YOUR MANAGEMENT AGREEMENT YOUR RULES/CONSTITUTION LOUGHBOROUGH ESTATE MANAGEMENT BOARD Loughborough Estate Management Board General Meeting April 2017 Liz Michael, Liz Michael Community Consultancy Ltd
LEMB’S RULES AND TOOLS Registered Rules - the TMO’s ‘Being’ ◦Gives TMO right to exist as a legal entity ◦How it operates as a democratic body –one member/one vote ◦What its objects are – what it is in business to do Management Agreement - the TMO’s ‘Doing’ ◦Enables Council to delegate services to LEMB ◦The legally binding contract between the Council and the LEMB Business Plan - the TMO’s ‘Future’ o Vision - what TMO is trying to achieve o Set of business goals o Plan for achieving them 2
LEMB MANAGEMENT AGREEMENT
WHY IS YOUR MA IMPORTANT? LEMB has contracted with the council to deliver ◦ ◦ ◦ Ø Ø Ø What is in the agreement To the standard set out in the agreement and schedules Make sure LEMB complies with all commitments and responsibilities under the agreement Council has contracted with LEMB to pay allowances calculated (and reviewed) in accordance with the agreement and the law Board on behalf of members has a collective responsibility to: Both parties (Council and LEMB) can hold each other to account if they don’t comply with MA The MA must be up to date and reflect actual practice and current laws 4
WHY CHANGE? LEMB’s old Management Agreement dated from 1995 Never been changed or updated – was way out of date Legally Didn’t reflect actual contractual arrangements who does what and how Council insistent that secondment of council staff in old agreement is no longer legal Had to be updated – not a choice All other Lambeth TMOs now on 2013 model agreement LEMB new agreement based on this version Negotiated and agreed and signed 5
WHAT’S DIFFERENT IN NEW MA? THE BIG CHANGES…. Staff no longer seconded Council staff but employed directly by LEMB Legal ruling – Council’s view Staff became LEMB employees (current terms and conditions/new pension arrangements) Allowances (money Council pays to LEMB to provide services) is now paid directly to LEMB Previously held by Council in its housing account Meant LEMB had to use council contractors for many services and had little direct control Now LEMB is the same as all other Lambeth TMOs 6
THE BIG CHANGES LEMB has the power to employ its own contractors/staff on terms and conditions that the board sets Power to make changes, define the service standards, and control the costs Power to use savings for the benefit of the community after full consultation with members Accounts fully audited and presented to members every year Previously held by Council in its housing account Meant LEMB had to use council contractors for many services and had little direct control Now LEMB is the same as all other Lambeth TMOs 7
OTHER CHANGES FROM CURRENT MA Changes the nature of the partnership between LEMB and the Council (reflect reality) LEMB must act like a community business New MA much more specific and detailed on who does what LEMB services and standards it must meet Council services and standards it must meet The method of calculating LEMB’s annual allowances included in the schedules and how and when the allowances can be reviewed Lots of detailed policies and procedures included in MA MA much easier to navigate 8
TOUR OF THE MA Chapter 1 - General Provisions Sets out the legal basis for Council delegating services Sets out how agreement can be continued, varied, ended What happens if either party fails to perform, council can put TMO under supervision and end MA, equalities and diversity, training for board Continuation Ballot every 5 years /Vote in support of TMO at AGM Schedules – Map and property list, equalities policy, supervision policy Chapter 2 - Repairs and Maintenance TMO responsible for responsive repairs, Council structural repairs, TMO estate services, Council major works, All listed in detail in schedules Schedules TMO/council repairs responsibilities, Consultation on major works, major works procedures and functions, TMO and Council estate services, insurance repairs, right to repair and improve 9
TOUR OF THE MMA Chapter 3 - Rents TMO administers rent collection into council’s bank account, manages arrears and takes legal action if necessary, council sets rent Schedules – Rent arrears procedure, tenant service charges Chapter 4 - Leaseholder and Freeholder Service Charges Council calculates & bills and collection, TMO manages arrears control/legal action if necessary , Council does leaseholder consultation Schedule – Service charge procedure Chapter 5 - Financial Management Council calculates and pays allowances, TMO’s banking arrangements, TMO maintains reserve and surplus funds, TMO’s financial control and accounting standards 10 Schedules – Calculating and reviewing allowances or arrangements for self financing, financial procedure, accounts and audit
