The Residents' Association must be properly constituted ideally with ARHM model constitution, the RPTS one or one broadly similar.
Legal recognition of a Residents' Association by a Rent Assessment Committee will require that 60% of leaseholders are members. The ARHM code requires that managers should recognise a Residents' Association with a lower figure, which represents 51% or more of units. This should not preclude consultation and provision of information to individual residents.
The manager should ask for a signed list of members before recognition, not simply a list of names.
Residents' Associations should follow an equal opportunities policy
Accounting procedures should be in place for monies which may come into possession of the Residents' Association
Membership of the Residents' Association should be voluntary.
The scheme manager should not be a member or accept an executive appointment in a Residents' Association.
The landlord or manager may consider providing some financial aid for residents wishing to form a Residents' Association.
If recognition is granted the manager should agree when and how often the manager will meet representative of the Residents' Association at the scheme.
Managers should require that Residents' Associations seek annual renewal of recognition and require a list of officers and a signed list of members each year.
The manager should state that any correspondence from the Residents' Association shall be signed by the secretary and no other party.

3. How to start

It is accepted that the initiative to form a Residents' Association often comes from residents themselves. However the following may be considered by the manager when wishing to take the initiative in forming a Residents' Association:-

Discuss with residents whether they are interested in forming an association when there are sufficient numbers to ensure that any group formed is a representative body.
If there is sufficient interest, call an informal meeting to discuss the formation of a Residents' Association. Ensure that the Scheme Manager is part of the process.
Ask someone to take notes of the main points of discussion, any decisions made and who is going to carry out what action. Ensure a copy is supplied to the notice board.
If required organise a secret ballot so that all residents can have a private vote on whether they wish to form a Residents' Association.
Members of the Residents' Association should be aware that they could be held personally liable for the liabilities and debts of the Residents' Association.
Residents will need to decide:
Name of the Association
Objects of the Association, constitution, standing orders.
Membership fee, whether to charge and how much.
Number of members.
Date of initial election of committee and annual AGM.

4. Voting Rights

It is recommended that voting rights should be restricted to one vote per dwelling. Where there are joint leaseholders or residents then the first named person on the roll of members shall have the right to vote.

5. Support for Residents' Associations

The Tenant Participation Advisory Service (TPAS) is an independent organisation run by landlords and tenants together. TPAS provides advice, information, practical help and support to both landlords and tenants. It provides a full local training service and organises leading conferences and services. Further information can be obtained from Tenant Participation Advisory Service (TPAS), Brunswick House, Broad Street, Salford M6 53Z

The Residential Property Tribunal Service publishes a free leaflet on 'Tenants' Associations' which explains the role of Rent Assessment Panels in recognition of associations and a model constitution. See www.rpts.gov.uk. tel. 0845 600 3178

AIMS is happy to give advice on setting up a Residents' Association. AIMS will also give advice on suitable constitutions for resident associations. Advice Information and Mediation Service (AIMS) Age Concern England, Astral House, 1268 London Road, London SW16 4ER Tel:- 020 8765 7465

6. Winding up of the Residents' Association

The constitution should state how the Residents' Association can 'be dissolved' and what will happen to any funds or possessions in its ownership e.g. "The Association may only be dissolved at a Special General Meeting called for that purpose. The meeting must be advertised 14 days before the date of the actual meeting". It is recommended that on winding up any funds should be given to members in equal proportions, the funds be credited to the service charge account, a gift to a charity, or the repayment of any grant from the manager if winding up occurs within 1 year of the grant being made.

Model Constitution

The Association will be called______________________________________________________

1. Boundaries

The Association covers the following area/blocks/numbers/addresses.

2. Objectives

The objectives of the Association shall be:

To protect and advance the interests of all owners covered by the Association on matters concerning housing, the environment, social, and community life of the scheme

To encourage community spirit and to work towards the elimination of all forms of discrimination

To promote the interests and rights of home owners

To ensure that all members are consulted regularly and that all residents eligible for membership are encouraged to join

To preserve and support the facilities and amenities of the area

To help build a good relationship between residents and the manager
(substitute Landlord, Freehold Owner or Managing Agent if appropriate)

3. Membership

Membership of the Association is open to all home owners (leaseholders or freeholders but not sub-tenants) but voting shall be restricted to one vote for each flat or house or bungalow.
(adapt to situation)
Membership of the Association shall cease upon any member giving written notice to that effect, upon any member ceasing to be a home owner, or upon failure by a member to pay the annual subscription within 3 months after the subscription shall become due.

4. Subscriptions

All members shall pay such subscriptions as the Annual General Meeting shall determine.