TOUR OF THE MMA Chapter 6 - Tenancy Management Selection of applicants for housing as per Council policies, TMO intro meetings, introductory tenants, TMO deals with residents’ disputes, anti social behaviour and harassment, unlawful occupation, succession, council processes right to buys New power for TMO to prioritise on estate downsizing tenants Schedules – Intro meetings, selection of tenants, Intro tenancies, tenancy agreement changes, breach of tenancy, ASB, residents’ disputes, exchanges, assignments, sub letting, giving consents, RT Buy Chapter 7 - Staffing and Relationship with Council TMO can employ its own contractors and staff, Council liaison officer role, and Council/TMO meetings, Council help to the TMO, TMO dealing with complaints, disputes and arbitration between Council/TMO Schedules –council liaison officer, TMO complaints, procedure 11 disputes, arbitration
TOUR OF THE MMA Chapter 8 - Monitoring and Performance Standards Key performance indicators, annual review and performance report, equalities monitoring and report, monitoring and development meetings, full 3 -5 yearly monitoring review by council Schedule – key performance indicators, comparator area for setting standards Chapter 9 - Definition of Terms 12
YOUR MANAGEMENT AGREEMENT MA was signed by Lambeth Council and LEMB in October 2016 Will be available on http: //www. loughboroughestate. org. uk/ Beware it’s a hefty legal document… 13
LEMB PROPOSED NEW RULES/CONSTITUTION
WHY ARE THE RULES IMPORTANT? The rules are LEMB’s legal governing instrument Also known as the constitution The Governing body is the Management Board (sometimes referred to as committee) Board has a duty to comply with the Rules in their entirety All shareholders (members) agree to be bound by Rules Board has a duty to make sure your Rules are fit for purpose and reflect current legislation and sector best practice Need council approval for any changes 15
LEMB RULES LEMB is a Registered Society (under the Cooperative and Community Benefit Societies Act 2014) Previously called an Industrial and Provident Society (IPS) Registrar is the Financial Conduct Authority Current rules date from 1992 although LEMB has made several partial amendments over the years Many changes in company and registered society law and good practice since then 16
PROPOSED NEW LEMB RULES Based on the 2010 NFTMO model amended for Further changes in legislation – 2014 Act – wording from clauses in National Housing Federation model Changes required by Council and included in recent Lambeth TMO rule changes ( RPRMO, CCRMO, WERMO) Minor additions/changes from the board Board have approved model subject to shareholders agreement Lambeth Council have approved other Lambeth TMO rules with same model – LEMB have made no significant changes Rules sent to Lambeth and LEMB responded to their comments Requires shareholders (3/4 of those voting) approval at general meeting Then we submit to Financial Conduct Authority for approval and registration 17
PROPOSED KEY CHANGES FROM OLD TO NEW – SUMMARY OF CHANGES Divided into clear sections Part A Name and objects Part B Powers of society, board, and shareholders Part C Shareholders and general meetings Part D The Board Part E Chair, chief officer, secretary and other officers Part F Financial control and audit Part G Miscellaneous and statutory Objects – more detailed and extensive including new ‘environmental’ clause Membership – simplified and as inclusive as possible in line with the requirements of a Community Benefit society. The Board will aim to reflect the tenure composition in ‘the Area’ – previously only 2 leaseholders on board. Restriction on re-admittance after exclusion from membership Proxy voting – new Emphasis on skills and obligations of board members Removal of board member for serious breaches Cannot be board member with serious rent/service charge arrears Changes to allow for e-communications 18
KEY CHANGES TMO Objects - to carry on for the benefit of the community: A 2. 1 The business of providing, maintaining, managing, investing in or financially supporting housing and associated amenities within The Area (“The Core Business”) and, in addition, providing, maintaining, managing, investing in or financially supporting any other services or amenities that benefit The Community and/or contribute to wider regeneration. This may include the creation of employment, the advancement of education and training, relief of poverty, the provision of public amenities and recreational facilities, and the promotion of public safety and the prevention of crime within The Area notwithstanding that such additional services or amenities are provided outside of The Area. Model - much wider remit than current rules A 2. 2 In carrying out these objects the Society shall have regard to the environmental impact of its activities and services with the aim of reducing the Society’s carbon footprint. New additional rule A 2. 3 In carrying out these objects the Society shall promote equality of opportunity and work towards the elimination discrimination and shall comply with all relevant legislation current rules specify a number of groups – not up to date with Equalities act 19
MEMBERSHIP/SHAREHOLDERS C 7 The following cannot be shareholders: C 7. 1 a person under the age of 16 years; Means membership open to 16 years and over. Same as current rules C 8/9 A corporate body or the nominee of an unincorporated body can be a shareholder - New - normal practice but not in current rules C 13 ‘Shall admit to membership any lawful resident or leaseholder aged 16 years or over who agrees to be bound by the provision of these rules (ref to leaseholder will include non resident leaseholders as thought they have interest in property) Current rules say tenant and leaseholders/freeholders but do not include sub tenants of leaseholders C 18. 4 No member expelled from membership (at a special general meeting) shall be re-admitted within three years. A member may only be readmitted by a resolution -majority of not less than twothirds of the members at any General Meeting – no time restriction in current rules C. 20. 2 – Audit if one is required by law – note as long as LEMB is managing estate and receiving money from council the management agreement requires professional audit 20
MEETINGS C 21. 2 SGMs - upon order of the board or 25 members or 10% whichever is lesser currently the lesser of 10% of members or 20 members C 23 – SGMs require 14 days notice currently 14 days notice C 25 - Quorum 20 members or 10% whichever is lesser subject to minimum 6 members same as current rules C 27 - If no quorum reconvene within 28 days –currently reconvened between 14 and 28 days C 28 - Allows meeting to decide who will be chair if chair & vice chair absent or unwilling to act. The chair with members consent can adjourn meeting current rules same except person chairing meeting must be a member C 29 – Normally voting on show of hands or as chair decides. Secret ballot held if demanded by 5 members but not after a vote by show of hands current rules 2 members and can be after vote by show of hands 21
VOTING C 30 Proxy voting – Not in current rules but in most Model Rules for companies/registered societies New restriction inserted - A person other than the chair acting as proxy shall only act as proxy for one shareholder. 5 days notice required Current rules state no proxy voting C 32 – In event of equality of votes chair has second or casting vote at GM – Same as current rules C 35 Secret ballot must be demanded before vote on resolution by 5 shareholders Current rules – 2 members and can be after show of hands vote 22
THE BOARD D 1 Board functions/duties set out not in current rules D 2 Board min 6 – max 12 elected members plus co-optees same as current rules D 3 Majority of Board must be resident tenants inc leaseholders (as opposed to non resident co-optees). Board reflect tenure of estate. (no reference in current rules although only 2 lease/free holders can be elected) D 4 The Board shall try to ensure it possesses the quality, skills, competencies and experience which the Board has from time to time determined that it requires. New D 5 Must set out the board members obligations in annual report and review and amend from time to time. Not in current rules D 5. 2 Any Board member who has not signed statement confirming they will meet obligations within one month shall immediately cease to be a Board member. Not in current rules 23