5. The Officers

The officers of the association shall be a chair, secretary and treasurer. However the roles of secretary and treasurer may be combined.
The officers shall be members of the Association and shall be elected annually at the annual general meeting and shall serve for one year but may be re-elected.

6. Committee

The Association shall be managed by a Committee comprised of the Officers and (-) other members of the Association also to be elected at the Annual General Meeting. Committee members other than officers shall be elected to serve for 3 years and shall retire in rotation.

A quorum shall be a minimum of 2 or sixty per cent of Committee Members whichever is the greater.

No meeting shall take place without a quorum.

Any Officers or Committee Members must declare any relevant personal interest. The Committee shall have the right to determine whether that member should withdraw, or be allowed to speak and vote.

7. Annual General Meeting

The Committee shall arrange an Annual General Meeting in (insert month) of every year.

At this meeting:-

The Committee shall present an annual report of the Association
Any sub-Committees should report on their activities
The Treasurer shall present the audited accounts of the Association for the past year
30% of the Committee should resign annually being those with the longest service on the Committee
The Officers shall be elected by secret ballot
An auditor shall be appointed who shall not be a Committee Member
The vacancies amongst Committee Members should be elected/re-elected by secret ballot
Any proposals and nominations should be submitted to the Secretary in writing not less than seven days in advance of the meeting shall be considered

The Annual General meeting vote on any recommendations and approve any amendments to the Constitution.

The Secretary shall notify all members of the date of the Annual General Meeting not less than 14 days in advance.

A representative of the Manager may be invited to attend.

Quorum for the meeting shall be 25% of the members.

The minutes of the Annual General Meeting should be copied to all members and the representative of the Manager, and should be publicised and pinned to any notice board in the area.

8. General Meeting

There shall be a General Meeting open to all members every _____ weeks/month(s)
(state the number of weeks or months)

There should be a minimum of two open meetings per year for members of the Association to discuss issues, and these should be publicised in advance.

9. Special Meetings

Special General Meetings open to all members can be held for the purpose of altering the Constitution or for considering any matters which the Committee may decide should be referred to the Members in general. The Secretary or Chair shall call such meetings at the request of not less than 3 Committee Members, or at the written request of not less than 60% of ordinary members. The Secretary shall arrange for such a meeting to take place within 21 days.

The Secretary must give at least 14 days notice of the Special General Meeting to all members.

10. Sub-Committees

The Committee may appoint a sub-committee from amongst members of the Association to carry out special activities of the Association. Any sub-committee formed will keep accounts of their spending and a record of the Meetings

11. Role of The Secretary

The Secretary will let members know about meetings, and keep notes describing what happened at the general and committee meetings. Such notes shall be made available to any members on request and published on a notice board where one is available.

The Secretary will keep a list of all the Association's Members and annually provide a copy of the list to the Manager.

The secretary should make all correspondence with the Manager available on the notice board or to members on request.

12. Finance

The financial year of the Association shall end on __________________ in each year.

All money granted to, or raised by, the Association shall be used for the benefit of the Association's Members or in accordance with the objectives set out in the Constitution.

All expenditure must receive prior agreement from the Committee. Expenditure other than petty cash shall be formally approved and minuted and must have due regard to any legal requirements and good custom and practice.

The Treasurer will open a Bank Account in the Association's name. Cheques should be signed by the Treasurer and at least one other Committee Member. The Treasurer will keep an account of money spent by the Association and every year will give the books to an Auditor to be checked.

13. Alteration of the Constitution

Any alterations to this constitution shall require the approval of a two-thirds majority of those present and voting at the General Meeting at which it is discussed. Any resolution for the alteration of the Constitution must be received by the Secretary at least 28 days before the meeting at which the resolution is to be brought forward.

14. Dissolution of the Association

The Association may only be dissolved by a Special General Meeting called for that purpose and advertised at least 14 days in advance.

Any proposals to dissolve the Association shall take effect if agreed by two thirds of the members present.

All funds, documents and possessions belonging and relation to the Association shall be disposed of.

This Constitution was adopted as the Constitution of the Association at a public meeting held on

_______________________200/_____

Signed ____________________________Chairperson

Signed ____________________________Secretary

DISCLAIMER:

These notes have been prepared in the light of legislation and case law existing at the time of publication as a recommended procedure only. No liability can be accepted by the Association of Retirement Housing Managers for errors or omissions or for any loss or damage sustained by anyone acting in accordance with these notes. If the reader is in any doubt as to the application of these notes to particular circumstances he/she should consult a Solicitor.