THE BOARD D 6 - Board can have 2 classes of Co-options (a) co-optees (can be non members) for skills etc - cannot vote on governance /election of officers and do not count towards quorum (b ) co-options to fill casual vacancies (i. e. when board members have left - priority to those not elected at AGM) - full voting rights and counts for quorum - –current rules - similar except max 6 co-optees with full voting rights (any number without voting rights) and co-optees to fill casual vacancies max one third of total board D 6. 2 e - Co-opted members filling casual vacancies counted for purposes of calculating a quorum. - Same as current rules but providing clarity D 10 A Board member may be removed from the Board by a two third majority vote at a General Meeting or by a resolution passed by three quarters of the Board removal by the board not in current rules but in most new models reflecting good practice D 9 – If removed, member cannot come back on board for 3 years New 24
BOARD - NEW LAMBETH REQUIREMENTS Cannot be or remain a board member if D 9. 4 tenant is more than 8 weeks rent in arrears, unless in the opinion of the Chief Officer having scrutinised supporting evidence, such arrears are caused by circumstances beyond the tenants control. ; or D 9. 5 a leaseholder in the area of benefit, is more than two months in arrears or two agreed instalments unless in the opinion of the Chief Officer having scrutinised supporting evidence, such arrears are caused by circumstances beyond the leaseholders control D 9. 6 tenant or leaseholder in material or serious breach of their tenancy agreement or lease -i. e. anti social behaviour D 9. 7 Absent from 4 consecutive meetings without special 25 leave
THE BOARD ELECTIONS D 12 One third – longest serving members of the board retire at each AGM if a tie - drawn by lot – current rules same except if a tie, down to number of votes when elected D 13 – If no. of candidates for election does not exceed vacancies then deemed to be elected D 14 – Nominations for election invited 21 days before AGM – standard practice but current rules nominations at AGM D 15 Nominations forms in 7 days before AGM to include a statement by the person nominated of experience, knowledge and skills relevant to the work of the Board New D 16 – All candidates including existing retiring board members standing for election must be nominated by another member - Note current rules state board members serve for max of 3 consecutive terms then 2 year break – no restriction in new rules D 18 – Only shareholders can nominate other shareholders to stand for election D 19 – General meeting can designate places on board for underrepresented groups such members must act in the interests of the Society - not in current 26 rules
THE BOARD D 24 Board must meet at least 6 times a year. Current in exceptional circumstances and as determined by the chair, an emergency meeting of the Board may be summoned on shorter notice provided every member of the Board has been duly notified. New D 25 - Quorum for board is lesser of 6 or half of the elected members of the board currently 6 elected members D 26 - Questions decided by a majority of votes of those present. If equality of votes resolution fail OR chair has second casting vote? current rules chair has casting vote D 28 – Board members interests – whole new section reflecting changes in law inserted based on up to date 2015 National Housing Federation model current best practice - not in current rules in any detail D 32 – Requires board member who fails to declare an interest to vacate office – not in current rules D 33 – Expenses amended for latest NHF model wording change from current rules reflecting latest practice and includes loss of earnings and insurance as per members expenses policy 27
NEW SECTIONS Part E – Chair, Secretary, Treasurer and chief officer roles set out new Part F – Financial control and audit – legal requirements inc appointment of auditor – reflects requirements of Co-op and Community Benefit Act 2014 Part G Miscellaneous and statutory, registered office and name G 4 minutes to be signed by chair of meeting – new G 7 – requirement to have a seal – current rules Includes dispute procedure – new Interpretation of terms – “Tenant” is a person living within “The Area” who is a lawful resident in one of the landlord(s) properties, and holds a tenancy agreement, licence or lease with the landlord(s) with whom the TMO has or intends to have a management agreement with Note -legal definition of tenant includes leaseholders 28
NEXT STEPS Shareholders consider the new rules at general meeting - now Put forward/agree any changes Then at least ¾ of shareholders voting must agree the new rules – If agreed submit to Financial Conduct Authority Application requires signature of secretary Signed by officer & witnessed by commissioner of oaths, solicitor, notary, or justice of peace New Rules come into effect ONLY when registration completed by FCA and LEMB notified 29
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